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State Scales Back Medicaid Super Waiver

State Capital Bureau

April 27, 1995

See also the sidebar story WAIVBAR.HTM.

JEFFERSON CITY _ Missouri has drastically scaled back its request for a "super waiver" from the federal government to allow the state to design its own system for providing benefits to Medicaid recipients.

When the state submitted the request in June, 1994, it proposed that Medicaid recipients throughout the state be switched to a managed care system _ restricting physician choice by Medicaid recipients.

The state has planned to use savings from the more efficient managed care system to provide low-cost, government-subsidized health insurance to those living below 200 percent of the federal poverty level.

But under its current proposal, the state would provide this low-cost insurance only to children of the lower-income families. These families would be allowed to purchase Medicaid policies for about $17 a month for each child.

"With the changes at the federal level with caps and the uncertainty of Medicaid, we thought it would be more responsible to start with the children first," said Ila Irwin, principal assistant in the Medical Services Division of the Social Services Department.

Rather than seeking a statewide managed-care system, the state has decided to implement managed care only in the St. Louis area, for now.

But the state plans to phase in the switch to managed care statewide by 1997, Irwin said. The next region to be phased in will be mid-Missouri, and the state will begin soliciting bids from HMOs in the region next month.

The managed-care provision was approved by the federal government several years ago under a separate waiver.

That waiver allowed Medicaid recipients in the Kansas City area to be put into a managed care system, but the waiver is not specific to Kansas City; it applies statewide.

Even though the state already had the authority to make the switch to managed care in St. Louis, the managed care system had to be described and approved for the state to get permission from the federal government to cover the expanded population.

"It's more than just having the authority to switch to managed care," said Dick Brummel, Medicaid director for the federal Health Care Finance Administration, the agency responsible for approving the state's request.

"In order to get (this) waiver, you have to be testing some hypothesis," Brummel said. "If the hypothesis you're testing deals with the effects of managed care, you have to describe the system and the way care will be delivered. Managed care does not mean just one thing; there are different ways of doing it."

The state's revised proposal would exempt the elderly and the disabled from the managed care system.

That would leave under managed care AFDC clients, pregnant women and children eligible for Medicaid.

"We just want to take this one step at a time and make sure the health care provider system is equipped and set up to be responsive to what we want," Irwin said.

The change to managed care will provide cost savings and increased access to primary care, Irwin said.

"The savings will come from better utilization of services," she said. "Patients will be assured access to primary care and won't have to show up in an expensive emergency room or go see a specialist first."