Schaaf, Fitzpatrick headed towards collision course on managed care
JEFFERSON CITY, Mo. – Sen. Rob Schaaf has made his opposition to managed care expansion well-known on this session, often speaking against the rollout of a new deal negotiated in 2015 to provide managed care to Missourians not located along the I-70 corridor.
However, he reached a new pitch Thursday when he had strong words for House Budget Chair Scott Fitzpatrick on the Senate floor, inferring that the House’s foremost appropriations member was beholden to managed care companies.
A disagreement between the House budget chair and a senator known for his filibusters could mean that dispute escalates into a major fight over the budget when appropriations bills are heard in the Senate next week.
The fight over the current expansion of managed care is a technical one to say the least. It stems from a foible in the initial expansion contract rolled out by Gov. Jay Nixon’s administration in 2015 after the General Assembly approved it in that year’s budget. The transition from a fee-for-service program – currently used in counties not along the I-70 corridor– to managed care will go into effect May 1 of this year.
However, fee-for-service (FFS) providers can still submit claims to the Department of Social Services (DSS), as out-state Missourians will still be receiving FFS services through April 30. FSS providers in Missouri have a year to bill the state, and DSS will continue to get bills from FFS providers for services provided before April 30. Because of how long it takes to submit and process claims, there will be expenses in the next fiscal year – FY 2018 – associated with claims from the current fiscal year – FY 2017.
In response, the DSS, which oversees Medicaid and thus the expansion of managed care in the state, requested in their budget a “claims run out cost” line item totalling just under $100 million in state and federal funds. That line item will pay for those claims that occurred in FY 2017 for bills not received until FY 2018.
Under the fee for service model, due to the time required for a claim to be submitted and processed by the state, the state pays for those services an average of 60-90 days from the date the services are actually rendered. If a Medicaid patient gets a broken arm set July 30, the state would probably be required to pay for those services sometime in October.
In the new model, the managed care model, the state pays a monthly rate to managed care providers to cover the costs of claims that are expected to occur for that month, just like a family or individual pays their health insurance premium each month. For the service period of July 1 to July 31, the state will make a payment to the managed care organizations Aug. 5. That same patient getting their broken arm set July 30 instead of paying the state paying in October, the state would pay the managed care provider on that Aug. 5 date. The managed care organization would likely pay that bill in the same time frame that state would have paid it under the FFS model.
That means the state will pay for managed care much sooner than it would have to pay under the FFS model.
“At the end of the day, I think managed care saves money, but when you accelerate a bunch of costs that would have normally been in the later fiscal year into the current fiscal year, it creates an added cost,” he said.
So Fitzpatrick declined to fund the cost associated with that budgeted to DSS, effectively having the state pay managed care providers a month later. The move, he said, was met with opposition by the managed care providers, but he gave them an ultimatum: accept the terms or managed care expansion would not happen in the state. He said as a business owner, he wanted to ensure cash flow stayed strong.
“From a cash flow standpoint for the state, it makes it so the managed care company cash flows very similarly to the fee for service industry,” Fitzpatrick said.
Schaaf, a physician and longtime opponent of managed care, questioned that tactic.
“To say we have this existing statewide contract for managed care, and then just suddenly in order to make ends meet, we’re just going to pay those managed care companies a month later without even knowing they would agree to that,” Schaaf said. “Why should they agree to it?”
The senator added the delayed cost from the states to managed care providers would impact hospitals and actual service providers if managed care organizations simply decide to delay payments as the state did. That act, he stipulated, could put serious strain on hospitals.
“It seems we’re doing this for the benefit of managed care companies and not for people of Missouri,” Schaaf said, mentioning the managed care companies would still receive a $680 million contract from the state. “That very much worries me, and I think it deserves scrutiny.”
Schaaf recommended to the governor that the state wait a year to solve that problem along with others he sees in the transition. However, he also cites examples that managed care actually leads to worse care and costs more. But the trend nationally, particularly in republican states is to move toward managed care as a way to control out of control medicaid and taxpayer funded health care. The gov has made it clear for his support for managed care, he fully funded it in the budget proposal.
Fitzpatrick however says making changes to the way the plan is currently being implemented, could be disastrous as the health care for hundreds of thousands of Missourians rest in the balance.
“The contract is supposed to start in two weeks,” Fitzpatrick said. “We’re talking about 1 million people on medicaid in Missouri. To change the plan for how those people’s care is going to be delivered two weeks before the new contract is going to start is going to be a disaster.
“If Sen. Schaaf or anybody else for that matter didn’t want managed care to be in the budget, then he should have filibustered it longer and harder two years ago when it was put in the budget by the Senate.”