On Monday, Eric Greitens will be sworn in as Missouri’s 56th governor. Missourians sent a strong signal in the election — they were looking for change in Jefferson City. As a U.S. Navy SEAL, entrepreneur and philanthropist, Greitens’ path to the state’s highest office has been much different than that of previous governors. However, these same life experiences are likely to provide unique perspectives that should serve him well.
No doubt, his first order of business will be to work with the legislature on some inherited immediate and long-term challenges. This includes, but is not limited to, a budget for the current year that is out of balance. As he begins to address these challenges through his legislative package and budget recommendations, he no doubt will lean on members of his team. Missouri’s hospital community looks forward to working with him as a member of that team.
In December, as he was building his staff and agenda, I sent him a letter about our interest in collaborating on the challenges of funding the state’s Medicaid program. Hospitals have been a partner with the state in funding Medicaid since the Ashcroft administration. It’s a partnership that has allowed the state to spend general revenue on other priorities, while maintaining a safety net for the state’s most vulnerable citizens.
The hospital provider tax, known as the Federal Reimbursement Allowance program, is the state’s third largest source of revenue. The proof of its value can be found in the state’s budget. For the last completed state fiscal year, the direct hospital appropriation line in the state budget included $1.6 million in general revenue. In comparison, the general revenue appropriation for physicians was $85 million; nursing homes, $147 million; pharmacy, $281 million; and Medicaid managed care plans, $439 million.
The problems of the current budget and next year’s spending will arrive on Greitens’ desk almost immediately. Cutting Medicaid will be presented as a solution. It’s a blunt instrument.
For the next state fiscal year, nearly half of the $345 million in projected new general revenue spending for Medicaid — $167 million — is inflationary cost. This includes $75 million to continue the program at the present spending levels, $50 million for pharmacy and $42 million in other areas. This growth rate is similar to other health spending in the economy.
The balance of the new Medicaid general revenue spending reflects the decisions of the 2016 General Assembly. This includes the use of one-time funding that needs to be reconciled in future years. In addition, lawmakers expanded the program by increasing the asset limit for certain disabled individuals at a cost of $28 million, and by expanding Medicaid managed care statewide at a cost of $37 million.
There’s a better option. Reform Medicaid.
An entirely different set of numbers can provide direction, including the Hospital Industry Data Institute’s research on variation in the use of high-cost emergency department utilization. The research indicated that general medical visits and psychiatric and substance abuse visits are double the rates for managed care versus fee-for-service Medicaid. The inverse should be true, but it’s not. This indicates a ripe opportunity for reform of the managed care system — to ensure better care at lower costs.
HIDI researchers also found that 10 percent of Medicaid hospital patients account for 60 percent of spending within the hospital line of the Medicaid program. Many of these patients are outside of a care coordination model.
One reflection of the scope of the problem — and clear definition of a path to a better system — is included in a single data point. Researchers identified one Medicaid patient who had 384 visits to 17 different hospitals over a 366-day period, resulting in more than $1 million in charges.
Although hospitals are not waiting on the state to design new systems to improve care, we do want to be part of the team as the program is redesigned and rebuilt. Last week, a Springfield, Mo., television station aired a story on an innovative program at CoxHealth. The program uses paramedics to make house calls to frequent ED visitors. As paramedic Mark Alexander noted in the story, “ … there aren’t any payment methods for these type of services.” For Medicaid however, there’s enormous potential for cost savings through better patient management, care and health. True community-based reform can unleash this type of innovation across the state.
Governor-elect Greitens was a keynote speaker at MHA’s 2014 Annual Convention and Trade Show. It was clear from his remarks that as a SEAL, he understood the power of the team. Likewise, as an entrepreneur, he shared how he faced the hard decisions about where to prioritize investment. And finally, as the founder of The Mission Continues, he showed a deep understanding of the difference that can be made in a life when the right connections are made.
Missouri’s hospitals share the governor-elect’s commitment to improving the state. We have a long-standing, mutually supporting relationship with the state government. And, we whole-heartedly believe in the Triple Aim of care — better health, better care and lower cost.
Monday’s inauguration will mark a significant pivot in the state’s leadership. It also provides an opportunity to look at our state with new eyes. There’s significant value trapped in the current Medicaid program. Together — with the help of the governor and his team — we can liberate it for the benefit of Medicaid enrollees and taxpayers.
In This Issue
Herb B. Kuhn
MHA President and CEO
Court Orders HHS To Clear Medicare Appeal Backlog
NRHA Offers Free Webinars
Court Orders HHS To Clear Medicare Appeal Backlog
Staff Contact: Andrew Wheeler
As previously announced, the U.S. District Court for the District of Columbia imposed a request on Dec. 5, 2016, to resolve the backlog of nearly 658,000 pending Medicare provider appeals by the end of 2020. On Dec. 15, 2016, the U.S. Department of Health & Human Services filed a motion for the court to reconsider the ruling and stated it could not hit the targets set forth in the ruling. On Jan. 4, the U.S. District Court issued an order denying HHS’ motion to reconsider. The request to resolve the backlog includes a reduction of 30 percent by Dec. 31, 60 percent by Dec. 31, 2018, 90 percent by Dec. 31, 2019, and 100 percent by Dec. 31, 2020.
Back To Top
January 5, 2017
CMMI Releases Report To Congress
CMS Releases Biweekly Marketplace Enrollment Snapshot
CMS Revises Hospital Guidance On Justice-Involved Individuals
DHSS Posts Hospice And Home Health Annual Statistical Reports
MLN Connects Provider eNews Available
MAFP Seeks Nominations For Family Physician Of The Year Award
January 4, 2017
HRSA Issues Final Rule On 340B Prices And Penalties
CMS Releases Outpatient Quality Reporting Checklist
Commonwealth Fund Reports Shorter American Lifespan
Nichols Announces Resignation From Iron County Medical Center
January 3, 2017
Congressional Resolution Kicks Off ACA Repeal
Medicaid Bulletin Reviews Vaccines For Children Program