Sen. Holly Rehder’s Legislative Column for Feb. 11, 2021

Fixing Medicaid

Among the many new experiences I’ve had since coming to the Senate has been an increased focus on health care issues. As a member of the Senate’s Health and Pensions Committee I’m now exposed to the complexities of health care programs at a much deeper level than I ever was while serving in the House of Representatives. One thing is increasingly clear to me: Medical costs consume a tremendous portion of Missouri’s state budget, and make it difficult to address many other needs. Many other programs go without adequate funding for years, but the social services piece of the budget pie, with Medicaid being the largest part, continues to grow. Now that voters have approved Medicaid expansion, I’m worried the percentage of the budget devoted to health care is going to grow exponentially.

I believe we must be incredibly mindful of our tax dollars. We need to look at how we’re delivering essential health care services and see if there aren’t ways to save money and make the programs more efficient. With that goal in mind, I was encouraged by a bill one of my colleagues brought before the Health and Pensions Committee. Senate Bill 103 reforms the way Missouri reimburses hospitals for outpatient services provided to Medicaid patients. During our hearing on the bill, I learned Missouri may be the only state in the nation that reimburses hospitals for outpatient services on a set percentage of the invoice. It doesn’t matter what a procedure costs in other states, or even at a hospital in the next county. Whatever the hospital bills us, the state pays a percentage of that. The problem with this system is obvious.

Senate Bill 103 replaces our current percent-of-invoice method to one that bases Medicaid reimbursements on established fee schedules developed by the Medicare program for seniors. My colleague’s bill says Mo HealthNet will pay 50 percent of the Medicare rate, but he acknowledged that figure was just a starting point for discussion. The final rate could be very different. What’s important is having a set rate. Several witnesses who testified in opposition to the bill were actually supportive of using the Medicare fee schedules. They just had a problem with the percentage. That, to me, is progress. I think everyone agrees the goal is to find a more efficient and sustainable framework for controlling Medicaid costs.

On a related note, I introduced legislation this week to protect patients who fall victim to contract negotiation hold-ups between hospitals and managed care companies. It’s come to my attention that sometimes children – Medicaid patients are most commonly children – are denied services at one hospital and sent to seek treatment at another facility far away because they are considered out-of-network for the time being. For example, it was brought up in committee testimony that due to a Boone County hospital not having their contract in place, some children are being sent to St. Louis for medically necessary treatments. Now that hospital could, in fact, provide the service to the child and get reimbursed at 90% of the Medicaid fee-for-service schedule. Instead, they are choosing to send some families several hours away for treatment. The hospital and managed care contracts typically pay the hospitals well over 100% of the Medicare fee schedule – some as high as 180%, I’ve been told. So, often the service is denied not because it’s not available, and not because they are not allowed to provide the service, but because the hospital is in the process of negotiating a new managed care contract. As someone who grew up on welfare and in poverty – I fully understand the hardships this is placing on these families, seemingly to make a point. My hope is that the bill I filed today will fix this issue.

My legislation, Senate Bill 504, says if you are a not-for-profit hospital, and you take Medicaid patients, and a Medicaid patient comes to you for a service you normally provide, you can’t turn them away.  You can’t send them three hours away to prove a point, which is what it looks to me is happening. I find that infuriating.

These are just two of many issues that need to be fixed in our health care system. Medicaid is a huge part of Missouri’s budget – about a third, in fact – and it keeps growing. The same thing is true outside the Medicaid system. Health care continues to grow in cost for everyone, and it’s getting to the point where none of us can afford it. I’m committed to finding ways to make health care more affordable – for all of us.

Contact Me

I always appreciate hearing your comments, opinions and concerns. Please feel free to contact me in Jefferson City at (573) 751-2459. You may write me at Holly Rehder, Missouri Senate, State Capitol, Rm 433, Jefferson City, MO 65101, send an email to or visit