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story.lead_photo.caption MO HealthNet Director Todd Richardson shows how much paperwork is involved in applying for Missouri Department of Social Services programs. Photo by Julie Smith / News Tribune.

Staff have identified some areas where improvements may be made to MO HealthNet, Missouri's Medicaid program, according to Director Todd Richardson.

Gov. Mike Parson selected Richardson, the former speaker of the House, late last year to take charge of the agency and contain the rising costs of the program, improve its sustainability, and examine rural health care and hospital closures.

Under the new director, MO HealthNet immediately began assessments of the far-reaching program, which serves more than 850,000 Missourians.

MO HealthNet has a huge job ahead of it, Richardson said. The organization recognizes the need to update payment methodologies and to create, incentivize and reward delivery models that produce better outcomes for Medicaid participants.

"At the root of what our focus is, is the notion, 'If we can improve the health outcome of our Medicaid participants, then we can simultaneously help fix the financial sustainability piece,'" Richardson said.

Medicaid's trajectory — at about 24 percent of general revenue and growing — is not financially sustainable for the state, he said.

"So what we're trying to do is figure out how we can do business differently to get those better outcomes that we know will lead to lower costs in the long term," he said. "Our outlook — and I think the whole promise of value-based health care — is that health care is one of the only areas where you can achieve both of your policy objectives at the same time."

The healthier Missouri Medicaid participants are, the less likely they are to use the emergency room, he said.

The healthier participants are, the longer they'll be able to live in their own homes instead of having to go to nursing facilities.

The healthier Missouri's pregnant mothers are, the lower the cost of their deliveries will be.

A focus is improving MO HealthNet participants' health so they don't end up in expensive settings, such as emergency rooms.

"If we focus on quality of outcomes and the health of our participants, then we'll be covering their health care needs in the appropriate and — in a lot of times — the lower-cost setting," Richardson said. "We're not approaching this from the standpoint of saying 'How do we cut services?' or 'How do we just cut provider reimbursement rates for the sake of doing it?' But we do see an opportunity to realign the dollars that we are spending with the outcomes that we want."

The Medicaid program — originally intended to provide health care for Missouri's aging and vulnerable populations — has grown and changed since it began in 1965, when former President Harry Truman became the first enrollee.

Shortly after it started, Congress limited — by income — who could enroll. Expansion of Social Security added to the rolls in 1972. Congress added poor children to Medicaid in 1997.

The program cost $10.3 billion in Missouri in 2018.

A major opportunity for cost savings, Richardson said, would be a change to the pay model MO HealthNet uses for outpatient hospital services.

Missouri pays for those services — like emergency room visits or outpatient surgeries that don't require hospital stays — based on a percentage of what hospitals charge.

However, the reimbursement level varies "widely" from facility to facility.

And, in recent years, hospital providers outside the state (usually focusing on specific procedures, such as bariatric surgery or spinal/lumbar outpatient surgeries) received a lot more than they should have typically been paid, according to Brian Kinkade, the Missouri Hospital Association vice president of children's health and Medicaid advocacy.

Kinkade, former director of Missouri's Department of Social Services, said the state has begun correcting those situations.

"Two years ago, there were like 100 different procedures to clean up," Kinkade said. "They put them on a pay schedule and said, 'Here's what we're going to pay.' My observation is that these hospitals were highly specialized: They only did bariatric surgery, or a hospital only did knee replacements."

Kinkade said he was unaware of any new data concerning out-of-state hospitals taking advantage of MO HealthNet.

"We may pay one facility $20,000 for a procedure that we're paying a different hospital $3,000 for the identical procedure. That's not related to one facility doing a better job of performing that procedure," Richardson said. "It's simply what that facility bills."

That leaves the state susceptible to someone who wants to abuse the system, he said.

"We've got hospitals located outside the state of Missouri that are absolutely abusing that system today," he said. "I believe as we model some changes in that reimbursement methodology, we anticipate that as many as 60-plus percent of the impact will come from hospitals outside of our state."

It's an opportunity to start moving from where MO HealthNet is today — which is paying for the volume of health care services that are being provided — to something where it's paying for services that are priorities for its Medicaid participants, Richardson said.

Federally Qualified Health Centers (FQHC) offer a model of care that reaches every corner of the state.

Health centers are community-based organizations that deliver comprehensive care — oftentimes in communities where economic, geographic or cultural barriers limit access to affordable care services, according to the Health Resources & Services Administration's Health Center Program.

The Community Health Center of Central Missouri is an FQHC. Funded primarily through federal health grants, the center employs physicians and nurses and provides services to patients based on their ability to pay. It charges on a sliding scale — meaning the lower a person's income, the less they pay, while still receiving the same level of services.

The center provides primary medical care to under-insured or uninsured patients in Cole, Moniteau, Callaway and Osage counties. In addition to general medical services, it provides vision and dental care.

More than 1,300 FQHCs provide more than 11,000 sites across the nation. They provide care for one in every 12 people.

The FQHCs use a prospective payment system of reimbursement in which payment is made based on predetermined, fixed amounts. The payment amount for a particular service is derived based on a classification system of that service (for example, diagnosis-related groups for inpatient hospital services).

That pay model shows promise in saving the state some money.

"What we really like about (FQHCs) is they work in every corner of our state," Richardson said. "It's an access point and a kind of delivery model that we believe holds a lot of promise for helping us drive some of those questions of how we get value."

As Richardson's staff focuses on re-imagining MO HealthNet, there has been another push for the state to join 36 others that have expanded their Medicaid programs to cover all adults who make less than 138 percent of the federal poverty level.

According to the U.S. Department of Health and Human Services, the poverty level for a single person in a home is $12,140 (138 percent would be $16,753), for a two-person household is $16,460 (138 percent is $22,714), and for a three-person household is $20,780 (138 percent is $28,676).

Healthcare for Missouri — a coalition of voters, patients, medical professionals, businesses and community organizations committed to expanding health care access to Missourians — is conducting an expansion initiative. It hopes to get Medicaid expansion on a 2020 ballot. To assure the initiative is on the ballot, organizers have to collect more than 172,000 signatures by May.

The federal government pays 90 percent for the cost of expansion.

The petition is at healthcareformissouri.org.

Whether the state expands, the cost of the program continues — and will continue — to grow if the state doesn't make "serious reforms" to it, Richardson said.

"There's nothing about Medicaid expansion that's going to fix the underlying problems that we have with the Medicaid program today," he said. "There's nothing about it that's going to move us toward value-based care or improved outcomes."

The state expects the cost of expansion to be about $2 billion annually, of which Missouri would be responsible for $200 million.

"The way we view it is: It's not going to fix our underlying issues we see with the program. Our focus right now is trying to fix those problems," he said. "(However,) we recognize there will be a robust political conversation that happens — both in the Legislature and in the public — on what the right thing to do there is."

MO HealthNet also faces criticism about a drop this year in the number of children the program serves — about 95,000, according to some reports.

A lot of the change could be associated with an improving economy, Richardson said. The lower numbers of people enrolled in the program reflect where it was about three years ago, before an increase, he added.

On the other hand, it's not out of the possibility that bureaucracy has caused some people to fall off the rolls. The state notoriously has 63 pages of forms people would have to fill out if they applied for all the services that the DSS offers.

MO HealthNet is partnering on a project with Civilla, a nonprofit design studio dedicated to changing the way the public service institutions works, to evaluate its eligibility process.

"One of the things they focus on is trying to help states simplify their processes. I don't think that's an issue that is directly causing our enrollment issues," Richardson said. "But we are excited about it because we're always trying to make our process better."

As part of its work, the organization looks at how a state agency works with potentially 63 pages of information and how participants or end-users interact with the volume of forms.

Are there ways agencies could simplify their process, and in doing so make their state's staff more accurate? And make accessing services a little bit easier?

Civilla is expected to issue a report of findings in February.

Richardson said he decided to take the job with the idea he could do some good — and still finds the work enjoyable.

"In Missouri, we've learned a lot about what works and, frankly, what hasn't worked in some places. We think we've got the opportunity to take the benefit of that experience and build a really strong value-based payment model here in Missouri," he said. "If we do that, we'll lower the overall costs and create health improvements for our participants as a whole. That will be a big success story for everyone."

This article was edited to reflect that MO HealthNet is Missouri's Medicaid program. In its original version, two references incorrectly named the program.

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