The committee that provides oversight to Missouri’s Medicaid system is discussing the program’s condition.

Photo courtesy of the Centers for Medicare and Medicaid Services

In recent years, cuts have been made to certain services within Medicaid because of underperforming state revenues that are responsible for roughly 35% of the federal health program costs. State revenues are up 5% in the fiscal year that ended June 30th, which means more money can cover increases in the cost of delivering Medicaid in Missouri.

That figure rises by an average of $300 million every year because the cost of health care continues to increase. But the rising price tag will be significantly less because the number of individuals receiving Medicaid dropped by more than 20,000 from June to July of this year.  The sudden dip in recipients, which includes 16,000 children and 4,000 parents, is troubling to Medicaid Oversight Committee Chairman Tim McBride.

He notes it’s the biggest month-to-month drop off in over a decade.  McBride suspects there’s a problem with Missouri’s annual renewal process for recipients and thinks they’re being dropped erroneously.

In an effort to cut overall costs, the state has cut personnel charged with operating the Medicaid program.  One step taken to achieve that goal has been to outsource its call center to a private company.

During a recent Oversight Committee meeting, it was stated that the call center, which normally employs 450 people, is understaffed by 150.  McBride thinks low wages at the call center are an issue.

“They only pay about $29,000 for a person to work with a college education, and they’re having problems filling the jobs,” says McBride.  He adds that Missouri’s outsourcing of its call center is somewhat unusual compared to other states.

Nearly one-in-six Missourians receive Medicaid benefits.

Another major issue discussed at the Oversight Committee’s meeting was a policy decision made by the state’s Department of Social Services (DSS), which administers the Medicaid program. It recently started allowing insurance plans to reimburse providers at 90% of the Medicaid managed care rate if the provider is not “in network” with the insurer.

Numerous hospitals within the state started sounding the alarm that the change could leave them struggling to keep their doors open.  DSS has said the new reimbursement rate is meant to encourage more providers to participate in the managed care plans.

But providers are quick to point out that every hospital in Missouri has a contract with at least one of the three insurance companies and all but 12 are signed-up with all three.

Those hospitals with a high percentage of patients on Medicaid say they’re feeling especially disadvantaged at the negotiating table and contend DSS, through its new policy, has given insurers all the leverage in the bargaining process.

McBride acknowledged that the state would not save any money under the arrangement and said the Oversight Committee will monitor to see if DSS makes an adjustment in its policy.

Some legislative cuts made to Medicaid in 2017 to help shore up the state budget remain in place. Lawmakers chose to cap the amount spent on Consumer-Directed Services which assists people with disabilities in receiving services from hired attendants who help them live in a home setting.

The cap amounted to a $36 million cut – $13 million in state spending and $23 million in matching federal funds.  The legislature also cut rates to providers of Consumer-Directed Services by 3%, which lowered spending on it by $14 million – $5 million in state money and $9 million in federal funds.  The total cut amounted to roughly $50 million.  But this year, lawmakers partially reversed the rate cut, restoring $8 million to providers.

At its recent meeting, the Oversight Committee also heard a review of another effort to save the state money – a $40 million cost containment list that was presented to the Missouri House Budget Committee.  The cost containment was part of then-Governor Eric Greitens’ budget proposal issued earlier in this year’s legislative session before his June 1st resignation.  The Department of Social Services proposed to generate the $40 million savings by changing the methodology of Medicaid payments to hospitals.

Overall, McBride thinks Medicaid will not be in as much danger of cuts to services under Republican Governor Mike Parson than under former GOP head of state Greitens.

“He (Greitens) historically had been making more budget cuts and vetoes, just because he was hostile with the legislature,” saysMcBride.  “It seemed like Parson when he came in, was just setting the ground at a more peaceful level.”

In addition to being the Medicaid Oversight Committee Chairman, McBride is also a health economist at Washington University in St. Louis.  McBride and several colleagues released an analysis after a bill in the State Senate this year proposed to impose work requirements on able-bodied Medicaid recipients ages 19-to-64.

It notes Missouri has very few such individuals on the program compared to states such as neighboring Kentucky, which expanded Medicaid coverage to exactly those people.  Only able-bodied parents can qualify for Medicaid in Missouri, and those individuals can’t have incomes of more than 19% of the poverty rate.

McBride notes the analysis found that the cost of implementing work requirements would outweigh any potential savings from restricting eligibility.

“In a non-expansion state where we’re at 20% of the poverty line, you’re not really going to get much out of a work requirement,” says McBride.  “That’s the bottom line.”

The bill in the State Senate failed to move past the committee level.

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