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Missouri Medicaid Expansion-Approved by Voters – Opposed by Legislators

By Jean Covillo, DNAP, MA, CRNA

March 27, 2021

Until Medicaid expansion actually takes effect, non-disabled adults without children are not eligible for Medicaid in Missouri (MO HealthNet) regardless of how low their income is, and parents with dependent children are only eligible with incomes that don’t exceed 22 percent of the poverty level.  Do you know what 22% of the federal poverty level (FPL) is? For those without a calculator handy, I’ll do the math for you: Anyone making less than $2,833.60/year for a single person. Since Missouri only allows households with dependents to qualify, a family of 2 must make less than $3,832.40/ year or $319/Month in order to be eligible for Medicaid.  Only Texas and Alabama have lower Medicaid eligibility caps, at 18 percent.

Republican lawmakers blocked Medicaid expansion funding from reaching the Missouri House floor on Thursday, posing a setback for the voter-approved plan to increase eligibility for the state health care program.The House Budget Committee voted along party lines not to pass a bill allowing Missouri to spend $130 million in state funds and $1.6 billion in federal money to pay for the program’s expansion. Under the Affordable Care Act, the federal government picks up 90% of the tab on expanding Medicaid.  Republicans sited cost as one of the biggest reasons for the obstruction.   Let’s take a closer look at this flawed rationale.

In 2021, the national average unsubsidized premium for a 40-year-old non-smoking individual purchasing coverage through the Marketplace was $436 per month for the lowest-cost silver plan and $328 per month for a bronze plan, which equates to nearly eighty percent of income for those at the lower income range of people in the gap (below 41% FPL) and nearly a third of income for those at the higher income range of people in the gap. My opinion?…Get real!  No one can be expected to use 80% of their paycheck to pay for health insurance regardless of how much money is earned, let alone a salary this low.

Missouri citizens rightly recognized this for what it is: A serious health crisis.  In August of 2020 Missourians did the right thing by joining 38 other states that had voted to approve Medicaid expansion.  The amendment was approved by a margin of 53.2 to 46.7 percent allowing Medicaid to expand eligibility to people between the ages of 19 and 65 as long as their income is at or below 138 percent of the federal poverty level. In other words Medicaid  in Missouri will now include single folks making less than $17,774.40 and families of 4 making less than $36,570.  The expansion was estimated to cover  230,000 Missouri individuals and has a July 1 deadline for implementation.  Sounds great right? Well …not quite. Although the amendment was approved by a majority of the voters, legislators are now refusing to fund the Program-effectively saying the voters don’t know what’s best.  Without passing a bill that outlines funding, the plan cannot be expanded.

Missouri’s history of missing out on billions in federal funding

In states that expand Medicaid, the federal government paid the full cost of expansion through 2016. Starting in 2017, the states gradually started to pay a share of the expansion cost, but the states’ portion according to federal statute, would never be more than 10 percent. Because of the generous federal funding for Medicaid expansion, states like Missouri that rejected it missed out on billions of federal dollars that would otherwise have been available to provide healthcare in the state.  And they are continuing to miss out on added revenues. A University of Missouri School of Medicine study in 2012 concluded that Medicaid expansion would be highly beneficial to the Missouri economy and its citizens by increasing jobs, increasing tax revenue from newly employed citizens, and increased gross state product (GSP).  These increases in state revenues over the 2014-2020 years were estimated to net  1 billion dollars  in revenues over expense. But Missouri legislators apparently didn’t read the report.  Consequently, in June 2014, the Missouri Economic Research and Information Center announced that healthcare job growth in Missouri had slowed considerably since 2012, and was falling behind compared with states that had expanded Medicaid. Healthcare is the state’s largest employment sector.

From 2013 through 2022, Missouri was projected to give up $17.8 billion in federal funding by not expanding Medicaid. That number will end up being a little lower, however, since Medicaid expansion is or was expected to take effect at some point in 2021. Apparently now, it is not up to the voters and instead is in the capable hands of Mo legislators who think they know best. 

Urban and suburban voters in Missouri largely approved the Medicaid expansion, as did nearly a third of the rural voters. Without the roughly 102,000 rural voters who supported the amendment in August 2020, the Amendment would have failed.  However, Republican state Representative Sara Walsh cited the amendment’s low support among rural voters as a reason to oppose its funding.  State Representative Ed Lewis said that opposing the bill also makes sense considering that the 53.2 percent of voters who approved the expansion don’t amount to a majority of either the state’s eligible voters or its population.  If that’s the argument why would these same votes be considered a majority for winning legislative candidates? I don’t follow the logic..do you?

What happens if  Missouri legislators refuse to fund the Program?

Missouri’s Medicaid program does not currently cover most adults without children. Only the disabled, children and parents with incomes under 18% of federal poverty level — less than $5,800 a year for a family of four — are eligible. It is one of the lowest eligibility thresholds in the nation. The expansion will allow adults earning up to 138% of the federal poverty level to be covered. This expands eligibility to those families of 4 to $36,570.00.

Hospitals in Missouri that treat uninsured patients have been especially hard-hit, as their federal disproportionate share hospital funding has started to be phased out (it was supposed to be replaced by Medicaid funding) and the uninsured rate has remained higher than it would have been with Medicaid expansion in place. As a result of Missouri’s decision to opt out of Medicaid expansion, hospitals in the state were projected to lose $6.8 billion between 2013 and 2022. Refusal to fund the program will force more rural hospitals to close.

The August 2020 vote was a citizen mandate in which many Republican citizens supported. Republicans enjoyed the overwhelming majority of the elected candidates which is a clear indication these voters supported the expansion amendment. As such, these Republican constituents will view their winning  legislators’ opposition to the expansion as a betrayal of their vote. The COVID-19 relief bill recently signed into law contains $1.1 billion in funding specifically allocated towards expanding Medicaid. The federal funds could also help the state’s rural hospitals and healthcare industry.

What is the real reason for legislator opposition?

Although Republicans have cited the cost, many have long resisted expanding Medicaid in Missouri, likely due to the corresponding federal requirements to provide women’s health care resources such as contraception as a condition of federal funding.  Across the capitol this week, a conservative effort to block Medicaid from paying for certain contraceptives has stalled approval of annual funding for the entire program. Late Tuesday night, Sen. Paul Wieland, Republican, amended a routine hospital tax bill that helps pay for Medicaid by inserting a provision that prohibits the program from covering “Any drug or device approved by the federal Food and Drug Administration that may cause the destruction of, or prevent the implantation of, an unborn child.” Some oral or implanted contraceptives could fit that description. Federal regulations require all insurance to cover contraceptives, with religious exemptions. A separate rule requires Medicaid programs to cover family planning services but does not explicitly spell out contraceptives. Missouri law already prohibits Medicaid coverage of abortion except in cases where the mother’s life is at risk. 

In Missouri, Gov. Mike Parson opposed the expansion but said he would move forward with implementation after passage of the ballot question last year. It is difficult to see how he will manage that when Budget Chair, Cody Smith, Republican has been busy separating money from Parson’s proposed $34 billion state budget, signaling his intent to obstruct Medicaid funding efforts. Smith has also cut $245 million of general revenue spending from Parson’s proposed budget, including some money for new mental health centers. In the latest failed Medicaid funding bill attempt, nine Democrats voted for funding and 20 Republicans, including Smith, voted against. Missouri Secretary of State Jay Ashcroft commended Smith and committee vice chair Dirk Deaton, Republican on a Twitter post, for their “commitment to fiscal responsibility.” According to KC Star reporting, Deaton stated the following in defense of his opposition, “It is to give free health care, government health care to able-bodied adults who can do for themselves.” I would like to know who he is appealing to with this ridiculous argument: It’s certainly not the Republicans who voted for Medicaid expansion back in August of 2020. 

My two cents-(for what it’s worth)

Although Medicaid expansion has been approved by Missouri voters, and Governor Parsons has expressed he would implement it-it won’t move forward without passing a bill designed to fund the program and Republicans are refusing to do it.  The majority of the funding is available now through the COVID Relief bill and state budgetary allocations-if you can pry it away from Budget Chair, Rep. Cody Smith. Funding Medicaid expansion is critical for Missourians. Missourians expressed their approval when the amendment passed with Republican and Democratic support. Missouri state legislators were elected by these people and can just as easily be removed through the same process.  I wonder if Representatives Sarah Walsh, Ed Lewis, Cody Smith, and Dirk Deaton will consider that the 53.2 percent of voters who could vote them out in the next election, will then amount to a majority of  the state’s eligible voters or its population? We’ll have to wait and see.  In the meantime, you can click on their name and send them an email if you think it will help.

Remodeling Anesthesia Delivery

Eliminating Anesthesia Subsidies

By Jean M. Covillo, CRNA, MA, ARNP

EA Ladder Man

As CMS is considering measures of efficiency, Excel Anesthesia LLC offers insight, along with cost-effective recommendations, for remodeling the anesthesia care delivery practice model.  These suggestions take a closer look at the various existing anesthesia practice models, especially those requiring subsidies. Literature indicates that CRNAs acting as the sole anesthesia provider are the most cost-effective model for anesthesia delivery, (1) without any measurable difference in the quality of care between CRNAs and other anesthesia providers, or by type of anesthesia delivery model. (2) 

The standard anesthesia care team model utilizes “medical direction” billing, by anesthesiologists with a ratio of one anesthesiologist per a maximum of four CRNAs/AAs. Increasingly, facilities and stakeholders are examining safe, cost-effective alternatives to offset the growing prevalence of unnecessary anesthesia subsidies.  Armed with the facts, many are opting for a total Remodel of the traditional “anesthesia care team”, by implementing the model of care that is best suited for their specific patient clientele; saving millions without sacrificing patient safety.

This is not meant to imply anesthesiologists are not needed nor considered necessary in some facilities; rather the existing “medical direction anesthesia care team model” is not cost-effective and alternatively has not been shown to be a safer model. (2) When facilities choose to utilize anesthesiologists, they can do so more cost-effectively by removing ratio restrictions, (1:4) as long as they are utilizing CRNAs.  Anesthesiologists must supervise/medically direct AAs at no greater than a 1:4 ratio, therefore AAs are not eligible to participate in this model.  Consequently this approach takes advantage of more CRNAs at a lesser expense, while reducing the expense of the total number of anesthesiologists.  Eliminating the medical direction model frees the Anesthesiologist from the inefficiency of directing CRNAs which further enables both to provide separate billable services to more patients.  Both providers are then able to administer care to their own patient volume rather than sharing the care and reimbursement of one patient.  These services will then result in each receiving 100% of the awarded reimbursement rather than splitting this same amount by 50%, which occurs in the “medical direction model” or an even lesser amount as found in the “supervision model”.

In summary, the costs incurred by facilities utilizing the medically directed anesthesia care team model are by far, the highest and most inefficient of all models utilized.  The following describes some of the reasons why:

MEDICAL DIRECTION – 7 Steps Must Be Completed by Anesthesiologists to Qualify for Medicare reimbursement

  • Under the medical direction practice model, the medical directing anesthesiologist must complete seven steps in order to bill for this modality. CMS has clearly stated that medical direction is a condition for payment for anesthesiologist services and not a quality standard. (4) One of the seven necessary steps for making a medical direction claim includes being “present at induction”, yet oftentimes this is delayed. For every minute spent waiting for an anesthesiologist to arrive and be “present at induction”, some of the costliest resources in the hospital are wasted. The clock is running on the surgeon, circulating nurse, scrub tech, and nurse anesthetist waiting in the operating room. Waiting costs cascade throughout the day, postponing the surgery schedule to require overtime and on-call staff, delaying the surgeon’s rounds to affect patient care and discharge of the patient from the healthcare facility. Waiting costs also
    add opportunity costs, diverting needed resources from other patient care.

 

  • Another of the seven necessary steps in making a medical direction claim includes the anesthesiologist being “present at emergence from anesthesia”. However, strong evidence in the literature shows that anesthesiologists fail to comply with federal requirements, either the Part A conditions of participation or Part B conditions for coverage. Lapses in anesthesiologist supervision are common even when an anesthesiologist is medically directing as few as two CRNAs, according to a 2012 study published in the journal Anesthesiology, (5) the professional journal of the American Society of Anesthesiologists. The authors reviewed over 15,000 anesthesia records in one leading U.S. hospital, and found supervision lapses in 50 percent of the cases involving anesthesiologist supervision of two concurrent CRNA cases, and in more than 90 percent of cases involving anesthesiologist supervision of three concurrent CRNA cases. According to the 2012 AANA Annual Membership Survey, anesthesiologists are present for emergence for only 5 percent of medically directed cases. The combined costly delays associated with case start times and keeping a patient anesthetized until the anesthesiologist arrives for emergence results in sky rocketing hospital and surgery center costs and an overall devastating loss in profitability and sustainability.

 

  • Failure to comply with all 7 steps results in the inability to bill Medicare as “medical direction” resulting in the need to bill “supervision by anesthesiologist or Non- medical Direction”.  Supervision results in a reduction of claim amount, reduction of claim reimbursement, and danger of oversight leading (billing Medical Direction vs. Supervision) to an increased risk of Medicare audit, loss of Medicare provider eligibility for participation (part-A and part-B); and in some cases may lead to an investigation of fraud. (8)

SUBSIDIES:

  • According to a nationwide survey of anesthesiology group subsidies, (6) 98.8 percent of responding hospitals reported that they paid an anesthesiology group subsidy. Hospitals pay an average of $160,096 per anesthetizing room, to anesthesiology groups; an increase of 13 percent since the previous survey in 2008. Translated into concrete terms, a hospital with 20 operating rooms pays an average of $3.2 million in anesthesiology subsidies. Anesthesiology groups receive this payment from hospitals in addition to their direct professional billing, which also adds to the costs the hospital must pay.

 

REIMBURSEMENT:

  • Anesthesiologist Assistants (AAs) are UNABLE to provide service without an anesthesiologist supervising or medically directing.  The ratio of Anesthesiologists to AAs cannot exceed one anesthesiologist to four AAs, which is the same ratio for CRNAs, however CRNAs can work non-medically directed with no ratio requirements. (7)(8)
  • When AAs provide service as “medically directed”, the reimbursement is the same as a “medically directed” CRNA. (8)
  • CRNAs ARE able to provide service WITHOUT an anesthesiologist “medically directing/supervising” and are reimbursed by Medicare for the procedure at the same rate as an anesthesiologist working alone or the total combined payment reimbursement of both an anesthesiologist and CRNA under “medical direction”. (8)

 

MEDICARE BILLING REIMBURSEMENT RULES

 

Delivery Model CRNA Anesthesiologist
Anesthesiologist alone (Base units + Time Units) * Conversion factor
CRNA Non-Medically Directed (Base units + Time Units) * Conversion factor
Medical Direction (Base units + Time Units) * Conversion factor *0.5 (Base units + Time Units) * Conversion factor *0.5
Supervisory (Base units + Time Units) * Conversion factor *0.5 Maximum of Four units- regardless of time

 

*Time Units:  1 Time Unit = 15 Minutes

*Conversion Factor: Specific to Region (Average is $18.00/ Unit)

SALARY COST:

  • Anesthesiologist-$336,000/yr (1)
  • CRNA-$170,000/yr (1)
  • AA-$170,000/yr (7)

 

RECOMENDATIONS:

  • INCREASE the utilization of Non-Medically Directed CRNAS (Non-medically directed by an anesthesiologist) in order to eliminate overall expense, reduce the risk of Medicare fraud/and or reduced billing amounts due to supervision ratios.
  • REDUCTION/Replacement of the number of consulting anesthesiologists with more CRNAs.
  • Consider on-site Anesthesiologists to provide other billable services while remaining immediately available for consultation if the facility considers it necessary and the patient clientele warrants it.
  •  Reduction or elimination of AA employees since they are incapable of billing for services as “non- medically directed” and therefore would not be able to provide service under this cost-saving model. (8)

SUMMARY:

Healthcare facilities are looking for sustainable, safe and efficient alternatives to reduce the overall healthcare costs.  CRNAs acting independently provide anesthesia services at the lowest economic cost, and net revenue is likely to be positive under most circumstances.  The supervisory model is the second lowest cost, but reimbursement policies limit its profitability.  The non-medically directed CRNA is the only model likely to have positive net revenue in venues of low demand, such as may be found in rural hospitals or facilities in which there are fewer rooms or patient volume. (1)

Other models, including medical direction models where one anesthesiologist directs two to four CRNAs are likely to require subsidies in cases where overall demand is not consistent with full utilization of facilities. In facilities where demand is high and relatively stable, the medical direction 1:4 model is relatively stable however once the operating rooms begin to diminish in volume as is typical throughout the day, it quickly becomes very costly and inefficient.  The medical direction 1:1 model is almost always the least efficient model. (1)(4) Finally, if the facility chooses to follow the non-medically directed model, AAs cannot be utilized, as they are only eligible to provide service under an anesthesiologist medically directed model. (7)(8)

Taken with the average expense of an anesthesiologist salary at close to twice that of a CRNA, the loss of net revenue, and the addition of subsidies, it is no wonder healthcare facilities are taking another look at the overall structure and remodeling their anesthesia department.

(1) Paul F. Hogan et. al, “Cost Effectiveness Analysis of Anesthesia Providers.” Nursing Economics. 2010;
28:159-169.

(2) Brian Dulisse, Jerry Cromwell, “No Harm Found When Nurse Anesthetists Work Without Supervision By Physicians.” Health Affairs. August, 2010.

(3) 42 CFR §415.110(a), Conditions for payment: Medically directed anesthesia services.

(4) 63 FR 58813, November 2, 1998. American Association of Nurse Anesthetists
AANA – 4

(5) Epstein R, Dexter F. Influence of Supervision Ratios by Anesthesiologists on First-case Starts and Critical Portions of Anesthetics. Anesth. 2012;116(3): 683-691.

(6) Healthcare Performance Strategies. Anesthesia Subsidy Survey 2012. American Association of Nurse Anesthetists
AANA – 5

(7) American Academy of Anesthesiologist Assistants, 2013 Website:  www.anesthetist.org/faq#salaries

(8) CMS Manual System; Pub 100-04 Medicare Claims Processing; transmittal 2716; 140.3.3-Billing Modifiers

http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2716CP.pdf