If the Missouri Department of Social Services (MDSS) is allowed to change Medicaid payment methods without the promulgation of a rule, managed care providers will be operating under unenforceable contract terms, according to an attorney who sued over the matter in Cole County circuit court.
“It’s detrimental to the public benefit and public information because they're doing government work behind closed doors and the purpose of rule-making is transparency in the way government operates and establishes policy,” said Joe Bednar, who is representing the Missouri Hospital Association (MHA)
The MDSS is allegedly changing contracts with managed care providers and in the process is skipping proper policy procedure, according to media reports.
“There needs to be public transparency in this policy-making process when it comes to Medicaid,” Bednar told the St. Louis Record.
The proper protocol is to issue the new policy in writing not just in an email, according to Bednar, who is a partner at the Spencer Fane law firm in Jefferson City.
“We’re not taking sides but they have to put a fiscal note on it to establish what it's going to cost private sector participants just like legislation has to have a fiscal note, and that is all published through the Secretary of State's office,” he said. “The general public has to be given the ability to see for themselves in black and white what the proposed changes are, the breadth of those changes, the financial impact of those changes, and whether it's a benefit or a detriment to them.”
In November 2020, the MDSS told MHA staff that it was converting managed care full Medicaid pricing payments to directed payments for both inpatient and outpatient services because of federal concerns with the current managed care payment structure, according to the lawsuit
“The original proposal did not allow for any payment rate negotiations between hospitals and the managed care plans,” Bednar wrote in his June 11 complaint.
This isn’t the first time the issue has been litigated against the MDSS. MHA sued in 1993 and 2015.
“This is the third or fourth time they've done this and they have lost each time,” Bednar said. “The law says the public and all stakeholders have a right to understand and see what the policy is going to be and the way that’s applied. This policy will impact Medicaid recipients, Medicaid providers, and Medicaid plans.”
MHA seeks preliminary and permanent injunctive relief enjoining the defendants from executing any contract amendments related to or intended to implement the change in payment.
“The problem here is there's no public information out there to demonstrate the fiscal impact,” Bednar said. “They have to lay out the formula used and what the cost to everybody is going to be.”
The Missouri Independent reported that MDSS claimed there will be no cuts in payments as a result of the change but MHA said the change will result in losses of some $45 million a year.
“It could affect different hospitals in different ways and different providers in different ways but we don't know,” said Bednar. “Everybody's speculating and the department, quite frankly, keeps changing the rule of the policy every day. I really don't think anyone can speak authoritatively as to what's happening. We know that their own actuary said it could cost the hospitals $45 million.”