Tim Moore, CEO of the Mississippi Hospital Association

Mississippi usually is not a model for health care in this country. Non-profit groups routinely list the state as the unhealthiest by a number of major indicators, from smoking and obesity to diabetes and stroke.

But health care providers are watching the state and a health care model that could provide a template for hospitals around the country.

This week, the Division of Medicaid is expected to award contracts to three insurers under its managed care program, MississippiCAN. One of the companies bidding is Mississippi True, a non-profit model of managed care that breaks the mold of publicly held companies dominating the insurance landscape. If Mississippi True gets a contract, it will be the first large-scale statewide provider sponsored health plan in the United States.

“There are a bunch of other states waiting to see what happens and if they can make it work because they know they’re at risk. … Hospitals are losing profits across the country,” said David Mosley, a government health care expert with Navigant Healthcare, a consulting firm.

Mississippi True’s approach is unique for two reasons. The two managed care companies that currently hold contracts with MississippiCAN, Magnolia Health and United Healthcare, are publicly traded companies with a national presence. Mississippi True is owned by the providers in the network, making it essentially a non-profit because any extra funds go back to the members.

And while provider-owned insurers are common in other states, Mississippi True’s 60-hospital provider network would be the largest by far in the country.

Richard Roberson, vice president, Mississippi Hospital Association

“(We’ve) had a lot of phone calls from other hospital association directors around the country who’ve asked how’d you get everyone on the same page? They’re saying if y’all can pull this off, a lot of people think it’s a game changer,” said Richard Roberson, vice president of policy at the Mississippi Hospital Association, which has a seat on the board of Mississippi True.

But pulling it off is far from a guarantee, especially in a state as unhealthy as Mississippi.

“Mississippi is a notoriously difficult state to insure. You have a population with a lot of unhealthy habits, and you’re not going to change them by saying, ‘this is a better way,’” Mosley said.

Mis-Managed care?

On its face, the goal of managed care companies is simple: reduce health care costs by keeping patients healthy.

It’s a straightforward approach — and one that frequently pays dividends, according to Jocelyn Carter, CEO of United Healthcare. In a hearing held by the Mississippi Legislature in January, Carter laid out some of United’s managed care strategies, which run the gamut from providing fresh produce to clients to requiring emergency room patients to follow up with primary care physicians after leaving the hospital.

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

And since it launched it 2011, Mississippi’s managed care program has prevented $210 million in additional state spending, according to a report last year from actuarial firm Milliman, which also set the capitation rates that MississippiCAN pays its managed care companies.

But many providers argue that much of these savings has come out of their own pockets. In the state and around the country, health care providers describe a Byzantine system, where insurers require multiple authorizations for routine procedures, cut drug supplies without warning and don’t always pay their bills.

Evan Dillard, CEO of Forrest General Hospital

“We can’t get paid by what or when we are told we are going to be paid by. They’ll decline (a payment), so we’ll call back and they’ll say, ‘Oh you don’t have enough documentation.’ It’s a slow no,” said Evan Dillard, CEO of Forrest General Hospital in Hattiesburg.

Unlike a traditional fee-for-service reimbursement structure, Medicaid pays its managed care companies a set rate per patient. For a healthy child in Mississippi that means a capitation rate of about $277 a month. In contrast, the monthly capitation rate for an adult breast cancer patient averages $3,600.

The upside to this is more budget predictability. And if a managed care company can spend less than $3,600 a month on the cancer patient’s care, it makes money. But if the services they approve exceed that amount, they lose money.

“They’re for-profit businesses. They’re in the business of taking an insurance premium from the state and the goal is to make a return to stock holders,” said James Huffman, CEO of Baptist Memorial Hospital-DeSoto. “They’ve got to cover their overhead and provide the services they’re obligated to under the program, and if they can’t, the strategy is, ‘don’t pay for the services they’ve been provided.’”

In the past two years, hospitals, in and out of the state, have publicly feuded with MississippiCAN and its insurers. Forrest General and North Mississippi Medical Center in Tupelo each threatened to sever contracts with United, citing hundreds of thousands of dollars in unpaid bills. And in March, Children’s Hospital of Alabama actually did sever ties with all Mississippi Medicaid patients, a move they blamed on “inconsistent reimbursements” from United Healthcare and Magnolia Health.

United Healthcare did not respond to requests for comment. In an emailed statement, a representative for Magnolia Health said, “Magnolia Health has been proud to provide coordinated care to Medicaid recipients. Coordinated care can slow rising health care costs by connecting patients with primary care providers and by focusing on preventive care.  We welcome fair competition in the marketplace.”

True-ly different?

Although providers’ complaints about the current managed care system are well-documented, the catalyst for Mississippi True actually lies in the state’s decision not to expand Medicaid in 2013.

The Mississippi Hospital Association had lobbied hard for the expansion, according to CEO Tim Moore, with the hope that increasing the Medicaid rolls would cut back on the millions hospitals spend annually providing charity care for uninsured Mississippians.

Although Gov. Phil Bryant was adamant that expanding Medicaid was out of the question, Moore said, “his comment was pretty strong that if you come up with another plan that’s not expansion, let’s do it.”

Ultimately, Moore said, a provider-sponsored plan began to make the most sense.

“With (for-profit insurers) you have someone in an office somewhere deciding what procedure they think you need. Why aren’t the hospitals or the doctors who know their patients making these calls? Doesn’t that make more sense?” Moore said.

But before an insurer can decide how to keep patients healthy, it needs to know which treatments and variables most often produce healthier patients and avert crises down the road. And that requires an extensive data network, according to David Mosley of Navigant Healthcare.

United Healthcare and Magnolia Health are national, publicly traded companies with access to decades of data, covering millions of patients.

David Mosley, a government health care expert with Navigant Healthcare

“So the question is in Mississippi, if Medicaid awards one of the slots to the provider-sponsored plan, will they then be able to generate the robust encounter level claims and data to be okay?” Mosley said.

Dillard brushed off these concerns, pointing out that the Hospital Association has long collected data from member hospitals. He also said that no set of numbers can compete with first-hand experience.

“If you’re looking at what are the indicators of how healthy the population is, no one knows that better than the people taking care of the patients,” Dillard said.

“We have a chance to be on the ground in the state where we are. United and (Magnolia) have no idea what the health status of our patients are. We have the best information, the best ability to be on the ground and to improve health outcomes in our state. And to save the state money.

If Mississippi True does get a contract with Medicaid, Dave Mosley said, he expects health care providers in other states to watch every move the program makes.

“I hope they get (the contract) — not because I have a bet with anybody or because I’m certain they’re going to provide this magnificent unicorn and gummy bears to the state —but I think there’s a good shot they’re onto something here. And I’d like to see if it works.”

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Larrison Campbell is a Greenville native who reports on politics with an emphasis on public health. She received a bachelor’s from Wesleyan University and a master’s from Columbia University's Graduate School of Journalism.Larrison is a 2018 National Press Foundation fellow in public health, a 2019 Blue Cross Blue Shield Foundation of Massachusetts fellow in health care reporting and a 2019 Center for Health Journalism National Fellow.