Health
Policy for
Low-Income
People in
Mississippi
Leighton Ku
Alicia Berkowitz
Frank Ullman
The Urban Institute
Marsha Regenstein
Economic and Social Research Institute
State Reports
Assessing
the New
Federalism
An Urban Institute
Program to Assess
Changing Social Policies
Health
Policy for
Low-Income
People in
Mississippi
Leighton Ku
Alicia Berkowitz
Frank Ullman
The Urban Institute
Marsha Regenstein
Economic and Social Research Institute
State Reports
Assessing
the New
Federalism
An Urban Institute
Program to Assess
Changing Social Policies
The Urban
Institute
2100 M Street, N.W.
Washington, D.C. 20037
Phone: 202.833-7200
Fax: 202.429-0687
E-Mail: [email protected]
http://www.urban.org
Copyright q January 1998. The Urban Institute. All rights reserved. Except for short quotes, no part of this book may
be reproduced in any form or utilized in any form by any means, electronic or mechanical, including photocopying,
recording, or by information storage or retrieval system, without written permission from The Urban Institute.
This report is part of The Urban Institute’s Assessing the New Federalism project, a multi-year effort to monitor and
assess the devolution of social programs from the federal to the state and local levels. Project codirectors are Anna
Kondratas and Alan Weil. The project analyzes changes in income support, social services, and health programs. In
collaboration with Child Trends, Inc., the project studies child and family well-being.
The project has received funding from the Annie E. Casey Foundation, the Henry J. Kaiser Family Foundation, the
W.K. Kellogg Foundation, the John D. and Catherine T. MacArthur Foundation, the Charles Stewart Mott Foundation,
the Commonwealth Fund, the Robert Wood Johnson Foundation, the Weingart Foundation, the McKnight
Foundation, and the Fund for New Jersey. Additional funding is provided by the Joyce Foundation and the Lynde and
Harry Bradley Foundation through a subcontract with the University of Wisconsin at Madison.
The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to The Urban Institute, its trustees,
or its funders.
The authors thank the many state, county, and local officials and others who participated in interviews and provided information.
About the Series
A
ssessing the New Federalism is a multi-year Urban Institute project
designed to analyze the devolution of responsibility from the federal
government to the states for health care, income security, employment and training programs, and social services. Researchers monitor
program changes and fiscal developments. In collaboration with Child Trends,
Inc., the project studies changes in family well-being. The project aims to provide timely nonpartisan information to inform public debate and to help state
and local decisionmakers carry out their new responsibilities more effectively.
Key components of the project include a household survey, studies of policies in 13 states, and a database with information on all states and the District
of Columbia, available at the Urban Institute’s Web site. This paper is one in a
series of reports on the case studies conducted in the 13 states, home to half of
the nation’s population. The 13 states are Alabama, California, Colorado,
Florida, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New
York, Texas, Washington, and Wisconsin. Two case studies were conducted in
each state, one focusing on income support and social services, including
employment and training programs, and the other on health programs. These 26
reports describe the policies and programs in place in the base year of this project, 1996. A second set of case studies to be prepared in 1998 or 1999 will
describe how states reshape programs and policies in response to increased
freedom to design social welfare and health programs to fit the needs of their
low-income populations.
The income support and social services studies look at three broad areas.
Basic income support for low-income families, which includes cash and nearcash programs such as Aid to Families with Dependent Children and Food
Stamps, is one. The second area includes programs designed to lessen the
dependence of families on government-funded income support, such as education and training programs, child care, and child support enforcement. Finally,
the reports describe what might be called the last-resort safety net, which
includes child welfare, homeless programs, and other emergency services.
The health reports describe the entire context of health care provision for
the low-income population. They cover Medicaid and similar programs, state
policies regarding insurance, and the role of public hospitals and public health
programs.
In a study of the effects of shifting responsibilities from the federal to state
governments, one must start with an understanding of where states stand.
States have made highly varied decisions about how to structure their
programs. In addition, each state is working within its own context of privatesector choices and political attitudes toward the role of government. Future
components of Assessing the New Federalism will include studies of the variation in policy choices made by different states.
iv
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
Contents
Methodological Notes vii
Highlights of the Report
1
Overview of Mississippi: Thumbnail Sketch of the State 7
Sociodemographic Portrait of Mississippi 7
Economic Status 7
Health Insurance and Health Conditions 9
Political Environment 10
Roadmap to the Rest of the Report 10
Setting the Policy and Budget Context 13
Recent Legislative Issues 13
State Health Programs 15
Overview of State Health Expenditures 15
Medicaid Budget Trends 16
Comparisons to National Expenditures 18
Department of Health 21
Budget Prospects 21
Potential State Responses to Additional Flexibility and
Reduced Funding 22
Providing Third-Party Coverage for the Low-Income Population 23
Medicaid Eligibility 24
Breadth of Medicaid Benefits
Insurance Reforms 25
High-Risk Pool 27
25
Financing and Delivery System 29
Managed Care 29
Mergers and Conversions 30
Certificate of Need 31
Medicaid Managed Care 31
Medicaid Payment Policies 34
Disproportionate Share Hospital Payments 36
Delivering Health Care to the Uninsured and Low-Income Populations 39
State Health Department 39
Funding History of the Public Health Budget 40
Public Health Priorities 40
Safety Net Providers across the State 42
Safety Net Providers in the Jackson Area 44
Long-Term Care for the Elderly and Persons with Disabilities 49
Medicaid Long-Term Care Utilization and Expenditures 49
Long-Term Care Facilities 50
Long-Term Care for the Elderly 51
Long-Term Care for Younger Persons with Disabilities 53
Challenges for the Future
57
Financial Health 57
Health Care Delivery and the Market 58
Conclusion 59
Notes 61
Appendix: List of People Interviewed 63
About the Authors 65
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HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
Methodological Notes
T
his case study of health policy in Mississippi is based on interviews
conducted in April 1997 and on our review of reports and other written documents. Before beginning, we must acknowledge an unavoidable gap in our methodology for this study of Mississippi. After we
requested interviews with key officials in the Office of the Governor, the
Division of Medicaid, and the Department of Human Services, Governor Kirk
Fordice responded that they were unable to meet with us during our visit.
Since many executive branch officials did not meet with us, we are limited in
our ability to understand state policy options and choices. Hoping to reduce
any unintentional errors or omissions, we sent draft materials to the Division
of Medicaid, which kindly commented on some of the materials. Officials in
other agencies, including the Departments of Health, Mental Health, and
Insurance, were able to meet with us, as were legislative officials, health care
providers, advocates, representatives of professional associations, and other
stakeholders.
Highlights of the Report
W
hile many states are undergoing rapid health policy changes and
upheavals, Mississippi has followed a different course. One reason is that this state starts out with economic and health disadvantages, such as poverty and poor health conditions, at a level
not faced by other states. Another factor is that public and private payers have
been less insistent about reducing health care spending than in other states.
Thus, for example, capitated managed care has grown rapidly elsewhere but
comprises only a small share of the market in Mississippi.
Mississippi has a number of long-standing socioeconomic and health problems that create serious challenges in efforts to aid low-income families. The
proportion of residents with incomes below the federal poverty level (23 percent) is among the highest in the states. About a third (34 percent) of the children in the state live below the federal poverty level. The state also has a relatively high rate of uninsurance (20 percent among the nonelderly). The high
uninsurance rate is primarily caused by a low level of employer-sponsored
health insurance coverage, which in turn is a product of the state’s high rates
of unemployment and agricultural work. In addition, Mississippi residents
have relatively poor health status, as measured by rates of premature mortality, cardiovascular disease, motor vehicle deaths, and infant mortality. Last,
there is a shortage of physicians and other health care providers, especially in
rural areas, which may lead to problems of access to medical care.
Despite these underlying difficulties, the state has many reasons for optimism. Its economy has grown rapidly, and the state government is fiscally
strong, partly because of a boost in revenues from legalized gambling. New
developments, including funds from the state’s tobacco lawsuit settlement and
funds for the new State Children’s Health Insurance Program, suggest that the
state should have resources for additional health expenditures in the future.
To earn the State Children’s Health Insurance Program funds, the state needs
to provide about $10.7 million in state matching funds. The tobacco settlement is a plausible source of state matching funds; however, many issues surrounding the settlement remain unresolved. It is worth noting that Mississippi’s
attorney general led the landmark effort by states to sue tobacco companies on
the basis of smoking-related medical costs under Medicaid.
Medicaid is the main health insurance program for poor people; there are no
other state insurance programs for them. Although Medicaid eligibility criteria
are relatively strict by national standards (but similar to those of other Southern
states), one in six nonelderly residents is served by Medicaid. Mississippi also
has a relatively extensive health care safety net—composed of public health
departments, nonprofit community health centers, and public (mostly county)
hospitals—that provides free or reduced-price health services. In large measure because of this safety net system, Mississippi has one of the highest child
immunization rates of any state.
Mississippi has been unusually effective in using federal funds to subsidize Medicaid costs. Because of the state’s low income level, every state dollar
is matched by more than three federal dollars under the basic Medicaid match
rate. The state has been able to take further advantage of this high match rate
through extensive use of its Medicaid disproportionate share hospital (DSH)
program, in which it uses funds from public hospitals to count as state matching dollars. Between state fiscal years 1991 and 1997, total Medicaid funding
rose an average of 14.5 percent annually (total spending was $1.8 billion in
1997), but the increase in state general funds for Medicaid was just 5.0 percent
per year (state general fund spending was $209 million in 1997). The balance of
funding in 1997 came from provider revenues ($194 million) and federal matching funds ($1.4 billion). Whereas other states undertook a number of initiatives in the early 1990s to reduce Medicaid spending growth, Medicaid spending increases were not considered a major fiscal problem in Mississippi. The
growth in the state economy, coupled with the use of federal matching dollars,
made Medicaid spending less burdensome.
Even so, Mississippi’s total Medicaid expenditures have grown more
quickly than the national average. Two areas of rapid growth have been DSH
payments and expenditures for blind and disabled recipients. Despite these
increases, average expenditures (including both state and federal funds) per
enrollee in Mississippi were still about 25 percent less than the national average in 1995. Average spending per blind or disabled enrollee was only half
the national average. Part of the reason for the low per capita expenditures
is that the state Medicaid program imposes tight limits on the number of hospital days, physician visits, and prescription drugs that may be used by beneficiaries. Medicaid expenditures for long-term care services are particularly low.
2
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
The newly enacted Balanced Budget Act of 1997 gradually reduces DSH
payment levels, which will limit Mississippi’s ability to use this mechanism of
earning extra federal funds in the future. The maximum federal DSH level will
be about $20 million less in 2002 than in 1998. This budgetary loss is more than
overshadowed, however, by additional federal funds available under the State
Children’s Health Insurance Program ($56 million in 1998). An additional
windfall for the state is from the tobacco lawsuit settlement (about $170 million
in the first year, eventually totaling about $3.6 billion). It is not yet clear how
the state will use the tobacco funds—to cut taxes, increase health care spending,
or help meet other budgetary needs.
In September 1996, the Health Care Financing Administration approved
statewide expansion of a primary care case management system of managed
care for nondisabled, nonelderly Medicaid beneficiaries, called HealthMACS.
HealthMACS requires that beneficiaries select (or be assigned) a primary care
provider who serves as a gatekeeper to most medical services. Under
HealthMACS, health care providers are still paid on a fee-for-service basis. In its
1997 session, the state legislature approved statewide implementation of the
program. In this same session, after much debate regarding Medicaid managed
care, the legislature rejected extending a Medicaid pilot project in which beneficiaries could voluntarily enroll in capitated health maintenance organizations
(HMOs). A major stumbling block for the HMO pilot project was the difficulty
in getting health care providers to join the HMOs. Despite the legislative setback, the state Medicaid agency has decided to proceed with expansion of
Medicaid under the authority of earlier legislation. The agency will develop
capitated projects in eight counties by the end of 1997, which is a modest
expansion designed to avoid confrontation with the legislature.
The obstacles facing the Medicaid HMO pilot project are not surprising, given
the low level of commercial HMO activity in the state. As of the end of 1995,
about 1 percent of the population was served by an HMO, compared with 23
percent nationally. Industry data suggest that HMO penetration has grown to
perhaps 2 percent now. The proportion of residents using preferred provider
organizations was unknown but was believed to be much larger. The relative
shortage of physicians and other health care providers has made it harder for
HMOs to assemble provider networks. Further, there has been little demand from
employers to create managed care plans. While state government officials and
health care association representatives typically believe that the state will eventually see a more pronounced presence of managed care, change has been slow.
Mississippi has relatively uncommon long-term care policies. There is a
certificate-of-need (CON) system that has limited the opening of new nursing
home beds and the creation of new home health agencies. As a sign of the saturation of capacity, nursing homes have a 99 percent occupancy rate, and the
average length of stay is well above the national average. Despite the CON laws,
the number of nursing home beds has increased somewhat. Mississippi’s
Medicaid program is disproportionately reliant on institutional care and uses
THE URBAN
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3
very little home and community-based care. While home and community-based
care services have grown rapidly in the state, they are dominated by Medicare
and are still small in scope compared to institutional services. Combining access
to nursing homes and home health services, elderly and disabled Medicaid
enrollees in Mississippi are about half as likely to obtain long-term care as people in other states; this indicates a possible problem in access to long-term care
services. In the 1997 session, the state legislature considered changing the CON
system but elected to wait until the next session to address the issue.
In 1997, the legislature enacted a welfare reform bill, paralleling the 1996
federal welfare reform law. Although a number of changes were made in the
cash welfare system, the bill had almost no explicit changes for Medicaid.
Advocates in the state worried that welfare recipients who lose cash assistance
may also lose Medicaid benefits, but it was too early to determine the effects of
the new rules. Like other states, Mississippi’s Aid to Families with Dependent
Children/Temporary Assistance for Needy Families caseloads were already
declining, partly because of economic improvements and partly because of
prior welfare reform efforts.
Mississippi has made a number of changes in insurance regulations in
recent years, particularly in the area of small-group insurance. For example, it
has limits on preexisting condition exclusions and provisions for portability
of insurance, so that few changes were needed to comply with the federal
Health Insurance Portability and Accountability Act of 1996. The state has
formed a high-risk insurance pool that helps insure 1,500 people with serious
health problems who would otherwise be uninsurable. The risk pool is funded
by assessments from insurance companies, as well as member premiums.
Because of the shortage of physicians and the large number of needy people
in Mississippi, safety net providers (i.e., public health departments, community health centers, public hospitals) assume greater importance in Mississippi
than in most states. The growth of, and struggle over, Medicaid managed care
may have repercussions for these providers. For example, until recently, the
public health departments provided prenatal care to slightly more than half the
pregnant women in the state; this has declined to just below half the women.
Health department officials expressed concern about the loss of revenue from the
decline in maternity patients. However, it appears that the reduction in
Medicaid revenue earned by the health departments has had only a modest
effect on their overall revenues. Community health centers have similar concerns, but the potential effects are greater since Medicaid provides more of their
total revenue. Public health officials also worry that emphasis on preventive
health measures, such as immunization rates, may deteriorate if private doctors
are less aggressive in promoting preventive care among Medicaid recipients.
One novel effort to expand health care access is the creation of a Medical
Mall in Jackson, the state capital. The University of Mississippi Medical Center
is building a large outpatient clinic in a renovated shopping mall in a low-
4
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
income part of town; the mall will also house other health care facilities in a
single multipurpose location.
Mississippians face a number of interesting and important choices in the
near future. Among the most immediate issues are how it will respond to the
State Children’s Health Insurance Program and how it should use the funds
from the tobacco lawsuit settlement. Other health policy issues include the
future of long-term care services and of Medicaid managed care. Looking further ahead, the state must decide whether it will embrace managed care on a
broader (private and public sector) basis, as has occurred elsewhere in the country. Last, Mississippi must also continue to address long-standing problems,
including high rates of premature mortality and the shortage of health care
providers.
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5
Overview of Mississippi:
Thumbnail Sketch of the State
Sociodemographic Portrait of Mississippi
M
ississippi is primarily a rural state. About two-thirds of the 2.6 million state residents live in nonmetropolitan areas (table 1). Threefifths of the residents are white, and about two-fifths are African
American. The Hispanic and immigrant populations are quite
small but continually growing as Cubans and Central Americans have been
brought in to work for the poultry industry.
Economic Status
Mississippi is, and has been for many years, one of the poorest states in the
nation. About one-quarter of the population (23 percent) was below the federal poverty level (FPL) in 1994. More than a third of the children (34 percent)
were below the FPL (table 1). These rates are about 60 percent higher than the
national averages. The unemployment rate is relatively high, and wages tend
to be low. A substantial share of employment is agricultural work. Mississippi’s
per capita income in 1995 was 28 percent below the national average. Because
national economic statistics do not adjust for the local cost of living, these statistics probably overstate the relative level of poverty in the state. Even so, by
most accounts, Mississippi is a very poor state.
On the positive side, Mississippi has had a vigorous economic boom for
several years. The state’s per capita income grew 31 percent between 1990 and
Table 1 State Characteristics
Sociodemographic
Population (1994–95)a (in thousands)
Percent under 18 (1994–95)a
Percent 65+ (1994–95)a
Percent Hispanic (1994–95)a
Percent Non-Hispanic Black (1994–95)a
Percent Non-Hispanic White (1994–95)a
Percent Non-Hispanic Other (1994–95)a
Percent Noncitizen Immigrant (1996) *
Percent Nonmetropolitan (1994–95)a
Population Growth (1990-95)b
Economic
Per Capita Income (1995)c
Percent Change in Per Capita Personal Income (1990–95)c, d
Percent Change in Personal Income (1990–95)c, e
Employment Rate (1996)f, g
Unemployment Rate (1996)f
Percent below Poverty (1994)h
Percent Children below Poverty (1994)h
Health
Percent Uninsured—Nonelderly (1994–95)a
Percent Medicaid—Nonelderly (1994–95)a
Percent Employer Sponsored—Nonelderly (1994–95)a
Percent Other Health Insurance—Nonelderly (1994–95)a, i
Smokers among Adult Population (1993)j
Low Birth-Weight Births (<2,500 g) (1994)k
Infant Mortality Rate (Deaths per 1,000 Live Births) (1995)l
Premature Death Rate (Years Lost per 1,000) (1993)m, n
Violent Crimes per 100,000 (1995)o
AIDS Cases Reported per 100,000 (1995)j
Political
Governor’s Affiliation (1996)p
Party Control of Senate (Upper) (1996)p
Party Control of House (Lower) (1996)p
Mississippi
United States
2,600
27.4%
12.3%
0.7%
38.7%
60.0%
0.6%
0.9%
66.3%
4.7%
260,202
26.8%
12.1%
10.7%
12.5%
72.6%
4.2%
6.4%
21.8%
5.6%
$16,683
31.3%
37.4%
58.5%
6.1%
22.8%
34.4%
$23,208
21.2%
27.7%
63.2%
5.4%
14.3%
21.7%
20.1%
15.9%
56.9%
7.1%
24.1%
9.9%
10.6
74.3
502.8
16.4
15.5%
12.2%
66.1%
6.2%
22.5%
7.3%
7.6
54.4
684.6
27.8
R
34D-18R
83D-36R-2I
a. Two-year concatenated March Current Population Survey (CPS) files, 1995 and 1996. These files are edited by the Urban
Institute’s TRIM2 microsimulation model. Excludes those in families with active military members.
b. U.S. Bureau of the Census, Statistical Abstract of the United States: 1996 (116th edition). Washington, D.C., 1996. 1995 population as of July 1. 1990 population as of April 1.
c. State Personal Income, 1969–1995. CD-ROM. Washington, D.C.: Regional Economic Measurement Division (BE-55), Bureau of
Economic Analysis, Economics and Statistics Administration, U.S. Department of Commerce, October 1996.
d. Computed using mid-year population estimates of the Bureau of the Census.
e. Personal contributions for social insurance are not included in personal income.
f. U.S. Department of Labor. State and Regional Unemployment, 1996 Annual Averages. USDL 97-88. Washington, D.C., March
18, 1997.
g. Employment rate is calculated using the civilian noninstitutional population 16 years of age and over.
h. CPS three-year average (March 1994–March 1996 where 1994 is the center year), edited using the Urban Institute’s TRIM2
microsimulation model.
i. “Other” includes persons covered under CHAMPUS, VA, Medicare, military health programs, and privately purchased
coverage.
j. Normandy Brangen, Danielle Holahan, Amanda H. McCloskey, and Evelyn Yee. Reforming the Health Care System: State
Profiles 1996. Washington, D.C.: American Association of Retired Persons, 1996.
k. S.J. Ventura, J.A. Martin, T.J. Mathews, and S.C. Clarke. “Advance Report of Final Natality Statistics, 1994.” Monthly Vital
Statistics Report, vol. 44, no. 11, supp. Hyattsville, MD: National Center for Health Statistics, 1996.
l. National Center for Health Statistics. “Births, Marriages, Divorces, and Deaths for 1995.” Monthly Vital Statistics Report, vol.
44, no. 12. Hyattsville, MD: Public Health Service, 1996.
m. ReliaStar Financial Corporation. The ReliaStar State Health Rankings: An Analysis of the Relative Healthiness of the
Populations in All 50 States, 1996, Minneapolis, MN, 1996.
n. Race-adjusted data, National Center for Health Statistics, 1993 data.
o. U.S. Department of Justice, FBI. Crime in the United States, 1995. October 13, 1996.
p. National Conference of State Legislatures. 1997 Partisan Composition, May 7 Update. D indicates Democrat, R indicates
Republican, and I indicates Independent.
8
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
1995, well above the national growth rate of 21 percent. One factor in the economic development has been the construction of casinos, which have helped
revitalize some areas of the state. The state has also been able to attract other
businesses, helped by the low cost of living and other business conditions.
The state treasury has fared very well. In addition to revenue growth as a
result of general economic development, legalized gambling has brought in
additional tax revenues. Reflecting its strong fiscal position, the state had a
rainy day fund of about $400 million as of early 1997.
Because of the high level of poverty, Mississippi faces challenges more
severe than those of other states when it tries to craft policies to help lowincome families. However, the current rapid economic growth signals that conditions are improving, and the state has fiscal resources that could be used to
further improve the situation.
Health Insurance and Health Conditions
About one-fifth (20 percent) of nonelderly Mississippians were uninsured in
1994–95, compared with 16 percent nationwide. This is a high rate of uninsurance, but there are other, more prosperous states, such as Texas, with higher
uninsurance levels. The main factor that explains the rate of uninsurance is that
the level of employer-sponsored insurance (57 percent) is low compared to
other states. This in turn is caused by the higher-than-average level of unemployment and the fact that much of the employment is agricultural work, which
usually has low insurance coverage. Although Mississippi’s Medicaid program
has stringent eligibility standards compared to other states, because of the high
poverty rate a large fraction (16 percent) of Mississippians participate in
Medicaid.
By a number of public health measures, Mississippians have relatively poor
health status compared to residents of other states. When health status is measured by premature mortality (years of life lost before age 65, race-adjusted),
Mississippi has been ranked as the 50th state.1 Key factors that contribute to the
state’s health burdens include high rates of heart disease and motor vehicle
deaths, and relatively high rates of smoking, cancer, and infant mortality (see
table 1). Bordering states, such as Louisiana, have similar problems, so
Mississippi is not unique. On the other hand, Mississippi has among the highest child immunization rates of any state.
Given the state’s poverty and rural nature, it is not surprising that
Mississippi has a relative shortage of health care providers, leading to problems
in access to primary health care. Among all states in 1995, it was the state with
the highest proportion of residents living in areas with health professional
shortages.2 However, it has a relatively extensive network of publicly funded
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9
safety net providers—such as public hospitals, public health departments, and
community health centers—that provide free or reduced-price health services,
including uncompensated care. These safety net providers are far more important in Mississippi than in most of the nation. For example:
• About half the pregnant women in Mississippi receive their prenatal care
through public health clinics.
• About half the hospitals in the state are state or county controlled (mostly
county), the highest level of any of the 13 states in the Assessing the New
Federalism study.
• The proportion of Mississippians seen at community health centers (8.6 percent) is about three times higher than the national average (2.7 percent).
Political Environment
Mississippi has a long conservative tradition. Currently, political power is
shared by Republicans and Democrats. Governor Kirk Fordice, now in his second term of office, is a Republican, while Lieutenant Governor Ronnie Musgrove and a majority of both legislative chambers are Democrats. The state’s two
best-known politicians, U.S. Senators Trent Lott and Thad Cochran, are both
Republicans, as are three of the five United States Representatives.
Like many other Southern states, Mississippi limits the powers of the governor and vests relatively more power in the legislature and independent agencies. For example, the governor appoints some (but not all) agency heads,
including the directors of the Division of Medicaid and the Department of
Human Services. Other agencies, such as the health and mental health departments, are independent and have directors selected by appointed boards.
Finally, the insurance commission and attorney general’s office are run by
elected officials. Mississippi’s attorney general has garnered national visibility
because he led the coalition of state attorneys general in the landmark 1997
lawsuit settlement with the tobacco companies, based in part on the costs of
smoking-related illness treated under Medicaid.
In the state legislature, although Democrats have a majority in both the
Senate and House of Representatives, there are efforts to maintain a bipartisan
environment. For example, the chairman of the Senate Public Health and
Welfare Committee is a Republican. The legislature controls many of the state
policies and the purse strings, but the legislative session is relatively brief and
there are few legislative staff. Thus, the executive agencies shape much of the
agenda for the legislature.
Roadmap to the Rest of the Report
The rest of this report lays out the major health-care-related issues, initiatives, and challenges that Mississippi was facing in 1997. The report includes
10
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
•
•
•
•
•
•
•
•
the state’s recent health policy agenda,
an overview of Medicaid policies and budget issues,
the organization of state health programs,
how Medicaid and insurance policies affect health insurance for the lowincome population,
aspects of health care delivery and financing, including Medicaid and
commercial managed care,
the role of the state health department and other safety net providers in delivering health care in the state and in the Jackson area,
long-term care policies, and
future issues facing the state.
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11
Setting the Policy and
Budget Context
Recent Legislative Issues
W
e visited Mississippi soon after the end of its regular 1997 legislative session. During the session, the legislature passed two bills
implementing federal welfare reform: a welfare reform bill and a
child support bill. Although some expected implementation to
be a contentious issue, these bills passed without great difficulty; the thorniest
issue concerned privatization of some state functions. The state’s welfare reform
bill followed the outline of the federal legislation and included a family cap and
maximum time limits for Temporary Assistance for Needy Families (TANF)
eligibility. The bill built on reforms that began in a few counties under welfare
reform waivers; it was silent on the uncoupling of Medicaid and TANF eligibility, leaving this issue to be handled administratively. The state took no special action regarding immigrants, thereby accepting federal defaults. There are
few immigrants in the state, so this was not a pressing issue.
The legislature passed an appropriations bill authorizing the state’s Medicaid
primary care case management (PCCM) program, called HealthMACS, to be
implemented on a mandatory basis statewide over the next few years. (Several
months earlier the federal government approved the state’s plan for statewide
expansion of HealthMACS.) Previously a pilot project in parts of the state,
HealthMACS requires that TANF and poverty-related enrollees select or be
assigned a primary care provider (PCP) who serves as a gatekeeper. The PCP
gets a $3 monthly case management fee, and all care is reimbursed on a fee-forservice basis.
After contentious battles, the legislature rejected authorizing capitated managed care in Medicaid. The Senate supported continuing health maintenance
organization (HMO) pilot projects in several counties around the state and creating a mandatory capitated care project in the populous counties around
Jackson, the state capital. The House rejected these proposals because of concerns about the feasibility or appropriateness of capitated managed care in
Mississippi. Despite this legislative setback, the Division of Medicaid later
announced that it intended to continue and perhaps expand the voluntary
HMO program, using the authority of earlier legislation. The program will be
extended to eight counties by the end of 1997, a moderate expansion designed
not to provoke opposition from the legislature. This decision will help keep
the existing Medicaid HMOs operational; they would probably have gone out of
business otherwise.
Another Medicaid-related issue debated during the 1997 session was the
certificate-of-need program. For many years, the state has had a moratorium
on the numbers of nursing home beds and home health agencies. Members of
the House supported increasing the numbers during the legislative session,
but the Senate delayed action until next year.
Finally, the legislature passed a mental health reform bill that modified procedures for providing mental health services, including both community mental health and inpatient care. In recent years, the state has made a concerted
effort to increase funding to upgrade mental health services and improve the
state psychiatric hospitals.
14
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
State Health Programs
S
everal state agencies affect Mississippi health policy. Mississippi’s
Division of Medicaid (DOM) is part of the Office of the Governor. DOM
works closely with the Department of Human Services (DHS); DHS welfare staff enroll people for Medicaid, and the agency is also responsible
for certain aging and long-term care programs. DHS is relatively centralized at
the state level and provides direct administration of county offices; county-level
human services staff are state employees. The Department of Health (DOH) has
jurisdiction over public health programs, including county health services programs, health planning, and environmental and epidemiological programs. Like
DHS, DOH directly administers all county programs and staff. The Department
of Mental Health is quite large and employs staff in both institutional and noninstitutional settings.
In the sections that follow, we present information about health spending
from various sources, including state and federal data. The expenditure data
vary somewhat from source to source but are generally consistent in showing
overall patterns and trends.
Overview of State Health Expenditures
In terms of total expenditures, Medicaid is the most expensive and dominant state health program. However, Medicaid is only partly funded by state
general funds—the component that must be raised through state taxes or related
state fiscal activities. The rest of the funding for Medicaid comes from federal
matching funds and from revenue contributed by certain health care providers,
which may be counted as state matching funds. Table 2 summarizes state-
Table 2 State-Funded Health Activities, State Fiscal Year 1995 (in Millions)a
Agency/Function
State General
Funds
Federal
Funds
Other
Funds
Total
$156.7
93.2
137.9
32.0
15.7
10.5
NA
$1,152.4
NA
19.4
78.0
55.4
37.7
NA
$168.2
200.2
127.9
54.7
6.1
28.4
NA
$1,477.4
293.4
285.1
164.7
77.3
76.7
98.2
Division of Medicaid
University Medical Center
Department of Mental Health
Department of Health
Rehabilitation and Disability Services
Environmental Protection
Professional Licensure and Education
Source: Mississippi Legislative Budget Board Report, 1996
a. These expenditures are not summed because there is some degree of double counting. For example, Medicaid expenditures
for mental health show up both in Medicaid and Mental Health.
funded health activities, including Medicaid, public health, mental health,
and others. Medicaid is the dominant total outlay, but federal matching funds
are the main source of revenue. The Department of Mental Health and
University Medical Center also receive substantial state general funds but have
less federal funding.
Medicaid Budget Trends
Another way to view health expenditures is to compare spending with other
state budget functions. Table 3 displays data about key functional areas from
1992 to 1995, as reported by the National Association of State Budget Officers.
Although Medicaid (including state, federal, and provider-related funds) is a
very large component of the total state budget (22 percent in 1995), it is a small
share (5 percent) of state general-fund spending. In fact, the percentage of state
general funds for Medicaid declined from 1992 to 1995 while the level
increased substantially for corrections.
There are two keys to understanding Mississippi’s Medicaid expenditures.
First, because of the low per capita income level, Mississippi has the highest
federal Medicaid matching rate in the country—77.2 percent in 1997.3 Each
state dollar earns more than three federal dollars. However, the match rate has
declined in recent years because of economic improvement in the state. Second,
the state learned to expand the use of intergovernmental transfers (used in tandem with disproportionate share hospital [DSH] payments) and a nursing home
bed tax to leverage additional federal funds during the early 1990s. Essentially,
by using funds contributed by hospitals to count as state dollars and providing
larger-than-usual DSH payments back to the hospitals, Mississippi and other
states can draw down additional federal dollars with minimal use of state general funds.
16
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
Table 3 Mississippi Spending by Category, 1992 and 1995 (in Millions)
State General-Fund Expendituresa
Total Expendituresb
1992
1995
Annual
Growth
1992
1995
Annual
Growth
$1,951
$2,750
12.1%
$5,117
$6,477
8.2%
Medicaidc, d
% of Total
145
(7.4)
144
(5.2)
(0.2)
—
1,055
(20.6)
1,443
(22.3)
11.0
—
Corrections
% of Total
80
(4.1)
192
(7.0)
33.9
—
84
(1.6)
199
(3.1)
33.3
—
K–12 Education
% of Total
915
(46.9)
1,287
(46.8)
12.0
—
1,235
(24.1)
1,613
(24.9)
9.3
—
AFDC
% of Total
16
(0.8)
17
(0.6)
2.0
—
83
(1.6)
79
(1.2)
(1.6)
—
Higher Education
% of Total
307
(15.7)
458
(16.7)
14.3
—
718
(14.0)
1,084
(16.7)
14.7
—
Miscellaneouse
% of Total
488
(25.0)
652
(23.7)
10.1
—
1,942
(38.0)
2,059
(31.8)
2.0
—
Program
Total
Source: National Association of State Budget Officers, 1992 State Expenditure Report (April 1993) and 1996 State Expenditure
Report (April 1997).
a. State spending refers to general-fund expenditures plus other state fund spending for K–12 education.
b. Total spending for each category includes the general fund, other state funds, and federal aid.
c. States are requested by the National Association of State Budget Officers (NASBO) to exclude provider taxes, donations, fees, and
assessments from state spending. NASBO asks states to report these separately as “other state funds.” In some cases, however, a portion of these taxes, fees, etc., are included in state spending because states cannot separate them. Mississippi reported other state funds
of $75 million in 1992 and $168 million in 1995.
d. Total Medicaid spending will differ from data reported on the HCFA 64 for three reasons: first, NASBO reports on the state fiscal year and the HCFA 64 on the federal fiscal year; second, states often report some expenditures, (e.g., mental health or mental retardation), as “other health” rather than Medicaid; third, local contributions to Medicaid are not included but would be part of Medicaid
spending on the HCFA 64.
e. This category includes all remaining state expenditures (e.g., environmental projects, transportation, housing, and other cashassistance programs) not captured in the five listed categories.
Table 4 presents data about state Medicaid funding from State Fiscal Year
(SFY) 1991 to 1998. Between 1991 and 1997, total Medicaid funding rose an
average 14.5 percent annually, reaching $1.8 billion by 1997. However, state
general funds used for Medicaid grew an average 5.0 percent per year, reaching $209 million in 1997. The balance of growth was fueled by provider funding (mostly intergovernmental transfers used for DSH payments, as well as a
nursing home bed tax) and federal matching funds ($195 million and $1.4
billion in 1997, respectively). Given that the federal matching rate for
Mississippi actually declined slightly, the importance of DSH cannot be overstated. The DSH program in Mississippi is structured so that most of the
newly earned federal dollars flow back to the state, more so than to the hospitals. The main increase in state general funds for Medicaid occurred
between 1995 and 1996, in part because changing rules for DSH limited the
state’s use of provider revenues.
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Table 4 Trends in Sources of Revenue for Mississippi Medicaid Program, Based on
Appropriations, 1991–98
State Fiscal Year
Regular Appropriation
State General Funds
Provider-related Fundsa
Federal Matching
Supplemental Appropriation
State General Funds
Provider-related Fundsa
Federal Matching
Total
State Fiscal Year
Regular Appropriation
State General Funds
Provider-related Fundsa
Federal Matching
Supplemental Appropriation
State General Funds
Provider-related Fundsa
Federal Matching
Total
1991
1992
1993
1994
$142,411,442
0
564,999,863
$160,000,000
65,000,000
886,832,183
$165,000,000
119,750,000
1,060,582,708
$171,762,681
152,260,343
1,205,589,344
12,800,000
5,000,000
71,495,691
0
30,000,000
120,000,000
796,706,996
1,261,832,183
1,345,332,708
1,529,612,368
1995b
1996
1997
$152,270,706
130,000,000
1,276,131,404
$206,016,268
163,000,000
1,302,220,094
$208,960,436
194,639,914
1,399,612,637
$212,572,441
218,864,407
1,425,064,030
1,644,236,362
1,803,212,987
1,856,500,878
1998
(request)c
4,000,000
60,000,000
58,000,000
1,680,402,110
Source: Mississippi Legislative Budget Office, March 25, 1997.
a. Provider-related Funds include nursing home bed tax, provider donations (discontinued), and intergovernmental transfers (main
revenue source after 1992).
b. $36,666,700 General Funds transfers.
c. $57,412,260 in General Funds from other agencies used as Medicaid match in 1998, so total General Funds in Medicaid =
$269,984,701.
Comparisons to National Expenditures
Mississippi’s rate of Medicaid expenditure growth has been higher than
the national average. For example, the average annual growth rate was 11.8 percent from 1992 to 1995, compared to the national rate of 9.9 percent (table 5).
The two factors that particularly shaped the state’s high growth rate were the
large increases for DSH spending, as discussed above, and rapid growth in
expenditures to care for the disabled. Increases in spending were comparable to
the national average for children and the elderly and were lower than average
for adults.
Although Mississippi’s spending has grown quickly, the level of spending
per enrollee is still quite low, compared to national averages. As seen in table
6, the average spending per enrollee was $2,377 in 1995 in Mississippi, about
26 percent less than the national average. Although there has been rapid growth
in spending for the blind and disabled, in 1995 the average Medicaid expenditure per blind or disabled enrollee ($4,150) was only about one-half the national
average ($8,022).
18
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
Table 5 Medicaid Expenditures by Eligibility Group and Type of Service, Mississippi and United States
(Expenditures in Millions)
Mississippi
United States
Average Annual
Growth
Expenditures
Average Annual
Growth
Expenditures
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
1990
1992
1995
1990–92
1992–95
1990
1992
1995
Total
$645.8
$1,114.1
$1,558.3
31.3%
11.8%
$73,662.2
$118,926.0
$157,872.5
27.1%
9.9%
Benefits
Benefits by Service
Acute Care
Long-Term Care
Benefits by Group
Elderly
Acute Care
Long-Term Care
Blind and Disabled
Acute Care
Long-Term Care
Adults
Children
$621.1
422.5
198.6
$621.1
$199.3
78.0
121.3
$217.9
141.7
76.2
$97.9
$106.0
$930.6
610.4
320.2
$930.6
$311.1
102.1
209.0
$322.6
216.9
105.7
$118.6
$178.4
$1,341.4
938.1
403.3
$1,341.4
$400.1
160.7
239.4
$556.4
406.5
149.9
$138.8
$246.1
22.4%
20.2%
27.0%
22.4%
24.9%
14.4%
31.2%
21.7%
23.7%
17.8%
10.0%
29.7%
13.0%
15.4%
8.0%
13.0%
8.8%
16.3%
4.6%
19.9%
23.3%
12.3%
5.4%
11.3%
$69,168.7
36,904.5
32,264.2
$69,168.7
$23,334.3
4,925.4
18,408.9
$25,771.6
12,929.2
12,842.4
$8,765.0
$11,297.8
$97,602.4
55,059.9
42,542.5
$97,602.4
$31,757.9
6,911.5
24,846.4
$35,684.6
19,483.6
16,201.0
$12,710.1
$17,449.8
$133,434.6
79,438.5
53,996.1
$133,434.6
$40,087.4
9,673.7
30,413.7
$51,379.4
29,760.7
21,618.7
$16,556.9
$25,410.9
18.8%
22.1%
14.8%
18.8%
16.7%
18.5%
16.2%
17.7%
22.8%
12.3%
20.4%
24.3%
11.0%
13.0%
8.3%
11.0%
8.1%
11.9%
7.0%
12.9%
15.2%
10.1%
9.2%
13.3%
$2.5
$153.3
$182.6
683.2%
6.0%
$1,340.9
$17,525.6
$18,988.4
261.5%
2.7%
$22.2
$30.2
$34.3
16.5%
4.4%
$3,152.6
$3,797.9
$5,449.4
9.8%
12.8%
DSH
Administration
Source: The Urban Institute, 1997. Based on HCFA 2082 and HCFA 64 data.
1990–92
1992–95
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Table 6 Medicaid Expenditures per Enrollee by Eligibility Group, Mississippi and United States
Mississippi
Spending per
Enrollee
United States
Average Annual
Growth
1990–92
Spending per
Enrollee
Average Annual
Growth
1990
1992
1995
1992–95
1990
1992
1995
1990–92
1992–95
Total
$1,252
$1,732
$2,377
17.6%
11.1%
$2,397
$2,729
$3,202
6.7%
5.5%
By Group
Elderly
Cash
Noncash
$3,030
1,807
5,861
$4,630
1,944
9,275
$5,872
2,777
9,439
23.6%
3.7%
25.8%
8.2%
12.6%
0.6%
$6,839
3,329
10,377
$8,422
4,017
12,192
$9,738
4,818
13,521
11.0%
9.8%
8.4%
5.0%
6.2%
3.5%
Blind and Disabled
Cash
Noncash
$2,523
2,246
6,114
$3,164
2,794
7,577
$4,150
3,790
7,376
12.0%
11.5%
11.3%
9.5%
10.7%
–0.9%
$6,378
4,969
12,047
$7,320
5,927
12,574
$8,022
6,686
12,660
7.1%
9.2%
2.2%
3.1%
4.1%
0.2%
Adults
Children
$1,108
$415
$1,384
$631
$1,758
$869
11.8%
23.3%
8.3%
11.3%
$1,301
$770
$1,518
$931
$1,728
$1,178
8.0%
9.9%
4.4%
8.2%
Source: The Urban Institute, 1997. Based on HCFA 2082 and HCFA 64 data.
Department of Health
Funding for the Department of Health has grown in recent years; the section
on public health discusses its budget in more detail. Overall departmental revenues have grown in recent years, but Medicaid revenue, which was growing
rapidly in the early 1990s, now appears to be leveling off or dropping. As in
most states, DOH sought to maximize Medicaid matching revenues during the
1980s and 1990s. Now it expects that Medicaid revenue may decline because
managed care will probably reduce the use of public health agencies.
Budget Prospects
In light of Mississippi’s extensive reliance on federal matching funds and
provider-related revenues, and given the state’s robust economic condition, cutting Medicaid has not been a serious policy issue in the past couple of years.
Medicaid has been considered a “built-in” in the budget. A few years earlier,
the legislature examined ways to trim Medicaid spending and did not find any
easy way to do so.
How will Medicaid and related health spending fare in the future? As indicated below, some factors suggest that there could be increased fiscal pressure
in the future; these factors, however, are overshadowed by two new sources of
revenue that could be used for health programs. Overall, the fiscal prospects for
health programs look bright in Mississippi.
Three factors signal increased fiscal pressure on the state budget to contain
Medicaid spending. First, state revenues are projected to grow more slowly in
the future. One important reason is that gambling revenue is leveling off.
Second, in 1997 a major bill to improve equity of school financing was passed;
it is expected to consume most of the projected surplus revenue. Third, the
reduction in federal funding for DSH payments under the federal 1997
Balanced Budget Act will necessitate changes in Medicaid budgeting. By 2002,
the maximum level of federal DSH funds available to Mississippi will be about
$20 million less than in 1998.
Two new revenue sources for the state offer substantial additional resources
for health programs: (1) funds from the tobacco lawsuit settlement and (2) new
federal funds from the State Children’s Health Insurance Program, created in
the Balanced Budget Act. The settlement of the tobacco lawsuit is projected to
bring $3.6 billion to the state over 25 years, beginning with an initial payment
of $170 million. In August 1997 we were told that the use of the funds had not
yet been determined. At least three options were under discussion: tax cuts,
general state expenditures (e.g., education and roads), and health care expansion. In addition, one state legislator suggested creating a trust fund to hold
the money. Many issues surrounding the settlement remain unresolved and
are pending federal decisions and the national settlement. Since the basis for
the suit was smoking-related Medicaid expenditures by states, an unsettled
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issue is whether the federal government has a claim to any of these funds.4
Since more than three-quarters of Mississippi’s Medicaid program is federally
funded, the state’s windfall could be greatly reduced by any federal claim,
although even a quarter of the settlement would still be quite large.
Mississippi will receive a relatively large allocation of funds from the new
State Children’s Health Insurance Program, because the state has a relatively
high rate of uninsurance among children. Mississippi was allocated $56 million
in extra federal funds for 1998. To earn these funds, however, the state needs
to provide about $10.7 million in state matching funds. (The tobacco settlement
is a plausible source of state matching funds.) As of September 1997, the state
had not announced how it would structure the program, whether through
Medicaid expansion or through the creation of a new state program. Although
the funds were available October 1, 1997, the state will probably delay implementation. Combining the possible revenues from the tobacco settlement and
child health insurance, Mississippi could have large new resources for improving health programs in the state.
Potential State Responses to Additional Flexibility and
Reduced Funding
It is difficult to assess the implications for Mississippi of the increased flexibility granted states under the Balanced Budget Act of 1997. The new law gives
states more latitude in designing managed care programs, but the state has
been divided in its opinions about Medicaid managed care.
As of September 1997, policies for expanding health insurance for children
were unclear. It is worth noting that Mississippi has had broader Medicaid coverage than some of its neighbors. However, we were informed that the state
policymakers were not overly concerned about being viewed as a Medicaid or
welfare “magnet.” Although expansion of health insurance coverage has not
been a priority of the governor or the legislature, neither has expansion been
strongly opposed by policymakers. The availability of new federal funds, coupled with the tobacco funds, affords the state opportunities it has not had in
the past.
22
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
Providing Third-Party Coverage
for the Low-Income Population
M
ississippi has a basic system of health care coverage. The only publicly funded insurance program for low-income people is Medicaid. Although Mississippi’s Medicaid eligibility criteria are relatively strict by national standards, they are more generous than
some other states in the region. Because of the high level of poverty in
Mississippi, almost one-sixth of state residents participate in Medicaid. While
many government officials and state legislators acknowledge that uninsurance
levels are high (20 percent), there has been little political pressure to expand
health insurance coverage in the state. In the 1997 legislative session, many
Medicaid issues were debated, but expanded health care coverage was not on
the table.
As noted before, a key factor explaining the high level of uninsurance in
Mississippi is that the level of employer-sponsored insurance is relatively low
(57 percent in Mississippi versus a national average of 66 percent). This is
largely the result of broader economic factors, including unemployment and the
high number of jobs in agriculture and other job sectors that typically lack
health coverage. Even so, regulation of private health insurance is an important element of health policy for the low-income populations. There are about
as many people in Mississippi with incomes under 200 percent of the FPL who
have private insurance (employer-sponsored or private nongroup) as who have
Medicaid. The state has already implemented a number of small-group market
reforms to improve access to private health insurance. Mississippi also developed a high-risk insurance pool that covers more than 1,500 medically high-risk
persons who would not otherwise have coverage or be able to afford coverage.
Medicaid Eligibility
When compared to the nation, Mississippi’s Medicaid eligibility criteria are
narrower in most areas, but they are similar to, and sometimes more generous
than, those of many other Southern states. In 1996, the maximum income for eligibility for Aid to Families with Dependent Children (AFDC)—and coupled
Medicaid benefits—was 34 percent of the FPL, which was lower than the
national average (39 percent). However, Mississippi’s eligibility standards are
more generous than those of the neighboring states of Alabama, Arkansas, and
Louisiana; for example, Alabama’s AFDC income limit was 16 percent of the FPL
in 1994. Mississippi implemented the federal Medicaid expansions for pregnant
women and children and covers pregnant women and infants up to 185 percent of the FPL, which is higher than the federal requirement of 133 percent.
Mississippi does not have a medically needy program and instead uses the
somewhat more restrictive standard of 300 percent of the Supplemental
Security Income (SSI) criteria for institutionalized persons. It is interesting to
note that the state also uses the option of providing full Medicaid coverage
(not just Qualified Medicare Beneficiary provisions) to elderly and disabled
people under 95 percent of the FPL. Only a minority of states use this provision.
This eligibility criterion means that more aged and disabled people can qualify for the full range of Medicaid benefits, including prescription drugs and
long-term care.
While Mississippi’s eligibility criteria are stricter than the national average
for adults and children, they are broader than the national average for the aged
and disabled. There did not appear to be “competition” between generations,
however. Broad-based political support was present for “expansion” women
and children as well as the aged and disabled, although there was less support
for welfare recipients.
The legislature enacted a welfare reform bill in 1997, but it appeared to
make minimal changes in Medicaid; Medicaid, in fact, was not viewed as a
major issue during the debate. Yet some advocates feared that the new welfare reform law might reduce Medicaid coverage. They worried that people terminated from welfare because of time limits or work sanctions would lose
Medicaid, even though they may still need health insurance coverage.
Although there was some anecdotal evidence of these problems, it was still too
soon after the welfare reform bill was enacted to know its impact. The bill did
not directly address the uncoupling of Medicaid and TANF eligibility, nor
did it address immigrants. Thus, the state will take the federal default options
and implement them on an administrative basis. The state legislature authorized an extension of transitional Medicaid benefits to 24 months for those
leaving welfare for work; however, a waiver has not been submitted to the
federal government.
Mississippi, like many states, has experienced a reduction in the number
of AFDC-related cases in Medicaid, which parallels reduced welfare caseloads.
24
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
Between 1992 and 1995, the number of adults on Medicaid fell 3 percent per
year in Mississippi, and the number of children remained steady (see table 7).
These trends capture both a decline in the AFDC caseload resulting from an
improved state economy and changes in welfare rules, and increases in the
Medicaid participation of adults and children who do not receive cash assistance. Participation among elderly cash-assistance (e.g., SSI) recipients also
fell by 5 percent per year. There were rapid increases, however, in the participation of aged, blind, and disabled people who do not get cash assistance; for
example, the number of noncash blind and disabled enrollees grew 19 percent
per year from 1992 to 1995. One reason for the rapid growth in enrollment of
noncash elderly and disabled people in Medicaid may be the state’s adoption of
the 95 percent of the FPL eligibility criterion for this group.
Breadth of Medicaid Benefits
Mississippi views its Medicaid program not as a blanket insurance program but as a medical assistance program with clearly defined limits of coverage. For example, Medicaid covers up to 30 days of hospital inpatient care per
year (with certain medically necessary exceptions), 12 physician office visits
per year (up to 36 visits in nursing facilities), 6 outpatient hospital visits per
year, and 5 prescriptions per month. Thus, if they have high health care needs,
even Medicaid recipients may be without coverage for some conditions. The
limitations on services in Medicaid can be strictly applied only to adults, as
Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) requires
expanded benefits for children.
Insurance Reforms
A variety of individual and small-group insurance regulation reforms were
enacted in Mississippi in the early part of the decade. Even before the enactment of the federal Health Insurance Portability and Accountability Act of
1996, the state had made most of the required changes. Little change in insurance regulation has been warranted recently, because there have been few major
shifts in the health care marketplace.
Like other states, Mississippi does not have many laws related to individual
insurance reforms. No laws exist for reforms such as rate bands, community rating, guaranteed issue, guaranteed renewability, portability, or reinsurance.5
However, Mississippi recently passed legislation imposing limits on exclusion
clauses for preexisting conditions.6 There were no plans to implement any additional individual insurance market legislation.
In contrast to the individual insurance market, where legislation has been
minimal, Mississippi’s small-group market has experienced more regulatory
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Table 7 Medicaid Enrollment by Eligibility Group, Mississippi and United States (Enrollment in Thousands)
Mississippi
Average Annual
Growth
Enrollment
Total
By Group
Elderly
Cash
Noncash
Blind and Disabled
Cash
Noncash
Adults
Children
United States
1990
1992
1995
1990–92
496.0
537.5
564.3
4.1%
65.8
45.9
19.8
67.2
42.6
24.6
68.1
36.5
31.7
86.4
80.2
6.2
102.0
94.1
7.9
1992–95
Average Annual
Growth
Enrollment
1990
1992
1995
1990–92
1992–95
1.6%
28,856.7
35,765.1
41,672.0
11.3%
5.2%
1.1%
–3.7%
11.4%
0.5%
–5.0%
8.8%
3,412.2
1,713.1
1,699.1
3,771.0
1,739.2
2,031.8
4,116.6
1,789.2
2,327.3
5.1%
0.8%
9.4%
3.0%
1.0%
4.6%
134.1
120.6
13.5
8.7%
8.3%
12.9%
9.6%
8.6%
19.4%
4,040.9
3,236.8
804.1
4,875.1
3,853.4
1,021.7
6,405.2
4,973.5
1,431.7
9.8%
9.1%
12.7%
9.5%
8.9%
11.9%
88.3
85.7
78.9
–1.5%
–2.7%
6,738.7
8,373.3
9,584.2
11.5%
4.6%
255.5
282.7
283.2
5.2%
0.1%
14,664.9
18,745.7
21,566.0
13.1%
4.8%
Source: The Urban Institute, 1997. Based on HCFA 2082 data.
activity. The most recent legislation enacted was related to the size of the group.
Mississippi historically defined the small-group market as a group size of
between 2 and 35 people; it recently changed the size to between 1 and 50 to
comply with the Health Insurance Portability and Accountability Act.7
In the small-group market, Mississippi provides for a 12-month limitation
on exclusion clauses for preexisting conditions and a 6-month look-back
period.8 Legislation also requires that insurance coverage be portable when people change employment but requires that there be no gap in coverage of more
than 30 days before the effective date of the new coverage.9 Insurers must renew
coverage (e.g., guaranteed renewability) with limited exceptions (e.g., premium
nonpayment).10 The state has no guaranteed issue regulation, suggesting more
emphasis on small groups’ keeping insurance rather than ensuring access to
new policies.11 The state has used standards from the National Association of
Insurance Commissioners to limit the variation in what insurers can charge for
small-group policies. After accounting for differences based on experience,
health status, or duration of coverage, the state’s limits permit no more than a
two-to-one range in premiums charged for policies.12
The state enacted medical savings account legislation in 1994 and amended
it in 1996. Medical savings account contributions are tax-exempt for resident
individuals and state employers; as of December 1996, the annual contribution limits were not yet determined.13 The market response to these accounts
has been very slow, and no party is actively selling them. The state does not
plan to aggressively pursue expansion or change in this area.
Through a federal waiver, Mississippi was able to use its high-risk pool
and small-group market reform, modified with a guaranteed-issue provision,
to comply with the Health Insurance Portability and Accountability Act.
High-Risk Pool
The state has a high-risk insurance pool, organized by the Mississippi
Comprehensive Health Insurance Risk Pool Association, that has been effective in providing coverage to some medically high-risk and uninsurable persons. Mississippi is the only mid-Southern state with a successful high-risk
insurance pool. Currently, approximately 1,500 people participate and receive
comprehensive outpatient, inpatient, emergent, nursing, and therapy service
coverage, subject to a lifetime maximum of $500,000. The program is funded by
individual premiums and by assessments on the association’s members, which
include such entities as insurance companies, HMOs, and nonprofit health care
service plans; no state general fund dollars are used. Individual premium rates
are somewhat higher than the levels charged for low-risk people—between 150
and 175 percent of standard rates, age- and sex-adjusted. However, premium
rates have remained constant for the past five years. Individuals pay a copayment, deductible, and premium. The amount paid by the association members
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is based on the number of their covered lives; they currently contribute 25 cents
per covered life per month.
People participate in the pool on a short-term basis, usually as a transitional
form of coverage until they are eligible for Medicare or find other private insurance coverage.
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Financing and Delivery System
W
hile many states have experienced major upheavals in the health
care market, such as the advent of managed care and hospital
mergers, Mississippi has witnessed less change so far. Its health
care marketplace is still characterized by traditional indemnitystyle insurance with minimal HMO, preferred provider organization (PPO), or
other managed care organization (MCO) penetration. Even though managed
care is somewhat new to the state, providers, consumers, and government officials have noticed gradual changes in how people receive care and how that
care is paid for. State officials acknowledged that the state must move in a managed care direction, but there has been noticeable resistance.
Managed Care
Commercial HMO penetration is very small. The Department of Insurance
estimated that about 1 percent of the total state population was enrolled in
HMOs at the end of 1995. Industry data suggest that HMO penetration has
grown to 2 percent now. HMO penetration is only 3.8 percent of the private
insurance market in the Biloxi–Gulfport–Pascagoula metropolitan market and
0.5 percent of the Jackson metropolitan market.14 There are 15 licensed HMOs
operating in the state. Many of these are in the start-up stages and thus have
not been very active. United HealthCare of Mississippi, Inc., is the largest HMO,
with an estimated 90 percent of the HMO market and 50,000 enrollees at the
end of 1996. Enrollment in other HMOs has been climbing somewhat, too. No
HMO has received National Committee for Quality Assurance (NCQA) accreditation yet; none have the necessary two years’ worth of Health Plan Employer
Data and Information Set (HEDIS) that NCQA requires for accreditation. HMO
enrollee retention rates are in the upper 90 percent range, suggesting reasonable
satisfaction among HMO members.
The exact number of PPOs formed or operating in the state has not been
determined; however, it is assumed to be between 50 and 100. It is also difficult
to determine PPO penetration rates. However, PPOs are believed to be much
more popular than HMOs. Without the ability to identify PPOs, calculating penetration rates is impossible. Some interviewees indicated that PPO penetration
is highest (25 to 50 percent) in Tupelo, one of the larger cities, in the northeast
part of the state. The state is currently in the process of formulating regulations for PPOs.
Managed care has been slow to gain support in Mississippi. Concerns about
potential financial losses, loss of autonomy, and an influx of non-Mississippibased insurers are some of the most commonly voiced reasons why providers
and insurers have resisted managed care. In addition, the lack of large employers reduces the pressure for “prudent purchasing.” The state government is
the largest employer, and it has made efforts to promote managed care; however,
employees feel that indemnity insurance rates are reasonable, so there is no
incentive to select a managed care option. In addition, the casinos, which are
among the state’s large employers, typically operate self-funded indemnitystyle plans. Many interviewees indicated that if the casinos choose to participate in managed care, that would prompt a significant shift toward managed
care in the state.
Mississippi has a shortage of physicians and other health care providers that
is particularly acute in rural areas. In 1993 and 1994, Mississippi ranked last
among all the states in the ratio of patient care physicians to population.15 In
Mississippi, there are 118 physicians per 100,000 people; nationally, there are
238 physicians per 100,000. Approximately 49 percent of the counties in the
state are designated as Health Professional Shortage Areas (HPSAs), and
another 23 percent have a portion of their county designated as a HPSA. The
shortage of providers, particularly in rural areas, creates general problems of
access to care. In addition, the shortage has made it more difficult to form physician networks, which are integral elements of managed care.
Historically, not many hospitals have participated in integrated delivery
systems. However, with some managed care on the horizon, more hospitals
have begun to have preliminary discussions about forming integrated systems.
Mergers and Conversions
Nonprofit hospital conversions and hospital mergers have not yet been serious issues. However, health care industry representatives are cognizant of these
activities occurring in other states, which raises their concern about the commitment of nonprofits to provide uncompensated care and the viability of the
safety net. One hospital conversion occurred in January 1996, but it did not create any market disturbances or provoke any vocal resistance. This hospital,
located in the Delta region in the northwestern part of the state—the poorest
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HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
area—converted to for-profit status. It served large Medicaid and indigent populations and needed money for capitalization.
Historically in the state, a for-profit entity was not permitted to purchase a
nonprofit entity. In 1993, when a for-profit purchase was inevitable, the law was
changed to allow the sale or lease of a nonprofit to a for-profit. The law also contained stipulations for administrative activities such as using independent
appraisers for valuing a facility.
Certificate of Need
In part because of a historical oversupply of hospital capacity, Mississippi
developed a certificate-of-need (CON) process in 1990, which applies to expansions or conversions of hospital and nursing home beds. In addition, to decelerate the growing demand for home health care, the state issued a CON to limit
the number of companies that can receive a license to deliver home health care.
CON-related issues have been extremely controversial over the past several
years, primarily the impact of CON on the adequacy of long-term care
providers. Issues of concern include whether there are enough nursing home
beds, whether monopolies have been created as a result of the moratorium on
new home health agencies, whether costs are being contained, and whether
financial and operational inequities exist among market players in the nursing
home and home health industries. One key state senator recommended creating
a bipartisan task force to review CON policy and laws, as well as the moratoria
in the home health and nursing home industries. These moratoria are discussed
in the section on long-term care for the elderly and persons with disabilities.
Medicaid Managed Care
Prior to 1990, the state legislature authorized a pilot program for Medicaid
managed care. In 1992, the authorization was amended into a broad mandate
and resulted in the creation of HealthMACS, a Medicaid primary care case management (PCCM) program. That same 1992 mandate was amended in 1995 to
include at least one module of capitated care in an urban area and one in a rural
area. In 1996, the legislature expanded the authorization to allow development
of capitation in 11 counties and imposed a one-year sunset provision on the
authority to contract or provide such services.16 In addition, during the 1997
legislative session, there was an unsuccessful attempt to implement a tri-county
managed care program.
HealthMACS
In 1992 the Mississippi legislature amended prior authorization of a pilot
managed care program into a broader mandate. Under this authority, the state
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designed a program, HealthMACS, as the state’s mandatory PCCM program for
AFDC and AFDC-related persons. Disabled persons and individuals receiving
long-term care are not required to participate. Under HealthMACS, a primary
care provider (PCP) receives a $3 monthly fee to manage each patient’s care.
The PCP must authorize most medical care for his or her patients, including
specialty and inpatient care and laboratory tests. The PCP bills Medicaid on a
fee-for-service basis for services covered under the state’s Medicaid plan.
The HealthMACS program was originally scheduled to operate in seven
counties. The program was first launched in Washington County (in the western
part of the state) in 1993; it was expanded to three southern counties—
Covington, Jefferson Davis, and Lawrence—in June 1994 and continued its
expansion in the following years. 17 As of April 1997, the HealthMACS program was operating in 20 counties and was expected to expand to six more in
May and four more in June. In September 1996, the Health Care Financing
Administration (HCFA) granted approval to expand the program statewide. In
the 1997 session, the legislature approved statewide implementation of
HealthMACS. At the end of February 1997, there were 50,032 recipients
enrolled in the HealthMACS program in the first 20 counties.
The statewide implementation of HealthMACS means that Medicaid managed care will become mandatory for the majority of Medicaid enrollees.
However, it is a relatively mild form of managed care, which uses a gatekeeper
but no capitation. Our impression was that this program was not politically
controversial and was not opposed by the physician community. However, as
will be discussed later, safety net providers such as local health departments
and community health centers do have concerns. While not as stringent as
capitated managed care, a PCCM program can lead to changes in recipients’ primary care provider and might lead to, for example, a person leaving a community health center in favor of a private physician, such as through the autoassignment process.
Capitated Managed Care Pilot Program
In December 1996, the state began a voluntary capitated managed care pilot
program that was eventually to cover 11 counties. Those who may volunteer
to join an HMO include AFDC/TANF recipients, people in related categories
(poverty-related women and children), and aged and disabled persons. People
in institutions, those who have presumptive eligibility, and those who are in
HealthMACS may not join. However, HealthMACS recipients are permitted to
disenroll from the case management program and join an HMO.
Four of the 15 licensed HMOs in the state—Mississippi Managed Care
Network, Apex Health Care, American Medical Plan, and Family Health Care
Plus—chose to participate in the pilot program. The largest HMO in the state,
United HealthCare, chose not to participate; it wanted to focus on building the
company’s patient base in the private market.
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Enrollment in the program began toward the end of 1996. DOM expected
that approximately 65,000 recipients in the 11 counties would become eligible
and approximately 30 percent of eligibles would enroll. Participation in the
pilot program would be conducted through a phased-in enrollment process that
would proceed on a county-by-county basis. By mid-1997, HMOs were enrolling Medicaid recipients in three counties—Warren, Harrison, and Hancock.
Enrollment was proceeding slowly for two reasons: (1) the process of initiating
projects in the three counties was stretched out because of the perceived reluctance of providers to join HMO networks (interviewees had mixed opinions
about how serious this problem was), and (2) within these counties, voluntary
HMO enrollment was lower than expected. In May 1997, total enrollment in the
three counties was slightly more than 6,000 of a three-county eligible population of approximately 40,000.18
The state designated its fiscal agent, EDS, to act as the marketing and enrollment contractor for the pilot program. HMOs are prohibited from marketing
directly to recipients, and EDS acts as a third-party broker. Proposed marketing materials must be submitted to and approved by DOM. Upon approval,
HMOs can only conduct mass marketing campaigns.
During the 1997 legislative session, there was much debate regarding the
implementation, continuation, or expansion of the capitated managed care program. The Senate attempted to pass legislation to continue the phase-in to all 11
counties. However, the Senate bill authorizing an expansion was stymied in the
House because of concerns that capitated managed care had the potential to disrupt patients’ relationships with their doctors and might not be feasible or
appropriate in Mississippi. Legislators were concerned that patients would
not be permitted to continue seeing their doctors if the doctors were not
included in the HMOs’ networks of providers. There were also concerns about
the perceived resistance of providers to joining HMO networks. All proposed
legislation failed, and the House refused to reauthorize the pilot project.
During and immediately after the legislative session, there was confusion
about the implications of the House’s refusal to reauthorize the 11-county pilot
project. Some believed that this meant the capitated pilot projects had to be
terminated. Eventually, DOM determined that authority for capitated pilot projects still existed from 1995 legislation. DOM plans to have introduced capitation in eight counties by the end of 1997, a modest expansion intended to avoid
confrontation with the legislature.
Tri-County Proposal
The amendment attempting to authorize the continuation of the 11-county
capitated managed care pilot program included a component to expand capitation on a mandatory basis to the three counties in the Jackson area—Hinds,
Madison, and Rankin. The bill specified that the organization selected to
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profit Mississippi corporation. According to interviewees, the bill was tailored
to ensure that the only organization meeting the criteria would be the
University of Mississippi Medical Center. This bill was viewed by many as an
attempt to provide the medical center with a monopoly for providing care to
Medicaid patients in the three counties. Other hospitals felt they would be
excluded from participation. As mentioned above, the bill was defeated during
the legislative session. Racial dynamics played at least a partial role in the
bill’s defeat. Some legislators were worried that providing a monopoly to the
University of Mississippi Medical Center could reduce Medicaid recipients’
access to African-American doctors or minority-owned clinics or HMOs.
Minority providers who were not affiliated with the university could lose a
substantial portion of their business.
Medicaid Managed Care and Contract Issues
The state has had to address numerous issues in its contracts with HMOs.
Even though few Medicaid capitated contracts are currently in place, like other
states, Mississippi must set standards related to provider network formation,
reimbursement methodologies, the benefit package, reporting requirements,
financial solvency, quality assurance, and program evaluations.
Some HMOs are offering an expanded Medicaid benefit package. For example, the state’s fee-for-service Medicaid program limits pharmacy benefits to five
prescriptions per person per month. Each HMO participating in the pilot project permits beneficiaries, with some exceptions, to exceed this limit. Offering
more services and benefits could put the HMOs at financial risk. However, offering an expanded benefit package could serve as an enticement for adult beneficiary enrollment. (Children already have unlimited medically necessary services for conditions identified by an EPSDT screen.)
Since Mississippi HMO membership levels are low, it will be important to
see if the plans can remain financially viable. Small plans are prone to high
administrative costs and unstable medical care expenditures. Even if DOM
permits Medicaid HMOs to continue, they may fail in the market.
Medicaid Payment Policies
Fee-for-service (FFS) reimbursement is the main method of provider payment in Mississippi’s Medicaid program, as capitated managed care is still rare.
As noted earlier, the state has relatively strict limits on the scope of Medicaid
services (e.g., number of inpatient hospital days, number of physician visits per
year) but is less restrictive in reimbursement policies.
Physician Services
The primary mechanism for paying physicians is FFS reimbursement. Even
under HealthMACS, services are provided on an FFS basis, although the pri-
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HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
mary care physician also receives a $3 monthly case management fee. As noted,
capitated HMOs serve a very small proportion of Medicaid recipients in
Mississippi.
Earlier analyses indicated that Mississippi’s 1993 Medicaid fee schedule
was about 74 percent of Medicare’s.19 This placed Mississippi squarely in the
middle of payment rates for physicians, since the national average was
Medicaid fees that were 73 percent of Medicare levels. (However, a representative of the state medical association noted that Medicare levels were about 30
percent below private pay levels.)
As in other states, there have been gains in certain areas, such as obstetrical payment rates. We were informed that there was more “competition” for
Medicaid prenatal care and deliveries because private physicians were increasingly willing to treat these Medicaid patients.
Health Centers and Clinics
As required under federal law, Federally Qualified Health Centers (FQHCs)
and Rural Health Clinics (RHCs) are paid under cost reimbursement by
Medicaid. Mississippi, a rural state with many health professional shortage
areas, has many FQHCs and RHCs. The state has traditionally objected to the
requirements for cost reimbursement for both types of health clinics. However,
RHCs have been a particular problem for DOM because their number has grown
quickly, leading to rapid increases in RHC-related expenditures. Between 1995
and 1996, Medicaid expenditures on RHCs increased 52 percent, although they
still constitute only 1 percent of the Medicaid budget. (Under the 1997
Balanced Budget Act, the requirement for cost reimbursement is phased out
over several years.)
We were told that public health clinics (e.g., maternal and child health)
were also paid on a cost-reimbursement basis by Medicaid. All public health
clinics are operated by the state, although counties contribute funds to help
support them. There is no federal requirement for cost reimbursement of public
health clinics, but this helps the Department of Health by maximizing federal
funding.
Hospitals
Hospitals are paid on the basis of per diem rates, which are prospectively set
by the state, based on hospital cost reports. The Mississippi Hospital Association believes that inpatient hospital payment rates covered about 75 percent of
cost. The association would like better reimbursement rates; nonetheless, no
Boren amendment lawsuits have been filed over the regular reimbursement rate
in 15 or 16 years.
In contrast, earlier American Hospital Association survey data indicate
that Mississippi’s hospital payments were much closer to cost and well above
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national averages for the ratio of Medicaid payments to cost. Analyses of the
association’s survey data indicate that in 1989, before DSH programs began,
Mississippi hospitals were paid 93 percent of cost while the national average for Medicaid was 78 percent. In 1993, including DSH payments,
Mississippi hospitals were paid 116 percent of cost, compared with a
national average of 93 percent. The state government also believes that
Medicaid inpatient reimbursement was relatively close to cost. Because of
rapid growth in outpatient payments, DOM plans to modify outpatient hospital reimbursement systems.
Disproportionate Share Hospital Payments
During the early 1990s, Mississippi had a strong incentive to develop DSH
payment systems that leveraged provider taxes, donations, and intergovernmental transfers (IGTs) to attract more federal funds. Because of Mississippi’s
77 percent federal match rate, each dollar of these provider revenues can draw
down more than three federal dollars. In 1997, provider-related funding ($195
million) contributed almost as much to support of the overall Medicaid program as the revenue contributed from the state general fund ($209 million).
Federal legislation passed earlier in this decade has limited the level of DSH
payments that can be used by Mississippi to around 12 percent of total
Medicaid spending.
Although the state was relatively late in starting DSH programs, compared
to other Southern states, it learned quickly how to maximize federally permitted DSH levels. Mississippi’s DSH and related programs served an important
role in reducing the need for state general-fund dollars during an era of
Medicaid growth and declining federal match rates.
The state began using hospital donations in 1991 to help cover a budget
shortfall for that year. In 1992, the state created a provider tax (a nursing home
bed tax) and also continued to use provider donations. In the latter part of 1992,
the state developed an IGT system to help cover that year’s Medicaid deficit.
The elimination of the provider donations and the adoption of IGTs was
required when federal legislation essentially banned provider donations.
After 1992, IGTs were the primary mechanism for generating revenue for
DSH payments, although a small nursing home bed tax has remained.
Mississippi has a relatively large number of county hospitals, as well as the
University of Mississippi Medical Center in Jackson, which participates in the
IGT process. The DSH payments help these public hospitals as well as some
nonprofit acute care hospitals; there is no mental health DSH program. The state
hospital association helped design and now administers the system; it
explained to us that the state gains the major share of additional federal revenue
generated from the DSH/IGT program. On average, hospitals received about 28
cents in new revenue for every dollar transferred. The additional federal dollars
were retained by the state and used to cover general expenditures.
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The Balanced Budget Act of 1997 gradually ratchets down the maximum
DSH level in Mississippi from $143 million in 1998 to $122 million by 2002.
In the recent past, DSH payments were not only an important general revenue
source for Medicaid but also served as a stopgap funding vehicle in 1992 and
1995, when supplemental funds were needed. The reductions under the new
law mean that the state will have to directly shoulder more of the total cost of
Medicaid.
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Delivering Health Care to
the Uninsured and
Low-Income Populations
S
afety net providers—such as public health departments, community
hospitals, and community health centers—provide a major share of preventive and primary health care to the uninsured and low-income populations. The role of safety net providers is particularly crucial in
Mississippi in light of problems such as poverty, high levels of uninsured persons, and a shortage of physicians and other health care providers.
State Health Department
Mississippi has a relatively strong, independent state Department of Health
that is dedicated to providing direct health services and addressing populationbased health issues. While many other states are refocusing their public health
agendas away from direct provision of health care services, Mississippi health
officials realize that their local health departments play an important role as
caregivers.
DOH implements its public health programs through central office bureaus,
district offices, and county health departments. The central office bureaus in
DOH include the Office of the State Health Officer, Office of Community Health
Services, Office of Health Regulation, Office of Personal Health Services, and
Office of Administrative and Technical Support. Each bureau provides a coordinating role for activities undertaken by the multicounty district offices and
the local health departments. All public health employees—whether employed
at the state, district, or county levels—are state employees.
Funding History of the Public Health Budget
Overall, both state and federal funding for public health in Mississippi
have been increasing. As shown in table 8, total public health funding
increased from approximately $111 million in 1989 to approximately $180
million in 1997, representing an average annual increase of 6.3 percent. During
this period, federal funds represented approximately 50 percent of public
health expenditures. In 1996, the latest year for which detailed data are available, 48 percent of public health revenue was from federal sources, 20 percent from state general funds, 7 percent from local funding, and 25 percent
from fees and refunds.20
Although the figures in table 8 provide overall trends in public health
expenditures, these figures may mask cross-cutting spending trends that may be
occurring within DOH. For example, expenditures on chronic illnesses have
decreased continuously in recent years while spending on environmental
health has increased. Expenditures for communicable disease control have also
increased in nearly all areas, especially expenditures on AIDS, epidemiology,
immunizations, sexually transmitted diseases, and tuberculosis. Funding for
the Women, Infants, and Children (WIC) nutrition program—which is supported entirely with federal appropriations and represents more than 60 percent of all federal public health expenditures in the state—remains close to
1992 levels.
As the table also reflects, state general fund revenue remained relatively
flat during the early 1990s. During this time, DOH learned to be less dependent on state general funds and made a concerted effort to maximize federal
Medicaid dollars. However, department officials indicated that Medicaid revenues in recent years have remained stagnant and are expected to decrease in
the upcoming years, as managed care expands. (Medicaid revenues are a portion of the “Other” rows in table 8.) Thus, the state may become less dependent on Medicaid dollars and more dependent on state general funds.
Public Health Priorities
Mississippi has a disproportionately high number of residents at risk for
poor health outcomes, particularly low-income and rural residents. In some
areas, public health efforts have experienced remarkable success; one of these
is immunization. According to a survey conducted by the Centers for Disease
Control, Mississippi ranked sixth in the nation for immunizing its two-yearolds against diphtheria, tetanus, pertussis, polio, measles, mumps, and
rubella.21
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Table 8 Trends in Sources of Revenue for the Mississippi Department of Health Based on Appropriations, FY 1989–98
State Fiscal Year
State General Fund
Federal
Othera
Total
Percent of Total
Federal
State General Fund
Othera
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State Fiscal Year
State General Fund
Federal
Othera
Total
Percent of Total
Federal
State General Fund
Othera
FY 1989
FY 1990
FY 1991
FY 1992
FY 1993
$21,068,224
$53,730,206
$35,982,620
$20,329,291
$60,459,293
$38,855,332
$22,121,111
$63,869,544
$48,972,665
$22,340,259
$68,956,396
$47,238,723
$ 21,974,550
$ 70,277,173
$ 47,556,139
$110,781,050
$119,643,916
$134,963,320
$138,535,378
$139,807,862
49%
19%
32%
51%
17%
32%
47%
16%
36%
50%
16%
34%
50%
16%
34%
FY 1994
FY 1995
FY 1996
FY 1997
Estimates
FY 1998
Appr.b
$23,973,426
$72,417,533
$49,579,556
$31,883,982
$78,211,791
$54,830,643
$34,601,549
$83,652,400
$54,742,130
$34,991,308
$90,054,005
$54,971,889
$ 35,902,437
$106,759,923
$ 54,940,340
$145,970,515
$164,926,416
$172,996,079
$180,017,202
$197,602,700
50%
16%
34%
47%
19%
33%
48%
20%
32%
50%
19%
31%
54%
18%
28%
Source: Office of Administration and Technical Support, Department of Health, Department of Health Funding History—Fiscal Years 1989 through 1998 Appropriations.
a. “Other” includes Medicaid, Medicare, third-party reimbursement, and county transfers.
b. According to Department of Health budget analysts, FY 1998 estimates are probably high. Revenues of $185 million to $190 million are more likely.
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Nonetheless, public health officials indicated that the state had been less
successful in addressing other public health issues and was renewing efforts
in those areas. According to officials, Mississippi leads the country in deaths
caused by cardiovascular disease. Heart disease and stroke account for more
than half of all state deaths.22 Specifically, DOH believes that one of the biggest
public health problems in the state is obesity and its corresponding link to
high rates of cardiovascular disease. In addition, because hypertension is a
major contributor to both heart attacks and strokes, the state plans to emphasize
hypertension screening and treatment programs. Tobacco use and unintentional
injuries are also of great concern.
Finally, prenatal care and reduction of infant mortality is a priority. As a
sign of the importance of the public health system, about half of the pregnant
women in the state receive prenatal care at local health departments. Although
some of these women are referred to other providers, this is a measure of the
pervasive role of the public health agencies. With the rise of Medicaid managed
care and the corresponding increase in care provided by private physicians, the
percentage of women who have received prenatal care at local health departments has declined from 57 to 48 percent.
Expenditures on disease control have continued to rise, in part because of
increased incidence of some communicable diseases. According to the state’s
Title V application, incidence rates of sexually transmitted diseases have risen
markedly. For example, rates for early syphilis rose from 93.3 per 100,000 in
1990 to 165 per 100,000 in 1994.23 The AIDS prevalence rate has also increased,
although it is still below average for the nation.
Safety Net Providers across the State
At the local level, public health departments are struggling to preserve their
patient base, maximize revenues, and provide core public health services,
while facing repercussions from the implementation of Medicaid managed care.
Having lost patients (and Medicaid revenues) to private providers under managed care, they are starting to contemplate ways to strengthen their position in
the new environment. Although public hospitals have not seen erosion in their
revenue base, they are beginning to think about forming integrated delivery systems to accommodate managed care. Nonprofit community health centers are
also concerned about their future and are preparing to adapt to Medicaid managed care.
Local Public Health Departments
Since the late 1970s, local health departments have been organized into
nine districts, each under the auspices of a district health officer. Each of the
county health departments within a district provides traditional public health
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HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
services such as sexually transmitted disease management, tuberculosis and
contagious disease management, environmental health services, immunizations, and water and sewer maintenance. Local health departments also provide
primary care such as prenatal care, family planning, EPSDT, and perinatal highrisk management. Providing preventive care is a higher priority to local health
departments than providing primary care.
In recent years, the volume of Medicaid reimbursements has fallen, partly
because of reductions in the number of AFDC-type clients and partly because of
Medicaid managed care (e.g., HealthMACS). With the decline in revenues, the
departments have had to cut back on personal health services and staff. In addition, family planning grant funding is very low, and services have been reduced. It has been difficult for health departments to replace those dollars.
County health departments serve all who need care, regardless of ability to
pay. Approximately 75 to 80 percent of those receiving family planning services
do not pay anything. If they are financially able, some patients pay a nominal
fee for services, but local health departments do not verify income.
Hospitals
The composition of the hospital market in the state has changed significantly in the past two decades. Large specialty hospitals in the metropolitan
areas used to be the prominent players, but now regional hubs are gaining market share and serving local communities. Of the 13 case study states in the
Assessing the New Federalism project, Mississippi has the largest concentration
of public hospitals. Approximately 46 percent of its hospitals are city or county
controlled, and 33 percent of all hospital beds are either city or county controlled. The state controls one hospital, and there are five federally owned hospitals. With the dominance of publicly owned and nonprofit hospitals in the
state, the penetration of large for-profit hospital chains is small. About 15 percent of the hospitals are for-profit.
On average, inpatient occupancy rates at Mississippi hospitals are approximately 50 to 55 percent, indicating substantial overcapacity. It seems paradoxical that a state that has significant health professional shortages would have
so much hospital overbedding.
Many rural hospitals in Mississippi operate like outpatient clinics, providing significant volumes of preventive and primary care and treating more and
more patients on an outpatient basis. One exception is the North Mississippi
Medical Center in Tupelo. This for-profit facility, the largest rural hospital in
America, reportedly has an 11 percent operating margin. Because of the HMO
and PPO activity that exists, however limited, hospitals are under pressure to
discount, and all small rural hospitals are in great fiscal jeopardy. Some rural
hospitals are just getting by using DSH dollars, and some are dramatically
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tals closed between 1982 and 1994 as a result of financial difficulties, but none
have closed since then.
Community Health Centers
With about a quarter of the state’s people under the FPL, community health
centers (CHCs) serve a vital role in the provision of care. Because so many areas
in Mississippi have been designated as health professional shortage areas and
CHCs must operate in HPSAs, Mississippi has a disproportionately high number of federally funded CHCs. They provide significant amounts of medical and
dental care to Medicaid recipients and indigent persons. In Mississippi, approximately 8.6 percent of the total population received care from CHCs or migrant
health centers in 1995, about three times the national rate of 2.7 percent (based
on federal Bureau of Primary Health Care data).
From a statewide perspective, HealthMACS and the capitated Medicaid
managed care pilot program are affecting CHCs’ operations, funding streams,
and patient bases. One concern is the case management fee. All HealthMACS
PCPs are entitled to a case management fee. However, because CHCs earn costbased reimbursement and wraparound reconciliation, they do not receive an
additional case management fee. (If CHCs were to lose their cost-based reimbursement and there were no supplemental Medicaid or federal grants to
replace the loss, they would have to curtail services.) In addition, as a result of
a lack of client education about the HealthMACS program contributing to a high
rate of automatic assignment of patients to providers, many patients historically
served by CHCs have been assigned to private providers. This shift is likely to
result in an initial loss of patients and revenue to CHCs. However, experience in
some areas of the state suggests that CHCs may recover when patients select
the CHCs during a subsequent enrollment period.
Even though managed care is relatively new to Mississippi, CHCs have
acknowledged that they cannot remain stagnant. They have started affiliating with other organizations to position themselves more favorably in the
market—forming networks of their own or focusing on providing services
reimbursed with non-Medicaid dollars. Recently, 14 CHCs and two rural
health centers formed the Magnolia Managed Care Network, Inc., a for-profit
subsidiary of the Mississippi Primary Care Association, which aims to serve
the Medicaid population in an HMO. Magnolia is still in its early stages of
operation, but the turmoil about capitated managed care leaves its future
uncertain.
Safety Net Providers in the Jackson Area
Jackson, the state’s capital and largest city, is in Hinds County in the westcentral part of the state. State and federal government agencies employ many
Jackson residents. In addition, retail and manufacturing are prominent indus-
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Table 9 Jackson, Mississippi, Demographic Data
Total Population: 1995, except Jackson 1994
Population Growth 1980–90 (percent)
Population Growth 1990–95 (percent);
except Jackson 1990–94
Population Breakdown (1990)
Percent White
Percent Black
Percent Other
Percent Hispanica
Percent Foreign-Born
Percent below the Federal Poverty Level (1989)
City: Jackson
County: Hinds
State: Mississippi
193,097
–3.1
251,031
1.4
2,697,243
2.2
–1.8
–1.3
4.7
43.6
55.7
0.7
0.4
1.0
22.7
48.4
50.9
0.7
0.5
1.0
21.2
63.5
35.6
0.9
0.6
0.8
25.2
Source: George E. Hall and Deidra A. Caquin, 1997 County and City Extra Annual Metropolitan, City, and County Data Book,
Bernam Press: Maryland, 1997.
a. Can be any race.
tries there. Jackson is not as heavily industrialized as the northern part of the
state, not as poor as the Delta area, and not as commercialized as the southern
Gulf Coast.
The largest metropolitan statistical area (MSA)24 in Mississippi, Jackson
accounted for 15.7 percent of the state’s population in 1995, with a total population of 193,097.25 In the Jackson MSA, approximately 76 percent of the population resides in an urban area and 24 percent in rural areas.26 Table 9 presents basic demographic data on Jackson, Hinds County, and Mississippi.
Slightly over half the population is African American; the remainder is
Caucasian. More than 22 percent of the city’s population is below the FPL, a
little lower than the statewide percentage.
As the largest metropolitan area, the Jackson area has the most active health
care marketplace. Hinds County contains eight hospitals, the most of any
county in the state. Of the eight, three are for-profit facilities. The state-owned
University of Mississippi Medical Center, a woman’s hospital, and a Veterans
Affairs facility are located in Jackson. Of all the service areas in the state, the
Hinds area has the most inpatient and outpatient surgeries, the highest number of outpatient emergency and clinical visits, and the most beds.27 Of the 25
major employers in the area, five are hospitals or health systems. Hinds County
has 1,403 physicians, approximately one-third of the state’s total of 3,401 active
physicians excluding those in federal service.28
Local Health Departments
Increased Medicaid managed care penetration, from both HealthMACS and
the managed care pilot program, is affecting the services and funding streams of
local health departments in the greater Jackson area and forcing them to reevaluate their role in the provision of care.
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The Hinds County health department is part of public health District V.
Some counties in District V, although not Hinds, participate in HealthMACS.29
Local public health departments in participating counties have experienced
declines in prenatal care and EPSDT services. Declines in services have
resulted in reduced revenues, particularly Medicaid revenues, and staffing cuts.
Now, many health departments have to find alternative sources to offset the
Medicaid reduction.
Several interviewees suggested that the extent of changes depends on the
strength of the relationship between the local health department and physicians. For example, after determining that a woman is pregnant, a general practitioner may decide to provide prenatal services directly and receive FFS reimbursement (along with the case management fee) or may refer her to the local
health department for prenatal care and receive only the case management fee.
If the relationship between the physician and health department is good and the
physician has a strong, stable practice, there is a good chance that the physician
will refer the patient to the local health department. Representatives from the
local health department expressed their belief that some primary care providers
do not like working with local health departments and prefer to provide services themselves. In sum, the relationships vary across the counties.
Even though local health departments focus more on providing public
health services, in an attempt to recapture some of the lost patient base, some
local health departments in District V have entered into agreements with other
health facilities (i.e., hospitals, clinics) to provide primary care. This collaboration could enable local health departments to serve as HealthMACS primary
care providers, but this option has not been put into effect.
Local public health clinics may experience similar pressures from the capitated managed care pilot program. Historically, some individuals who are
enrolled in the HMOs may have received primary care services at the local
health department, but they now receive services from physicians in the HMO’s
provider network. The capitated program currently operates in only three counties; thus the impact of HMOs on local health department utilization and funding has not been well established. However, if the program should expand,
financial pressure on local public health departments is likely to increase.
Generally, local health departments have a negative impression of how managed care programs are being implemented and operated. The following are
some of the concerns raised by District V:
• Many physicians participating in the managed care programs have not historically cared for vulnerable populations and do not know how to address
their medical or social needs.
• HealthMACS providers are not providing enough EPSDT services, and
screening rates may have dropped.
• Medicaid patients receiving care at some local health departments and CHCs
have experienced very long wait times during office visits.
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HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
Hospitals
In Hinds County, hospitals are just starting to discuss integrated delivery
systems and other forms of collaborative initiatives. For example, the University
Hospital and Clinic, a facility in which 43 percent of total inpatient days are
Medicaid, has taken the lead in creating an innovative Medical Mall. The mall
will respond to high demand for outpatient care at the medical center’s clinics,
create increased access to ambulatory care, and promote integration of care. This
renovated shopping mall in a low-income part of Jackson will house public
health and primary care clinics, a pharmacy, a durable medical equipment company, a home health agency, a day care facility, and accommodations for nursing
students and other organizations (e.g., a health advocacy group).
When the new bill to expand capitated Medicaid managed care into three
counties—Hinds, Madison, and Rankin—was proposed in the legislature, the
university was slated to be the corporation to run the pilot program. However,
the bill was not passed. The University Medical Center is still trying to develop
links to be a major player in the managed care market. Other hospitals in the
area have adopted other strategies. For example, Mississippi Baptist Medical
Center wants to increase the percentage of Medicaid persons they serve.
Madison County Medical Center encountered financial difficulties and had to
reclassify medical and surgical beds as geriatric psychiatric beds to obtain more
favorable reimbursements.
Community Health Centers
One of the largest CHCs in the state, the Jackson-Hinds Comprehensive
Health Center, is located in Jackson. Jackson-Hinds presently operates six clinics that provide a comprehensive array of adult general medicine, pediatrics,
dentistry, optometry, gynecology, and family planning services. It uses a mobile
van to improve access to care in the community. Between 60 and 65 percent of
the patients Jackson-Hinds treats are Medicaid recipients. Therefore, management is extremely concerned about the introduction of Medicaid managed care
and the possibility of a declining Medicaid patient base, particularly from
Medicaid patients being drawn away to private providers. In hopes of positioning itself more favorably under managed care, Jackson-Hinds assumed the
leadership role in the design and development of Magnolia Managed Care
Network, Inc. However, Jackson-Hinds has now taken a less active role in that
project and wants to concentrate on developing other possible managed care
arrangements and networking opportunities. Last year Jackson-Hinds had financial difficulties that led it to close two of the eight clinics it formerly operated.
Part of the problem appeared to be related to heavy competition under
Medicaid managed care in the county where the recently closed clinics were
located; the other part of the problem was caused by a change in Medicaid audit
procedures, which created financial stress for many CHCs. Under new leadership, Jackson-Hinds’ financial health seems to have improved.
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Long-Term Care for the Elderly
and Persons with Disabilities
A
n important part of the health care system in Mississippi is the longterm care system, which includes nursing homes, home and community-based care services, and institutional services for mental
health, mental retardation, and developmental disabilities. Certain
aspects of the long-term care system in Mississippi are relatively unique compared to other states. Mississippi is reliant on institutional care, with relatively
little use of home and community-based care, particularly in Medicaid. There
are stringent limits on the level of long-term care services available; the
certificate-of-need (CON) program has imposed a moratorium on new nursing
home beds and home health agencies. One result is a very high occupancy
rate in nursing homes and long waiting lists. Aged, blind, and disabled
Medicaid enrollees in Mississippi are about half as likely to use long-term
care services as are enrollees in other states—a pattern that may be partially
attributable to the moratorium.
Medicaid Long-Term Care Utilization and Expenditures
For the aged, blind, and disabled, per capita Medicaid spending on longterm care services in Mississippi is substantially below the national average.
The share of Medicaid expenditures for long-term care is lower than the United
States average (25.9 percent versus 34.2 percent), and the absolute dollar
amount is also much less—$715 per enrollee annually compared with $1,296 at
the national level, as of 1995 (table 10). Mississippi residents use Medicaid
long-term care services less frequently than older and disabled people nationally. In 1995, 23 percent of the state’s aged Medicaid enrollees used long-term
Table 10 Medicaid Spending on Aged and Total Enrollees, 1995
Mississippi
All Enrollees
Spending on LTCa (all ages) as percentage of total spending
Spending on elderly (LTC and acute) as percentage of total spending
Spending on elderly for LTC as percentage of total spending
(acute and LTC)
Per Enrollee
Spending on LTC (all ages)
Spending on elderly (LTC and acute)
Spending on elderly for LTC
Spending on LTC per elderly LTC recipient
Percent of elderly receiving LTC
United States
25.9%
25.7%
34.2%
25.4%
59.8%
75.9%
$715
$5,872
$3,514
$15,057
23%
$1,296
$9,738
$7,388
$15,902
46%
Source: The Urban Institute. Based on HCFA 2082 and HCFA 64 data. U.S. data for 1995 are preliminary.
a. Long-term-care.
care services, half the national rate of 46 percent. During the same period, only
7 percent of blind and disabled Medicaid recipients used long-term care services, compared with 17 percent nationally.
One possible reason for the lower rate of use and lower per enrollee expenditures is the limited supply of long-term care facilities in the state, caused in
part by the moratorium. Another possible reason is that Mississippi’s Medicaid
program provides eligibility for the elderly and disabled up to 95 percent of
the FPL. As this threshold is more generous than that of most states, Mississippi’s Medicaid caseload may include a higher-than-average proportion of
nondisabled elders who do not require long-term care. It is also possible that
families in Mississippi provide relatively more long-term care services than in
other states as a result of cultural differences.
For the long-term care services it does support, Mississippi retains a
stronger reliance on institutional care than many other states. This is especially true for elderly persons: Nursing homes and intermediate care facilities
for the mentally retarded (ICFs/MR) together received more than 99 percent of
all Medicaid long-term care funding for the elderly in 1995, with the majority of
ICF/MR funding going to large facilities. There is relatively little home and
community-based care in the state. For example, in 1995, Medicaid expenditures per enrollee for home and community-based services averaged $221
nationally, but only one-tenth that amount in Mississippi.
Long-Term Care Facilities
Nursing homes across Mississippi have a 99 percent occupancy rate—the
highest in the country. In 1995 there were 16,059 beds in 183 long-term care
facilities throughout the state (although the number reaches 19,276 if all longterm and converted beds in acute facilities are counted).30 Part of the reason
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HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
for Mississippi’s tight bed supply is the state’s CON program, which imposes
caps on nursing home beds and home health agencies. Since 1990, Mississippi
has had a permanent CON moratorium on skilled or intermediate nursing care
beds, with limited exceptions. Although many other states have similar moratoria on additions to nursing home bed supply, these have generally been lifted
temporarily to adjust for increased demand, or permanently, as is the case in
neighboring Alabama. Mississippi has retained its moratorium despite
extremely high demand for such care. However, there have been increases in
the supply of long-term care beds. Mississippi allows established nursing
homes to expand by either 10 percent of their bed supply or a total of 10 beds
over each three-year period. Also, many rural hospitals have converted a portion of their hospital bed supply to skilled long-term care beds. There is also a
moratorium on the licensing of new home health agencies, although existing
agencies may expand their services within their jurisdictions. In addition to
concerns about the overall number of beds and agencies, issues have been
raised about equity in geographic distribution and about lack of competition
in such a tightly limited market.
Mississippi’s reliance on institutional care extends to its developmental disability programs as well. While 83 percent of the state’s 100 ICFs/MR are
“small,” 75 percent of ICF/MR residents are in large facilities. While the population of people in large ICFs/MR across the country decreased by almost half
from 1981 through 1994, Mississippi’s population declined by only about 13
percent. Five large facilities were operating in 1960, and those same five are
operating today.
Long-Term Care for the Elderly
Nearly 60 percent of Mississippi’s Medicaid funding for the elderly in 1995
went to long-term care services, with the majority of these funds going to institutional care. Although Mississippi has much lower rates of nursing home utilization than the nation as a whole, the state spends approximately the same per
elderly long-term care recipient ($15,057 per year) as is spent nationally
($15,902). Mississippi nursing home residents have lengthy average nursing
home stays (170 days compared with 100 days nationwide), and this offsets
the lower per diem rates paid by Medicaid and Medicare for routine and skilled
nursing care. Long-term care expenditures and per capita figures for the United
States and Mississippi are summarized in tables 10 and 11.
Mississippi is one of four states (along with Kansas, Maine, and South
Dakota) participating in a demonstration project funded by HCFA to implement
a case-mix approach to Medicaid payment for nursing home stays. Mississippi
is using the Resource Utilization Groups, Version III classification system
(RUGs III) to apply severity measurements to nursing home day rates.
According to HCFA staff and nursing home representatives in the state, the
case-mix system has had a positive impact on quality of care, since nursing
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Table 11 Medicaid Long-Term Care Expenditures by Eligibility Group, Mississippi and United States
(Expenditures in Millions)
Mississippi
Long-Term Care
Expenditure
United States
Average Annual
Growth
1990
1992
1995
1990–92
Total
$198.6
$320.2
$403.3
27.0%
Elderly
Nursing Home Care
ICFs/MRa
Mental Health
Home Care
$121.3
120.1
0.5
0.0
0.6
$209.0
206.3
2.0
0.0
0.7
$239.4
236.1
3.0
0.0
0.4
Blind and Disabled
Nursing Home Care
ICFs/MRa
Mental Health
Home Care
$76.2
25.6
45.0
0.0
5.6
$105.7
34.7
60.0
5.0
5.9
1.1
5.6
Adults and Children
Average Annual
Growth
1990
1992
1995
1990–92
1992–95
8.0%
$32,264.2
$42,542.5
$53,996.1
14.8%
8.3%
31.2%
31.0%
91.7%
n/a
3.5%
4.6%
4.6%
13.8%
n/a
–19.1%
$18,408.9
15,131.3
348.9
973.0
1,955.7
$24,846.4
20,542.9
452.0
1,286.0
2,565.6
$30,413.7
25,571.5
615.8
1,107.3
3,119.1
16.2%
16.5%
13.8%
15.0%
14.5%
7.0%
7.6%
10.9%
–4.9%
6.7%
$149.9
39.9
87.0
11.8
11.2
17.8%
16.3%
15.6%
n/a
3.1%
12.3%
4.8%
13.1%
32.8%
23.7%
$12,842.4
3,161.3
7,241.3
457.9
1,982.0
$16,201.0
3,968.0
8,380.4
682.1
3,170.5
$21,618.7
4,813.3
9,321.1
881.3
6,603.0
12.3%
12.0%
7.6%
22.1%
26.5%
10.1%
6.6%
3.6%
8.9%
27.7%
13.9
129.5%
35.7%
1,012.9
1,495.1
1,963.7
21.5%
9.5%
Source: The Urban Institute, 1997. Based on HCFA 2082 and HCFA 64 data.
a. Intermediate care facilities for the mentally retarded.
1992–95
Long-Term Care
Expenditure
homes in the state have had to staff up to meet a growing demand for rehabilitation and therapeutic care.
Most Medicaid home and community-based care provided in the state (86
percent) is home health, which has grown dramatically over the past 10 years.
During the period 1985 through 1995, the number of home health patients
increased 112 percent, while the number of home health visits increased 455
percent. In 1995, home health patients received an average of 97 visits, most of
which (95 percent) were covered by Medicare. The rate of Medicare home health
recipients per 1,000 Medicare beneficiaries exceeds the national average by
50 percent—the rate in Mississippi is 140.9, and the national average is 94.2.
The growth in home health care has occurred despite more than a decade
with a statewide moratorium on home health agencies. The overall growth in
home health has been fueled by Medicare, not Medicaid. Medicaid covers far
less home health care in the state and has fewer home health recipients compared to other states. From 1992 through 1995, Medicaid home health expenditures on the elderly decreased at an average annual rate of 19.1 percent, while
nationally expenditures grew an average of 6.7 percent per year. Other Southern
states also have high Medicare/low Medicaid home care utilization.
The Medicaid program provides home and community-based services
under a waiver administered by the state Department of Human Services. The
waiver specifically targets the elderly and disabled people age 21 years and
older. Eligibility for waiver services is limited to people who are unable to perform at least three activities of daily living without substantial human assistance or supervision. The program is being expanded statewide.
Long-Term Care for Younger Persons with Disabilities
Although Mississippi has begun to move toward a community-based longterm care model for those with disabilities, progress is slow. In Mississippi,
younger persons with disabilities are more likely to receive institutional care in
large facilities than they are in many other parts of the country.
Nearly three-quarters of the $556 million that Medicaid spent on nonelderly
blind and disabled people in 1995 went to acute care—up from two-thirds of
the total at the beginning of the decade. Nationally, Medicaid spends proportionally more on long-term care for blind and disabled people—42 percent compared with 27 percent in Mississippi.
Most of the nearly $150 million spent by Medicaid on long-term care services for this population was for care provided in institutions, primarily
ICFs/MR ($87 million) and nursing homes ($40 million). The remainder was
divided between mental health services (both institutional and other) and home
care. Medicaid blind and disabled expenditures and per capita figures for the
United States and Mississippi are summarized in tables 11 and 12.
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Table 12 Medicaid Spending on the Blind and Disabled, 1995
Mississippi
All Beneficiaries
Spending on blind and disabled as percentage of total Medicaid
Spending on blind and disabled as percentage of LTCa
Per Blind and Disabled Enrollee
Spending on acute and LTC
Spending on LTC per blind and disabled LTC recipient
Percent blind and disabled receiving LTC services
United States
35.7%
37.2%
32.5%
40.0%
$4,150
$16,514
7%
$8,022
$19,335
17%
Source: The Urban Institute. Based on HCFA 2082 and HCFA 64 data. U.S. data for 1995 are preliminary.
a. Long-term-care.
Mississippi’s Medicaid program provides home and community-based services to children and adults under three waivers:
• The waiver targeting elderly and disabled people age 21 years and older,
administered by the Department of Human Services, as discussed above.
• The Department of Mental Health waiver serving mentally retarded and
developmentally disabled people of any age who would otherwise require
care in an ICF/MR; services include personal care, respite care, habilitation
(including residential and day habilitation, prevocational services, and supported employment services), physical and occupational therapy, and
speech, hearing, and language services.
• The Independent Living Waiver, operated and overseen by the Department of
Rehabilitation Services, that targets disabled people ages 21 through 64 who
would otherwise require services in a nursing home. Case management and
personal care services are included in the waiver, with eligibility limited to
people with severe orthopedic and neurological impairments. The waiver
further limits eligibility by requiring people receiving services to assist in the
development and direction of the care plan.
The Department of Mental Health coordinates and administers the delivery
of mental health services, alcohol and drug abuse services, and mental retardation services for children and adults in the state. According to the 1996–97
State Health Plan, in FY 1995 more than 67,000 people received services
through the public community mental health system. 31 This included nearly
16,000 children and adolescents with serious emotional disturbances. State
government provides or finances the majority of mental health services; the
state general fund is the largest single source of funding. In 1995, the
Department of Mental Health budget was approximately $260 million, excluding the federal share of Medicaid to community mental health centers.
The department operates the state’s two psychiatric hospitals—East
Mississippi State, which has 1,983 licensed beds, and Mississippi State, a 700bed hospital. Mississippi is attempting to improve the quality of care provided
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in these two hospitals. For the first time, the state is applying for Joint
Commission for the Accreditation of Healthcare Organizations approval for
both hospitals. The state is also building two new psychiatric facilities. Each
will be a 60-bed facility for shorter-term stays (up to 90 days) for adults with
serious mental and emotional disorders. In addition, the legislature has
approved a plan for the Department of Mental Health to convert a small college campus to an alternative living arrangement for approximately 100 adults
with serious mental illness.
Mississippi had 2,122 licensed beds classified as ICF/MR for 1996. About
one-quarter of these were located in five comprehensive regional facilities for
persons with developmental disabilities. The other beds are operated by the
state’s 15 regional mental health centers. These regional facilities and mental
health centers also serve as the primary vehicle for delivering community services throughout the state.
Mississippi recently enacted a series of reforms designed to strengthen and
improve the availability and delivery of mental health and mental retardation
services in the state. The Mental Health Reform Act of 1997 established minimum standards for regional mental health and mental retardation commissions and other community service providers for all mental health, mental
retardation, alcoholism, drug misuse, developmental disability, compulsive
gambling, addictive disorders, and related programs and services. The new
law carves out mental health services from the Medicaid managed care pilot
program and requires Medicaid managed care enrollees to be served by community mental health centers under fee-for-service arrangements.
Despite the passage of these reforms, it is not clear if the legislature will provide enough funding to implement the quality improvements contained in the
act. If, for example, standards require that changes be made in the number or
composition of community mental health center staff, centers might not have
the resources to respond to the new rules.
According to advocacy groups, people with physical and developmental
disabilities, mental retardation, and mental illness can face significant hurdles
in accessing important acute and long-term care services in Mississippi. This
is particularly true for children with mental and emotional problems. In practice, very little home and community-based care is directed toward persons
with mental illness in Mississippi. Many of these people are relegated to longterm institutional care, some very limited Medicaid home and communitybased care outside of the waiver programs, or other stopgap measures.
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Challenges for the Future
A
s the health care marketplace in Mississippi evolves over the next
few years, officials and health care providers at both the state and
local levels will have to deal with pressing issues to ensure that
Medicaid-covered, uninsured, and other vulnerable populations have
access to affordable, high-quality health care. These issues are related to the
financial health of the state and the structure of the health care delivery system.
Financial Health
Mississippi officials anticipate that the state economy will continue to grow
(albeit from a small base relative to other states) and that the state treasury will
remain strong for the next few years. In general, this is good for health care
programs. However, there will be some pressure on the state budget to contain
spending in areas like Medicaid. Among the reasons are: revenues are projected
to grow but at a lower rate than earlier in the decade; a recent school financing
law is projected to consume most of projected surplus revenues; and Mississippi’s disproportionate share hospital (DSH) funding will decline as a result
of the Balanced Budget Act of 1997.
These anticipated pressures may be more than offset by the availability of
two new sources of revenue for health programs: funds from the tobacco lawsuit
settlement and new funds for the State Children’s Health Insurance Program. It
remains to be seen how the influx of dollars from the tobacco lawsuit settlement
will be used (i.e., on health care, tax reduction, or other areas) and how much
the state can keep. While Mississippi has a large child health insurance allocation, this program would require an additional $10.7 million in state matching
funds, although the matching rate is much lower (16 percent) than the stan-
dard Medicaid match percentage (23 percent). Mississippi will need to determine how it will develop its child health insurance program—whether as a
Medicaid expansion or as a new state program. While these decisions have not
yet been made, it appears that these two revenue streams offer the potential for
new health care resources in Mississippi for the next few years.
Health Care Delivery and the Market
Mississippi’s health care marketplace has witnessed relatively little change
and can still be characterized by traditional indemnity-style insurance and
almost no HMO penetration. Preferred provider organizations (PPOs), however,
have become more common. The consensus among health care industry representatives and legislators is that within the next three to five years Mississippi
will see a more pronounced presence of managed care and possibly a more
competitive environment from increased demand in the long-term care industry. In addition, there may be greater formation of health system networks and
increases in access to care for people in rural areas. Although there has been relatively little privatization of public hospitals or other health care facilities to
date, privatization also may become more common.
Medicaid Managed Care
A major issue surrounding managed care is to what degree managed care
principles will be incorporated into programs for the Medicaid population. Two
Medicaid managed care models are proceeding. One is HealthMACS, a primary care case management (PCCM) program that will be implemented
statewide on a mandatory basis for Temporary Assistance for Needy Families
(TANF) and related enrollees. HealthMACS has generated little controversy and
appears to garner support from legislators and providers. Support for the
HealthMACS program stems from the fact that the program is not viewed as a
threat to private providers nor is it expected to diminish quality of care.
However, as a fee-for-service program, HealthMACS is perceived as having
limited potential to save money. Although the program is generally supported,
certain community health centers and other health clinics have expressed concerns over the program’s impact on their respective funding streams.
HealthMACS might increase Medicaid clients’ access to private providers but
might also imperil the publicly funded caregivers who form the traditional
safety net. As Medicaid patients are lured to private providers, safety net
providers are faced with declining patient bases, services, and revenues.
In contrast to HealthMACS, the health maintenance organization (HMO)
pilot program has not gained much support from providers or legislators.
Although the legislature tried to terminate the pilot project, the Medicaid
agency has continued to support the voluntary HMO project. HMO supporters
believe that this type of program holds the best opportunity for long-term cost
containment.
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HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
Mississippi provides a valuable lesson: The state’s recent experiences provide some evidence that capitated managed care for Medicaid may not be
inevitable. There is resistance and skepticism to capitated managed care from
consumers, a strong provider community, and the legislature. Capitated managed care enrollment has not progressed at levels anticipated by the Division
of Medicaid. If Medicaid enrollment levels do not increase dramatically, HMOs,
by financial necessity, will probably leave the Medicaid HMO market. Because
of some confusion regarding the statutory authority for governing the capitated
pilot program, it is likely that the program will continue to generate controversy
in the upcoming years. Should HMOs not succeed in serving Medicaid recipients, the state will address Medicaid-related issues within a service delivery
system that could look quite different from most state Medicaid programs.
The Marketplace
If both commercial and Medicaid managed care become more prominent,
the response of physicians, hospitals, and health centers will be of interest. Will
they become part of networks or change services or patient bases to receive
more favorable financial reimbursement or help secure their existence? Will
these changes affect how Medicaid and indigent persons receive medical care?
Mississippi’s health care provider market has a variety of long-standing difficulties and dilemmas that still need to be addressed. For example, many areas
of the state, especially rural areas, have health professional shortages, while at
the same time the overall inpatient hospital system is overbedded.
Conclusion
Mississippians face a number of interesting choices about the future of the
health care system in their state. There are some long-term issues, such as the
growth of commercial and Medicaid managed care, the effect of the evolving
marketplace upon health care providers, and long-standing problems of
provider shortages. The state will also need to consider public health issues
such as reducing the level of cardiovascular disease, infant mortality, and other
causes of premature mortality. In the near future, Mississippi policymakers
must consider
• whether to lift or modify the moratoria on new nursing home beds and
home health agencies, and, if so, how to allocate the new slots in an equitable fashion;
• how to use new funds from the tobacco settlement; and
• how to expand health insurance for children, as a result of the new federal
legislation.
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Notes
1. ReliaStar Financial Corporation. “ReliaStar State Health Rankings.” Minneapolis, MN:
Author, 1996.
2. ReliaStar Financial Corporation, 1996.
3. Because of special 1996 legislation, Louisiana had a higher rate for a temporary period of
October 1995 to June 1997, but otherwise Mississippi has always had the highest matching
rate.
4. “Mississippi: Waiting to Spend Money from Tobacco Settlement,” Washington HealthWeek,
October 13, 1997.
5. Susan Laudicina, Gretchen Babcock, Joan Gardner, Fernande Victor, and Jacqueline Yerby.
State Legislative Health Care and Insurance Issues: 1996 Survey of Plans. Washington, DC:
Blue Cross and Blue Shield Association, December 1996.
6. Health Policy Tracking Service. “Subject: Finance, Title: Individual and Small Group
Reform,” April 30, 1997.
7. Health Policy Tracking Service, 1997.
8. Health Policy Tracking Service, 1997.
9. Laudicina et al., December 1996.
10. Susan Laudicina, Gretchen Babcock, Joan Gardner, Fernande Victor, and Jacqueline Yerby.
State Legislative Health Care and Insurance Issues: 1996 Survey of Plans. Washington, DC:
Blue Cross and Blue Shield Association, June 1996 Supplement.
11. Laudicina et al., June 1996.
12. Laudicina et al., June 1996.
13. Laudicina et al., December 1996.
14. InterStudy. The InterStudy Competitive Edge Part III: Regional Market Analysis, December
1996.
15. Association of American Medical Colleges, 1996, forwarded by Judy Barber at the Human
Services Agenda.
16. Most of the counties are located in the Mississippi Delta region or border the Mississippi
River. Two counties are located on the Gulf Coast.
17. Mississippi Division of Medicaid. Annual Report, 1994.
18. Emily Wagater. “Medicaid Program May Expand.” The Clarion-Ledger, May 19, 1997.
19. Stephen Norton. “Medicaid Fees and the Medicare Fee Schedule: An Update.” Health Care
Financing Review, 17(1):167-182, 1995.
20. Mississippi Department of Health. Annual Public Health Report, 1994.
21. Mississippi Department of Health. Annual Report, 1996.
22. Mississippi Department of Health. Annual Report, 1996.
23. Mississippi State Department of Health. Title V Application, page 26.
24. The Jackson Metropolitan Statistical Area includes Hinds, Madison, and Rankin Counties.
25. MetroJackson Mississippi Chamber of Commerce. Demographic Profile, 1997.
26. MetroJackson Mississippi Chamber of Commerce, 1997.
27. Mississippi Report on Hospitals: 1996 Draft, forwarded by Harold Armstrong, Chief, Division
of Health Planning and Resource Development, Mississippi State Department of Health.
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28. George E. Hall and Deidra A. Caquin. 1997 County and City Extra Annual Metropolitan,
City and County Data Book. Maryland: Bernam Press, 1997.
29. We interviewed representatives from the West Central Health Department District, District
V, which includes Hinds County. Even though Hinds County did not participate in
HealthMACS and the managed care pilot program at this time, several of the other counties
in the district did.
30. Mississippi State Department of Health. Vital Statistics, Annual Report, 1996.
31. Mississippi State Department of Health. 1996–1997 Mississippi State Health Plan, Jackson,
Mississippi, 1997.
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HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
APPENDIX
List of People
Interviewed
State Agencies
Ed Thompson, Harold Armstrong,
Ernest Griffin, Buck Ross,
Ingrid Williams
Randy Hendrix, Ed Butler,
Ed LeGrand
George Dale
Buck Stevens
Mississippi Department of Health
Mississippi Department of Mental Health
Mississippi Department of Insurance
Mississippi State Board of Pharmacy
Legislative Officials
Jim Bean, Bob Davidson
David Reilly
Mississippi State Senate
Legislative Budget Office
Provider Associations
Sue Cameron
Corrie Hall
Charles Matthews
Robert Pugh
Martha Carole White
Mississippi Hospital Association
Mississippi Association for Home Care
Mississippi Medical Association
Mississippi Primary Health Care Association
Mississippi Health Care Association
Advocacy Groups
Judy Barber, Warren Yoder
Rims Barber
Tessie Brunini Schweitzer
Lynn McNair
Mark Smith
Royal Walker
Mississippi Health Advocacy Program
Human Services Agenda
Mississippi Families As Allies for Children’s
Mental Health
Mental Health Association in Mississippi
Coalition for Citizens with Disabilities
Institute for Disability Studies
Hospitals
Jeff Lann, Michael Stevens
Gene Shuler
Ted Woodrell
Aaron Shirley
Mississippi Baptist Medical Center
Madison County Medical Center
University of Mississippi Medical Center
Jackson Medical Mall Foundation
Health Maintenance Organizations
Jesse Buie, Cindy Vincent
Charles Pitts
Mississippi Managed Care Network
United HealthCare of Mississippi, Inc.
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Community Health Centers
Linwood Driver
Jackson-Hinds Comprehensive Health Center
Local Health Department
Don Grillo
Hinds County Health Department
Others
Alpha Gene Brummett,
Bettye Burgess
Dennis Frate
Lanny Craft
64
Central Mississippi Area Agency on Aging
University of Mississippi
Mississippi Comprehensive Health Insurance
Risk Pool Association
HEALTH POLICY FOR LOW-INCOME PEOPLE IN MISSISSIPPI
About the Authors
Leighton Ku is a senior research associate in the Urban Institute’s Health
Policy Center. His principal research interests include state health reform
efforts and the financing of health care for low-income families. He has also
spent many years investigating the response of American teenagers to the AIDS
epidemic. He teaches in the Public Policy program at George Washington
University.
Alicia Berkowitz is a research associate with the Urban Institute’s Health
Policy Center. She has been studying Medicaid reform and managed care efforts
in various states, including California. She has also studied issues relating to
long-term care, health care markets, and people dually enrolled in Medicare
and Medicaid. Before joining the Urban Institute, she was on the staff of a private health care management consulting firm conducting health care analyses
for public and private clients.
Frank Ullman is a research associate with the Urban Institute’s Health
Policy Center, where he currently focuses on issues related to children’s health
insurance. For the Assessing the New Federalism project, he has conducted case
studies on health care developments in Mississippi and New Jersey. His recent
research has examined the impact of managed health care on infant health.
Marsha Regenstein is vice president of the Economic and Social Research
Institute, a nonprofit organization in Washington, D.C., that conducts research
and policy analysis on health care and social services. She has written about
children’s health and early education, Medicare managed care, and persons
with disabilities.
Errata
Several published State Reports and Highlights include an error in Table 1, “State
Characteristics.” Incorrect figures were included for noncitizen immigrants as a
percentage of the population. Corrections were made on August 13, 1998 to both the
HTML and PDF version of these reports on the Assessing New Federalism website.
Correct figures for 1996
Noncitizens as a
Percent of the
Population
UNITED STATES
6.4%
Alabama
0.9%
California
18.8%
Colorado
5.1%
Florida
10.0%
Massachusetts
5.4%
Michigan
2.3%
Minnesota
3.0%
Mississippi
0.9%
New Jersey
8.8%
New York
11.9%
Oklahoma
1.5%
Texas
8.6%
Washington
4.3%
Wisconsin
2.1%
Source: Three-year average of the Current Population Survey (CPS) (March 1996-March 1998,
where 1996 is the center year) edited by the Urban Institute to correct misreporting of citizenship.
The error appears in the following publications:
State Reports:
Health Policy: Alabama, Colorado, Florida, Massachusetts, Michigan, Minnesota, Mississippi,
New Jersey, New York, Texas, Washington
Income Support and Social Services: Alabama, California, Massachusetts, Michigan, Minnesota,
Texas, Washington
Highlights:
Health Policy: Alabama, Florida, Massachusetts, Michigan, Minnesota, Mississippi, New
Jersey, New York, Oklahoma, Texas, Washington
Income Support and Social Services: Minnesota, Texas
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