October 18, 2005

Medicaid Reform Commission Hears Testimony At Final Meeting
The Missouri Medicaid Reform Commission met two days at the state Capitol this week to hear testimony on mental health and pharmacy issues.

This was the last of the formal meetings scheduled on specific subjects. The commission now will conduct working sessions to draft legislation they will recommend to the Missouri General Assembly for the 2006 legislative session. Two meetings are scheduled Oct. 26-27 and Nov. 9-10 in Jefferson City.

Commissioners heard testimony about mental health from managed care representatives, providers and the director of the Missouri Department of Mental Health.

Adapt, a Missouri-based company, presented its NorthSTAR program, a managed care initiative that Adapt implemented in Texas in cooperation with the Texas Department of State Health Services. They presented data showing the value of a managed care approach to what they called a fragmented delivery system of mental health care in Missouri.

Providers who testified included New Directions Behavioral Health, an MC+ contractor with Blue Cross Blue Shield in the Kansas City area;
Missouri Psychological Association; National Alliance on Mental Illness; Pony Bird Inc., a 24-hour skilled care facility for the severely mentally/physically disabled; Missouri Association for County Developmental Disabilities Services; and Missouri Coalition of Community Mental Health Centers

These providers said case managers know the community, patients and Missouri mental health care system better than any managed care company. They claimed large managed care companies simply would repackage services already available and not offer any significant savings or value.

The providers did offer several recommendations.

• Increase local care management of critical care diseases.
• Do not reinstate co-payments.
• Include the latest psychotropic drugs in the state’s drug formulary.
• Allow patients/clients to work without losing Medicaid coverage.
• Continue to expand the collaborative partnership between the Missouri Department of Health and Senior Services and local behavioral/mental health care providers.
• Make program changes to limit the use of the exception process as a utilization control.
• Implement measurable outcomes that make providers accountable.
• Encourage self/family reliance through increased and qualified provider choices.
• Create incentives for patients to work and live in the least restrictive environments.
• Continue efforts to overcome fragmentation of mental and behavioral health services through increased coordination between providers and the state.

The St. Louis County Police Department testified in favor of the Crises Intervention Teams program. Also testifying was the Jordan Valley Community Health Center, a federally qualified health center, with Burrell Behavioral Health. They testified in favor of increased local collaboration between local health and mental/behavioral health providers. Dorn Schuffman, director of the Missouri Department of Mental Health, testified the commission needs to consider more than just Medicaid when discussing mental health because the federal government views it as a state responsibility. He explained the majority of services offered by his department were largely funded through state general revenue, with no federal matching dollars available. He also explained the department uses a mixed system of fee-for-service and managed care for delivery of services.

The second topic discussed was pharmaceutical costs. The Missouri Pharmacy Association praised the current programs started by the DHSS, including E-Prescribe and the Disease State Management Program, and recommended they be expanded. They claimed a 7.6 percent decrease in emergency room utilization because of the Disease State Management Program, which allows pharmacists to work with physicians to help manage pharmaceutical use by patients with diabetes, asthma, heart failure or depression.

The commission also heard testimony from a Washington, D.C., attorney who outlined the current process for distributing and financing prescription drugs for Medicaid patients. She discussed the prospects for federal action affecting state Medicaid programs, including relief from the federal “clawback” law. This law requires states to make payments to the federal government to offset the cost of transferring to Medicare from Medicaid the responsibility to provide prescription drug coverage for those eligible for both programs.

Other witnesses included a representative from Blue Cross Blue Shield of Kansas City, who discussed the company’s efforts to control pharmaceutical costs in its Medicaid manage care plan, and a state Medicaid official responsible for pharmaceutical and disease management initiatives.

State Review Commission Adopts Agency Reform Recommendations
In January, Gov. Matt Blunt created a Missouri State Government Review Commission to identify ways to improve state operations by restructuring, consolidating or eliminating state agency functions. The commission, comprised of 19 private sector appointees and the lieutenant governor, completed its recommendations this week.

Several of the final recommendations affect the state’s regulation and financing of health care.

• The commission rejected a subcommittee proposal to move the Division of Medical Services, which administers Medicaid, from the Missouri Department of Social Services to the Missouri Department of Health and Senior Services. Commissioners noted the Medicaid Reform Commission is considering major changes to the program and suggested it would be premature to reassign the agency.
• The commission recommended the state have biennial rather than annual budgets. Until 1972, the state budgeted on a two-year cycle. Missouri has had a biennial capital improvements budget since 1993.
• Medicaid’s cost formula for establishing Medicaid nursing home payments would be re-examined.
• The DHSS’ Bureau of Narcotics and Dangerous Drugs would be moved to the Missouri Department of Public Safety to improve coordination with the federal Drug Enforcement Administration.
• The licensing of emergency medical technicians would be transferred from the DHSS to the Divi sion of Professional Registration. The division, which includes most of the state’s professional and occupational licensure boards, would be moved to a new department encompassing financial and insurance regulation and occupational licensure.
• The First Steps program of the Missouri Department of Elementary and Secondary Education would move to the DHSS. The program is designed to identify and respond to developmental delays in children ages 3 and younger.
• After rejecting a subcommittee proposal to eliminate funding for the Centers for Independent Living and transfer the savings to Home and Community-Based Services, the commission endorsed a state examination of the services of Centers for Independent Living to determine areas that need additional oversight and to identify potential administrative savings.
• The commission recommended the state implement a single point of entry for assessing elderly patients’ needs for services and providing referral “along the continuum of patient care, with emphasis on serving the individual in the least restrictive environment.”
• The commission recommended the DHSS examine the feasibility of outsourcing or privatizing case management services.
• An Interdepartmental Coordinating Council on Healthy Children would be formed to establish performance standards for state efforts to promote healthy children, including initiatives to ensure access to health care services. The council would use existing staff and resources and would be led by the DSS.
• Another Interdepartmental Coordinating Council would be led by the Missouri Department of Mental Health to coordinate and monitor the delivery of mental health services in various departments.
• The DSS’ State Technical Assistance Team, which manages the Child Fatality Review program, would be moved to the DPS.
• The state would conduct a feasibility study of consolidating the various state employee health insurance plans into a single purchasing entity.
• The DPS would be responsible for creating and overseeing a statewide emergency communications system. The State Emergency Management Agency would be transferred from the Adjutant General of the National Guard to the DPS.
• The various state telephone information and assistance lines would be evaluated and consolidated when feasible.
• Appeal hearings for most state agency administrative decisions would be consolidated within the Administrative Hearing Commission.

Several of the commission’s recommendations will require enacting legislation.

House Delays Budget Reconciliation To Consider Additional Cuts
Leaders in the U.S. House of Representatives have delayed the fiscal year 2006 budget reconciliation deadline until Oct. 28 to give authorizing committees time to cut $50 billion in mandatory programs, including Medicaid. The delay follows a proposed amendment to the 2006 budget resolution from House Speaker J. Dennis Hastert, R-Ill., that would increase mandatory program cuts from $35 billion to $50 billion. The U.S. Senate has rejected the idea of amending the budget resolution and is on schedule for an Oct. 26 markup by the Senate Budget Committee.

Lawmakers Propose Health Savings Accounts For Medicaid
Rep. Michael Rogers, R-Mich., and Sen. Mike Crapo, R-Idaho, have proposed legislation that would create health care savings accounts for Medicaid beneficiaries. The bill would create experimental accounts in 10 voluntary states for five years. Federal and state governments would provide as much as $2,500 per adult and as much as $1,000 per child for the savings accounts. Beneficiaries could use these funds to pay for their health care.

Under the bill, states also could impose a 10 percent deductible of the savings account limit on recipients whose health costs exceed the limit. Rogers said the measure would encourage Medicaid beneficiaries to seek less-expensive health care, resulting in long-term savings for the program.

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