July 15, 2005

Medicaid Reform Commission Meeting: July 12 - 13, 2005
The Medicaid Reform Commission met in Jefferson City this week to discuss the issue of access to care and eligibility.

The first action was to adopt the “Charge” of the Commission. After brief discussion the charge was adopted. It will be posted on the following website link: www.house.state.mo.us/medicaidreform

Janel Luck, Acting Director of Division of Family Support, gave the Commission an in-depth review of the current Medicaid eligibility, verification, and re-verification process. Ms. Luck discussed all categories and their eligibility requirements, which includes medical assistance non-spend down, medical assistance spend down, Medicaid vendor payments, division of assets, elderly and disabled home and community based waiver program, supplemental nursing care, blind pension, supplemental aid to the blind, MO children with developmental disabilities waiver, medical assistance based on Section 1619 of Social Security Act, medical assistance for women receiving breast or cervical cancer treatment, qualified Medicare beneficiary, specified low income Medicare beneficiary, Q1 qualifying individual, and qualified disabled and working individuals.

Income limits, asset limits and determination of disabilities were discussed at length with the Commission asking questions and relaying their concerns about the verification and re-verification processes.

Ms. Luck explained that the verification process is accomplished by reviewing each application, conducting interviews, and interfacing many of the state and federal data bases, including the Federal Social Security Administration, Internal Revenue Service, Missouri Department of Revenue, state and federal unemployment security, and state and federal child support data bases. The department also checks insurance coverage, trusts, and other pertinent bank information as well as working with an individual corporation to get employment information from the bigger corporations. With the signing of SB 539 the department is required to re-verify all Medicaid recipients every year; as of June 2005 the department has reached 70% re-verification.

The committee then discussed the timeline of implementing major Medicaid cuts in FY 06 budget. The following was provided to the Commission:

July 1

Eligibility Cuts:

Other:

August 28

Eligibility Cuts:

Benefit Cuts:

Cost Sharing:

Other Actions:

January 1, 2006

Medicare Part D

Kevin Gipson , Director of Springfield-Green County Public Health Center, testified on behalf of the MO Association of Local Public Health Agencies. Providing outpatient care, the Green County Public Health Center only serves residents of Green County that are un-insured, which is re-verified every 30 days. They only serve the uninsured because it is too costly to serve Medicaid recipients. The benefit is local knowledge and knowing their recipients; who is working and who is insured. They charge 50-cent co-pays for prescription drugs to avoid abuse and “lost” prescriptions.

SUGGESTIONS:

1. Eliminate Medicaid red tape, administrative costs are extensive and expensive
2. Green County provides resources to the local health agency – the state should reward these and other innovative ideas

Joe Pierle, Primary Care Association (FQHCs) , testified on how FQHCs work and what the state could do to capitalize on their services. FQHCs are locally owned and operated and there are more than 100 in the state, which must be located in a Health Manpower Shortage Area. FQHCs are supported by federal grants (28%), private donations, local government grants, hospital grants and some private pay. They must provide primary care to anyone. They work in cooperation with hospitals for emergency services. Federal law sets forth core services that are mandatory and those that are optional. They provide a sliding fee scale that is deeply discounted based on income and family size. Each facility sets its own guidelines on fees which range from $8 - $30.

In 2004 FQHCs provided care to 270,000 patients:

FQHCs are able to save money because their physicians are federal employees and receive federal malpractice coverage and have access to federal and state loan repayment programs. The impact of the Medicaid cuts is still unclear; they may have to close some clinics and consolidate.

Sen. Shields told the Commission that he considers FQHCs a huge part of the states Medicaid Solution.

Jennifer Hill with Missouri Budget Project testified on the un-insured and their numbers. She gave the Commission the following facts:

726,000 Missourians are uninsured

82.8% are in working families, mostly small businesses

42.5% of Missouri small businesses insure their employees

She told the Commission that wages are not keeping pace with the cost of insurance and they should consider premium assistance programs to help the working poor buy insurance and provide an insurance pool small business could participate in, such as the Consolidated Health Insurance Plan. Another solution would be to cut the costs of administrating insurance claims physicians incur.

During Jennifer’s testimony Sen. Days asked about the astronomical costs of pharmaceuticals. Ms. Hill’s responded that the cost of pharmaceuticals was declining and that issue would have to be solved on the federal level.

Joel Ferber, Managing Attorney, Health and Welfare Unit, Legal Services of Eastern Missouri , testified as to how the Commission could help the poor navigate thru the Medicaid eligibility bureaucracy. He told the Commission that Medicaid plays a very important role in the state and as bad as it is, it dramatically improves access to care and health outcomes to those without insurance. He also stated that half of all bankruptcies are the result of medical care costs. He said that federal matches from state funds are a very good deal for the state, at which time; Rep. Stefanick spoke up stating she felt that the state was relying on those matching funds too much due to the threat of cuts by the federal government thus, putting the state at great risk. Ferber cautioned the Commission against capping benefits.

SUGGESTIONS:

1. Disease Management
2. Reign in the cost of prescription drugs

Dan Mehan, Vice President, MO Chamber of Commerce, testified on costs of employer sponsored health insurance and possible solutions. Mehan informed the Commission that health care spending has grown dramatically and 59% of all Missourians, excluding government employees, get insurance through their employers.

SUGGESTIONS:

1. tax credits as an incentive for employers to offer benefits
2. consider Health Savings Accounts, which give employee the right to incentives to remain healthy and spend the health care dollars responsibly
3. more consumer friendly insurance plans, including plans that offer higher deductibles and lower premiums.

Mehan gave several examples of businesses that have given their employees a greater stake in the decision making and cost sharing, which, in some cases, is the difference in insurance coverage or not. High deductibles make the difference for some employers.

Sub-Committee on Access to Care:
The Commission then appointed members to the Sub-Committee on Access to Care, which will complete their work by October 1 st. Members include Sen. Shields, Rep. Sater, Sen. Dougherty, and Rep. Donnelly.

Second Day:
The second day began with public testimony, which included testimony from Sheltered Workshops, Paraquad, an epilepsy patient and Medicaid recipient, Grass Roots Organization, and KC Metropolitan Medical Society.

The Commission then began their roundtable discussion to determine the best reform ideas (or “Big Ideas”) from this meeting on Access, eligibility, uninsured, and underinsured. Those ideas were:

1. Paternity – once DNA determines paternity the father should be required to reimburse the state for the costs incurred for the birth of that child.
2. Coordinate all interfacing information from other databases to ensure eligibility
3. Consider requiring parents of pregnant mothers still living at home to incur some of the costs of the birth of the child
4. Allow the Division of Medical Services to purchase drugs at the wholesale level to provide to participating pharmacies at a lower cost to the state
5. Check all applicable laws and regulations to see if the state is allowed to subsidize applications for FQHCs, upfront moneys for a better advantage, provide financial assistance for grant process, or provide more funding for technical assistance.
6. Require all FQHCs and mental health centers to work in cooperation to eliminate duplication of physicians and efforts.
7. Define personal responsibility once a person has been determined eligible for assistance from the state
8. Provide a list of providers accepting Medicaid patients and use legislative oversight and research to verify that list on a regular basis to assure some providers are not turning patients away just because they are Medicaid patients

Medicaid Reform Commission Schedule – TENTATIVE

Waste Tire Fee

The bill, Senate Bill 225 sponsored by Senator Cauthorn, was amended with the waste tire fee language. The $.50 cent fee is set to terminate January 2010. Representative Charlie Schlottach and Representative Bill Deeken were instrumental in obtaining the language.

Link to SB 225: http://www.senate.mo.gov/05info/BTS_Web/Bill.aspx?SessionType=R&BillID=8011

 Joint Committee Meeting on the Missouri Health Care Stabilization Fund
On July 6, the Joint Interim Committee on the Missouri Health Care Stabilization Fund held their first meeting in Jefferson City. The interim committee is to be responsible for: Exploring the establishment of a Missouri Health Care Stabilization Fund to be administered by a health care stabilization board and housed within the Department of Insurance; Investigating the primary objective of assuring health care providers that there will be reasonable medical malpractice liability coverage available within the state of Missouri; Researching the possibility of requiring health care providers to carry primary medical malpractice coverage with another insurer in order to participate in the fund; Investigating the feasibility of the fund paying moneys to an aggrieved party if his or her damages exceed the health care provider's primary level of coverage; and Exploring any other ideas as necessary for possible implementation of the fund. The committee will report their findings to the General Assembly.

Members in attendance included:

The chair then suggested holding four meetings across the state. He suggested that they have invited witnesses at the meeting along with an hour or so for public testimony. Sen. Crowell recommended that the committee visit Kansas to see first hand how their stabilization fund operates. The committee members will compare schedules and committee meeting dates and locations will be determined at a later date.

The committee then approved their Mission Statement as follows:

The Mission of the Committee will be to explore the need for a Missouri Health Care Stabilization Fund that improves the State’s competitiveness in providing access to quality care.

Adrian Crouse with Senate Research then provided a brief update on what other states are doing regarding health care stabilization funds, otherwise known as Patient Compensation Funds (PCFs). She stated that most states initiated their PCFs in the mid 70’s. She noted that in Kansas, Pennsylvania and Wisconsin provider participation is mandatory and that Wisconsin also includes nursing homes in its eligibility status. She stated that in general most funds require coverage of $200 thousand to $250 thousand per claim and aggregate coverage of $1 million to $3 million. She stated that most funds impose premium surcharges but that New York subsidizes its fund. Crouse noted that they are attempting to obtain data on the number of physicians that have left Missouri due to the high cost of medical Malpractice Insurance.

The Missouri Department of Insurance then provided a PowerPoint presentation to the committee on the Kansas Health Care Stabilization Fund; current medical malpractice carriers in Missouri; and other stabilization funds in the United States. The Department’s presentation can be viewed at the following link: http://www.senate.mo.gov/05info/comm/interim/jchc/JCHC-7-6.pps

Public Testimony
Geri Morrison and Bob Morrison with Medical Assurance, a medical malpractice liability insurance provider, stated that 28 states enacted funds in the mid 70’s but only a few were successful due to pricing problems. They noted that Kansas was the most successful but believed that their strong tort reform law was instrumental. They stated that Kansas has mandatory participation and that will be a big issue in Missouri. They noted that premiums in Kansas are based on the cost of fund losses and that the Kansas fund defends their claims. They stressed that any fund established in Missouri must have claims expertise. They stated that a Missouri fund must stand on its’ own and that just the fact of establishing a fund will not change the impact of claims losses. They noted that losses are still exceeding premiums in Missouri and that it is claim losses that drive premium rates. They noted that after five years of coverage in the Kansas Fund, “tail coverage” is then not required. “Tail coverage” is coverage for claims made after a physician retires but the incident occurred before that retirement.

Mike Delany with the Missouri Hospital Plan suggested that the committee realize that Missouri and Kansas are vastly different states. He noted that Kansas has a conservative legal climate and does not have the type of health centers that Missouri has which perform extremely complicated procedures. He believes that a stabilization fund should be studied but that it is too early to enact a fund in Missouri because tort reform should be given a chance to work. He stated that the Scott Decision has driven premiums up. He noted that their plan covers hospitals and those physicians employed by the hospital.

The chair then adjourned the meeting.

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