A low-income Kansas City, Mo., resident gets burned in a fire. He is transported to the University of Kansas Hospital in Kansas City, Kan., just 285 feet from the Kansas-Missouri state line.

If Missouri health care officials get their way, that patient soon could be required to seek treatment at Missouri’s closest burn unit — 130 miles away in Columbia.

Proposed changes to the Missouri Medicaid system, resulting from a court ruling last year involving the University of Kansas Hospital, could make that scenario and others like it possible as early as this summer.

“We’re very concerned about the impact of it on patients, not only in Kansas City but in all the bordering states,” said Irene Cumming, CEO of the University of Kansas Hospital. “We’re not interested in a border war.”

Court ruling

Under the new rules, which could go into effect as early as July 1, Missouri residents would have to get special approval before receiving inpatient or outpatient care at Kansas hospitals. Visits to Kansas emergency rooms still would be allowed.

But for all but emergencies, Missouri leaders want residents to stay in-state for treatment.

The proposed rule comes after a Missouri court said last April the state must reimburse the KU hospital $5.8 million for underpayments on Missouri patients from 2001 to 2003. The state’s policy was to pay out-of-state hospitals from $345 to $460 per day, compared with $1,500 per day for Missouri hospitals.

The rates are based on 17-year-old data and have “absolutely no relationship to the reasonable costs” at KU or any other out-of-state hospital, the ruling in Cole County Circuit Court said. The ruling also requires Missouri to increase payments to all out-of-state hospitals to at least $852 per day. KU officials say that is why Missouri is seeking to reduce out-of-state hospital stays.

Proposed changes to the Missouri Medicaid system could have more Missouri residents seeking treatment at Missouri hospitals rather than nearby out-of-state medical centers such as University of Kansas Hospital in Kansas City, Kan.

Christine Rackers, who directs Missouri’s Medicaid program, said the discrepancy in payments was tied to a special tax hospitals pay to the state to participate in Medicaid. She said the tax also was the reason behind the new rule changes.

“We’re interested in keeping the business as much as possible in Missouri,” she said. “Missouri hospitals pay a special tax to work in the state of Missouri. I’m very interested in making sure we promote and support Missouri hospitals.”

Rackers insisted the change wouldn’t harm patient care, and she said many states required similar prior authorization.

Effects on treatment?

But the KU hospital’s chief financial officer, Scott Glasrud, said he had concerns about how the new policy would affect treatment in several areas.

Patients who are first treated in the emergency department might have to be transferred to another hospital for ongoing care, for example. People who receive outpatient treatment may have to change physicians, and KU emergency department physicians may have to make tough decisions about what is considered an emergency and thus is eligible for reimbursement.

KU treated about 2,000 Missouri Medicaid patients in the last fiscal year, amounting to $3 million in revenue from Missouri. About half of that volume came in the emergency department.

“We’re committed to the downtown area, irrespective of the state line,” Glasrud said. “We just want to serve that patient population the best we can. We aren’t looking at their address.”

The issue also has drawn concern from Kansas legislators and Gov. Kathleen Sebelius, who wrote a letter last week to Missouri officials urging them to quash the change.

“The proposal amendment and rule will disrupt current community-wide medical services and disregards the best interests of these citizens with regard to continuity of care,” Sebelius wrote.

Sen. Stephen Morris, R-Hugoton, said legislative leaders planned to contact government officials in Missouri with a similar request.

“It’s been a thorn in our side,” he said. “Missouri has liked to treat us as a second-class citizen.”

Morris said he’d heard a handful of legislators suggest Kansas shouldn’t allow its Medicaid patients to be treated at Missouri hospitals.

But Kyle Kessler, a spokesman for the Department of Social and Rehabilitation Services, said the state had no plans to change its reimbursement policy.

“I don’t know if playing tit-for-tat with Missouri is the best thing to do,” he said.

Thomas Lenz, associate regional administrator for Medicaid, said the proposed change in policy was well within federal regulations for Medicaid. The policy must be approved by federal officials before it is allowed to go into effect.

“We don’t see any giant red flags,” he said. “Our regulations are fairly flexible in this area.”