Medicaid turns to managed care to save money

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Mississippi’s Division of Medicaid needs money now.

Last week, the state agency requested a $75 million deficit appropriation. Then, on Thursday, the governor cut several agency budgets another 1.4 percent. For Medicaid, this amounts to another $14 million dollars.

But finding cuts with this particular state agency is a long game, according to legislators. As a result, a Medicaid hearing on Thursday barely touched on the now $89 million deficit. Instead, representatives from Medicaid and managed care companies promoted long-term cost reducing strategies.

Gil Ford Photography

Sen. Brice Wiggins, R-Pascagoula

“We’re not going to fix this overnight,” said Sen. Brice Wiggins, R-Pascagoula, who chairs the Senate Medicaid Committee and organized Thursday’s meeting. “It’s about managing the (health care) costs as opposed to fixing or eliminating current expenses.”

Wiggins said that the status of Medicaid’s deficit request has not been settled. If it’s not funded, Medicaid has few strategies for immediately eliminating costs because, unlike most state agencies, only three percent of costs are administrative. These strategies, outlined in Mississippi Code, include cutting optional services, such as pharmacy coverage. After this, hospitals and provider payments would be cut.

Mississippi Today

Sen. Hob Bryan, D-Amory

“So if the Legislature does not wish to provide an appropriation, we’ll just pay the doctors less and the hospitals less, which I think is appalling,” said Sen. Hob Bryan, D-Amory.

The Division of Medicaid has requested a deficit appropriation every year since 2012 to fill in the gaps. The $75 million appropriation request for 2017 follows that pattern. The Legislature originally appropriated Medicaid $63 million less than it had requested. Then, in September, the governor made the first round of mid-year budget cuts, for a total of $78 million in cuts.

Much of the focus in Thursday’s meeting fell on United Health Care and Magnolia Health, the two managed care providers in Mississippi. Heads of both companies spoke about their efforts to keep clients healthy — and keep them from spending money on expensive services like the emergency room.

Jocelyn Carter, the CEO of United Healthcare, presented her company’s strategies for cost reduction. They run the gamut from providing fresh produce to clients to requiring emergency room patients to follow up with primary care physicians a few days after leaving the hospital.

“We’re looking at the holistic whole person with these programs,” Carter said.

Carter said United Healthcare has a $73 million investment in the state, with nearly 500,000 members.

Mississippi State Medical Association

Dr. Lee Voulters

But other speakers called managed care companies financial drains on the health care industry. Dr. Lee Voulters, president of the Mississippi Medical Association, said providers often spend hours getting approval for tests and physician referrals.

“It’s a tiresome burden, typically, because the vast majority of these cases are approved,” Voulters said.

For Voulters, the future of managed care in Mississippi lies in a nonprofit model sponsored by the Mississippi Hospital Association. MississippiTrue is currently in proposal form, but Voulters said, if approved, it could be ready to offer care by 2018. Physicians and hospitals would opt in and become equity members of the organization.

“If we get physicians involved in the clinical decision making, that’s the best strategy,” Voulters said. “They’re already out there. They know the best way to manage chest pain, the best way to manage diabetes.”

For the time being, however, solutions to Medicaid’s current and future financial issues remain up in the air. Wiggins said that Thursday’s meeting was, more than anything, a jumping off point for more discussions.

“Look, Medicaid is this huge problem,” Bryan said. “And we didn’t really discuss the biggest problem, which is reducing overall health care costs. … If you’re going to talk about Medicare, you have to step back and look at the big picture.”