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Could Missouri Be Next to Expand Medicaid Managed Care?

Mary K. Caffrey
Missouri already spends $1.2 billion on Medicaid managed care in less than half its counties. The new plan would extend managed care to all Medicaid clients except the blind, disabled, and elderly. Meanwhile, in North Carolina, the CEO of the Medical Society argued against moving Medicaid to managed care, citing problems in other states.
Missouri could be the latest state to expand the ranks of its Medicaid population in managed care, as a bill to allow private contractors to handle benefits for 200,000 clients passed the Senate Wednesday after opponents mounted a 5-hour filibuster.

The move is part of an overhaul of social welfare programs that Republican state Senator Kurt Schaefer, chair of the Senate Appropriations committee, said would “rein in welfare spending.” Two practicing physicians in the Senate were among those who opposed the bill. “Who wants this?” asked one, Senator Rob Schaaf, according to published reports. “The managed care companies.”

Companies currently contracting with Missouri Medicaid are Centene Corp., Coventry Healthcare, and Wellsprin Health Plans. Missouri contracts with the 3 companies to serve less than half the state’s counties totaled $1.2 billion in 2014, according to the Houston Herald News. The new plan would expand managed care statewide except for clients who are blind, disabled, or elderly.

The news report said a study by Mercer and Associates found a 2.7% annual savings for Medicaid managed care groups. Despite the reported savings, Missouri officials said that managed care enrollees were more likely to use the emergency room and appeared to be receiving lower quality care, based on accepted measures. Reducing emergency room visits and hospital readmissions are high-priority targets of CMS.

Expansion of Medicaid managed care has taken place nationwide, in states run by Democrats and Republicans. Its continued growth was not unexpected in 2015. A survey by the Kaiser Family Foundation and a report in The American Journal of Accountable Care late last year both anticipated expansion as states sought to control rising costs in the program that provides healthcare for the poor.

In some states that have allowed Medicaid expansion to those earning between 100% and 138% of the poverty line under the Affordable Care Act, some existing clients have been permitted to stay in traditional systems, but new clients are only allowed to enroll in managed care.

Critics of Medicaid managed care have complained mostly about what happens during transitions. In the past year, problems with service disruptions and inadequate providers in networks have been reported in Ohio and Illinois. This week, Kentucky announced it would rebid managed care contracts after an auditor’s report found rural hospitals in poor financial health due, in part, to inadequate Medicaid reimbursement rates.

Schaaf complained that the Missouri bill was rushed to the floor without a hearing or any testimony from the managed care contractors. To end his filibuster, he won a concession that the contractors could not reject any eligible doctor.

Iowa has been debating a plan to shift its $4.1 billion Medicaid program to contractors next year, but legislators are skeptical. Meanwhile, in North Carolina, the CEO of the state’s Medical Society published an op-ed opposing legislation that would turn over Medicaid to managed care contractors. Robert W. Seligson mentions sanctions in other states against national contractors and specifically cites Kentucky’s struggles. Instead, Seligson writes, North Carolina should look to the efforts by 18 accountable care organizations enrolled in the Medicare Shared Savings Program.

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