09 Jul Care Providers Concerned Over New Missouri Medicaid Mandate

In the beginning of July 2018, the state of Missouri had transferred their healthcare coverage ran by the state over to other private companies. This transfer affected more than 250,000 families and lower-income individuals in the state of Missouri who were receiving Medicaid. These families and individuals had their plans transferred to one of three different companies. The three companies are WellCare, Centene and UnitedHealthcare. These transfers were part of the state’s move towards making their Medicaid healthcare program a private one.

This new rule comes with some fees that providers will have to pay if they do not want to opt into this new network of managed-care with the state. The fee will be 10-percent for those providers. Many hospitals located in rural areas are very concerned over the amount of financial losses they might sustain with this statewide change.

Disaster For Area Hospitals

According to the Hospitals Association of Missouri, every hospital in the state has at least one out of the three different managed healthcare companies. There are 12 hospitals in the state that have contracts with all three of those companies. Of the 12 is Truman Medical Center. Allen Johnson, the CFO of the hospital, says that his organization would not be able to take on the fee reduction of 10-percent. He believes that this new change would be financially disastrous for his hospital. He also noted that his hospital is the safety net in the county and more than half of its revenue comes from patients on Medicaid.

Intent Of State’s Change

The reason why the state is working towards this change is to help increase participation in the plan from different managed care plans. Many of those that are against this change say that it could effectively put the health of many Medicaid patients at risk. Others believe that this change will keep private practices from wanting to accept Medicaid patients. Medicaid already comes with a reimbursement of low rates for private practices as it is. The new changes will make it much more difficult for Medicaid recipients to find places that accept their insurance. This will most likely result in more people heading to the emergency rooms when they are ill. The state senator said that the job of managed care companies is to ration the amount of care they offer because that is how they make most of their money.

Insurance Companies Weigh In

Most insurance companies state they do not agree with what the senator has said. They feel they save money through keeping patients healthier and will pass all of those savings on to the sate. They say they have no interest or incentives to keep people from getting the care that they need. The cost of rates in Missouri have come out to be higher than the same care in other states.

Many healthcare providers are afraid that there is not going to be enough incentive for the insurers to negotiate favorable terms with them because the state has tipped the scales in the favor of the insurers. The providers think the insurers will have all of the bargaining chips on their side. The CEO of MHA has pointed out that hospitals which do not accept the new payment rate for Medicaid from the state will be able to refuse the signing of new contracts. This will effectively lock in the 10-percent revenue cut and has many hospitals worried.

In Jefferson City, Capital Region Medical Hospital has already made reports that one of their three care plans terminated their contract with the hospital with no attempts at negotiating. There have been other hospitals in the state who have made reports of similar incidents happening with their insurance companies.

Managed care providers get flat fees from the state department in order to cover every patient receiving care using Medicaid. The clinics are typically paid directly for the care the patients receive. Before the changes took place, the state was paying the clinics directly. This plan is still in effect for those patients who are senior citizens or disabled. Providers are noting that all contracts drawn up now will have to be negotiated separately with each managed care plan provider instead of each payment being determined by the correct departments of the state.

This transition from Medicaid is being adapted throughout the country. However, the rural areas around the nation are the ones having the most difficult times getting used to the changes, especially if their state is one that did not get a Medicaid expansion.