Around 200,000 Medicaid recipients would move to privatized managed care under a proposal that won Senate approval after a nearly five-hour filibuster by opponents.
The plan was passed as part of the Senate’s $26 billion budget proposal, and was included in a massive rework of how the state funds its social welfare programs. Sen. Kurt Schaefer, a Columbia Republican and Senate Appropriations Committee chairman, pushed through a plan to budget lump sum amounts to the departments of mental health, social services and health and senior services, rather than specific amounts for each program.
The goal of all these changes, Schaefer said, was to “rein in welfare spending” that he believes has grown out of control.
Sens. Rob Schaaf of St. Joseph and Bob Onder of Lake St. Louis — both practicing physicians — objected to the expansion of managed care included in the budget.
Currently, three managed care companies provide services in about 54 of the state’s 114 counties, covering less than half of the state’s roughly 800,000 Medicaid participants. In fiscal year 2014, the state paid those three companies a total of around $1.2 billion for their services.
Managed care allows private companies to oversee health benefits for a consumer through a set group of doctors. Supporters of managed care argue it’s more cost-effective and can help guarantee better health outcomes.
By contrast, in the rest of the state’s 60 counties — all lying outside the Interstate 70 corridor — traditional Medicaid reimburses providers directly for whatever services they perform.
Schaefer included in the budget a change that would expand managed care to the entire state for the populations it currently serves, still exempting the elderly, blind and disabled.
Schaaf, a longtime critic of managed care, questioned why this change was made through the budget, with no public hearing and no testimony from managed care companies.
“Who wants this?” Schaaf asked. “The managed care companies.”
Schaefer defended his proposal, saying the idea had been thoroughly vetted by legislative committees in previous years. Ultimately, he said, it will save the state money.
Missouri awarded its managed care contracts to subsidiaries of Wellsprin Health Plans Inc., Centene Corp. and Coventry Healthcare Inc. Of those companies, St. Louis-based Centene has been the most active in Missouri politics, employing 10 lobbyists and donating more than $325,000 to various campaigns during the 2014 election cycle.
A spokeswoman for Centene did not respond to a request for comment.
The Office of Administration, which handles contracts for the state, said that if managed care was expanded statewide, the contracts would have to be rebid.
A study performed by Mercer and Associates reported 2.7 percent annual savings for the current Medicaid managed care groups in Missouri. But Dave Dillon, spokesman for the Missouri Hospital Association, said that savings would likely be wiped out by a looming federal tax on managed care plans.
The Department of Social Services reported earlier this year that managed care enrollees were more likely to use the emergency room and performed worse than traditional Medicaid recipients on five out of six clinical quality measures.
Eventually, a compromise was struck that convinced Schaaf and Onder to end their filibuster. The managed care expansion moved forward, but companies would be prohibited from refusing to contract with any eligible doctor.
All 13 budget bills cleared the Senate, which will now go to conference with the House to work out differences before being sent to Gov. Jay Nixon.