Health Care

Truman Medical Center says proposed Medicaid cut ‘would be a disaster’

Officials from Truman Medical Center and other Missouri hospitals are protesting a proposed 10 percent Medicaid reimbursement cut for facilities that don't contract with the state's managed care companies.
Officials from Truman Medical Center and other Missouri hospitals are protesting a proposed 10 percent Medicaid reimbursement cut for facilities that don't contract with the state's managed care companies. File photo

Truman Medical Center officials say a proposed cut to certain Missouri Medicaid reimbursements would be disastrous for their bottom line.

The proposed rule would cut reimbursements to hospitals that don't participate in the state's three privatized managed care plans.

The companies that run those plans now are required to pay out-of-network hospitals what they used to get under the traditional Medicaid program, in which the state paid hospitals directly based on services rendered.

Under the proposed change, which would go into effect July 1, hospitals would get only 90 percent of the traditional Medicaid rate when they treat patients covered by a managed care company they haven't contracted with.

According to the Missouri Hospital Association, all Missouri hospitals have contracts with at least one of the managed care companies and all but 12 contract with all three.

But Truman Medical Center is one of the 12 and chief financial officer Allen Johnson said his organization couldn't absorb the 10 percent reduction. Truman is Jackson County's safety net hospital and 55 percent of its revenue comes from Medicaid, which in Missouri is called MO HealthNet.

“Financially, I think this would be a disaster for Truman,” Johnson said during a public meeting Tuesday on the proposal.

The Missouri Department of Social Services hosted the meeting in Jefferson City. One hospital representative after another opposed the measure and the quick timeline for implementation.

Department spokeswoman Heather Dolce said the state had been discussing the change since early in the year. The intent, she said, is to get more hospitals to participate in all of the privatized managed care plans.

"The health plans and providers may still negotiate reimbursement arrangements under managed care," Dolce said.

But officials from several hospitals, including Children's Mercy Hospital and the Kansas City-based HCA Midwest chain, said the change would affect even those hospitals that already contract with the managed care companies because it would give the companies more leverage when it's time to renegotiate those contracts.

In documents announcing the proposal, the Department of Social Services said it's also intended to "to ensure efficiency, economy, quality of care and access" for Medicaid recipients.

But Tim Van Zandt, the vice president for government and community relations at St. Luke's Health System, said he thought it would just shift money from hospitals to the managed care companies: Home State Health (a division of Centene), Missouri Care (a division of WellCare) and UnitedHealthcare.

“I don’t see anything in terms of the proposed amendment that would impact efficiency, economy, quality of care or access,” Van Zandt said.

The only voice pushing back on the hospitals during Tuesday's meeting belonged to Lou Gianquinto, the president of WellCare's Missouri Care plan. Gianquinto said the proposed regulation is something that other states have done and it would help bring down Medicaid hospital costs.

"Hospital unit cost for Missouri Medicaid managed care is quite simply out of line with the remainder of the industry," Gianquinto said.

He said that as his company and the others save money, those savings eventually will be spun forward to Missouri taxpayers as the state reduces the payment rates that the companies receive.

Hospital officials disagreed both that their costs are out of line and that the state would see any savings.

Van Zandt said he hoped that the state would reconsider but that usually by the time regulations get to the public comment phase, "the outcome has already been predetermined."

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