Managed care expansion gets a green light in Missouri

Missouri’s option to expand Medicaid managed care became etched in stone when Governor Jay Nixon (D) signed 13 budget bills on May 8, 2015. Missouri currently has some managed care in place, but this law would expand it statewide and affect hundreds of thousands.

Managed care organizations

Contracting with managed care organizations (MCOs) can allow states to reduce program costs and, hopefully, improve quality of health care. In a study of the effect of MCOs in four different communities nationwide, providers seemed to view the organizations as administrative entities with a limited impact on the quality of the delivery of health care to Medicaid enrollees. According to Medicaid Health Plans of America, managed care plans allow for states to better predict Medicaid expenses as opposed to fee-for-service charges. Pennsylvania reported savings of $2.7 billion over five years due to the implementation of Medicaid health plans. About 267 MCOs serve the needs of states that have chosen to contract with them.

Managed care in Missouri

Managed care in Missouri currently covers nearly 440,000 out of 893,000 Medicaid enrollees in the state. Missouri has three MCOs: Centene Corporation, Aetna, and Wellcare. The counties currently using managed care are located along Interstate 70. Individuals who are disabled, elderly, or blind are exempt from managed care and remain exempt despite the expansion, meaning that only 200,000 of those not currently using managed care services will be shifted away from fee-for-service care.

Effects of expansion

One aspect of managed care involves a focus on preventive services to hopefully reduce the number of expensive emergency room visits. This saves money for the MCOs, as they are paid a flat fee for the management services. However, to save more money, some are concerned that companies limit provider networks with an eye on increasing profit margins. According to Missouri Health Care for All, an advocacy group, Medicaid  members in more rural communities may stand to lose access to doctors.

Managed care in other states

Despite Missouri and other states implementing and expanding managed care, it is not always a popular decision. In the year following the implementation of managed care in Mississippi, the president of the Mississippi Academy of Family Physicians told the Governor and state House committee that the program was “wildly unpopular” and felt that it impaired the physician-patient relationship. On the same day Governor Nixon signed the managed care expansion, Iowa Governor Terry Branstad’s (R) managed care expansion plan hit a major roadblock. His Senate passed a budget that placed several caps on his managed care plan. Among the changes included a cap on MCO profits, creation of a commission to oversee moving from fee-for-service to managed care, a ban on cutting provider rates to find savings., and blocking the closing of two state mental health hospitals. As in Missouri, Iowa advocacy groups and lawmakers feared loss of services and a reduction in the quality of care following a switch to managed care. Branstad felt that his plan would result in an estimated $51 million in savings. The Senate estimated that managed care would save over twice that much.

Other budget bills

The managed care expansion was part of the $26 billion state budget that was sent to the governor’s desk two weeks before deadline. According to local news, the Republican majority was steeled to begin overriding line-item budget vetoes, considering that Governor Nixon cut over $780 million in general revenue last June. Representative Scott Fitzpatrick (R) felt that the budget submitted was “pretty reasonable.” Although Nixon did not veto any line items, he plans to keep an eye on state revenue and withhold money if necessary. The budget included a $12 million increase for higher education and controversial cuts to social programs.