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Medicaid Changes Planned for St. Louis

State Capital Bureau

April 27, 1995

This is a sidebar to the main story WAIVER.HTM

JEFFERSON CITY _ Although the state has not received final approval from the federal government for covering the expanded population of children, it is spending money to make preparations for implementing the program.

The cost of doing this is outweighed by the risk of the state not being ready to implement the program if and when approval is granted, said Dick Brummel, Medicaid director of the federal Health Care Finance Administration.

"It would be much less of a problem if the state spent some of its administrative resources for a program that didn't pan out than if the program is approved and the state isn't ready," Brummel said. "It would be a much greater problem if the computer systems weren't ready to make payments and the beneficiaries were not enrolled (by the start date)."

"We bureaucrats are willing to take risks with our resources so that the beneficiaries and providers don't have to take risks with their services and health," he said.

Making preparations to implement this program before it is approved isn't necessarily standard procedure in other states, but it is a good idea because it will allow the state to make the transition more smoothly, Brummel said.

The state currently is negotiating with seven HMOs in St. Louis to provide coverage to the selected Medicaid recipients who will be covered under the proposal.

But these preparations do not represent a large risk to the state because they probably would not be changed in the negotiations between the state and the federal government, Brummel said.

"The infrastructure, the computer systems and the contracts with providers probably would not be affected," Brummel said.

Even if approval for the waiver is not granted, the state will go ahead with its plans to switch the St. Louis area Medicaid recipients to a managed care system, said Ila Irwin, principal assistant in the Medical Services Division of the Social Services Department.

This can be done under a separate waiver that has already been approved, and many of the preparations the state is making now would need to be made anyway before the switch can occur, Irwin said.

"The bulk of the cost is getting bids and negotiating contracts with HMOs," she said. "The cost of adding in the expansion population is minimal."

The state has set August 1 as the start date for making the switch to managed care, and for covering the expanded population if the super waiver is approved.

The federal government has acknowledged that date and is working to accommodate the state's schedule.

"I can't give you a definite timetable, but we know August 1 is the start date, and the state will need approval early enough so it will have some extra time before then to get it set up," said John Woody, a health insurance specialist with the Health Care Finance Administration.

With the preparations the state already has made, it should be able to implement the program within one or two months of being granted approval, Brummel said.

"Looking at similar programs in other states, every one has been approved, so I don't anticipate a problem with this one," Woody said.

The next and last step in the approval process is establishing a list of terms and conditions for the way the program will be administered, Woody said.

Once the program is approved, the state must get appropriations authority from the state legislature to cover the expanded population.