JEFFERSON CITY -- Missouri's efforts to make major changes in its Medicaid program and reduce its annual $2 billion costs are progressing better than originally expected.

That's the view of officials in the Missouri Department of Social Services, the huge Jefferson City agency that administers the bulk of the state's welfare programs.

Marilynn Knipp, associate director, says the agency is preparing to inaugurate the revamped Medicaid program, called Managed Care Plus, in the central part of the state, after winding up registration and sign[up efforts in the St. Louis region. When the mid-Missouri sign-up is finished, the department plans to move to metropolitan Kansas City.

Managed Care Plus, also known as MC+, requires that all Medicaid recipients in the state, with the exception of the elderly and physically disabled children, register with a health maintenance organization for all future medical assistance. If a recipient fails to designate one of the HMOs available, the state designates one.

Registration for MC+ started earlier this year in St. Louis, St. Louis County and Franklin, Jefferson and St. Charles counties. Some 152,000 Medicaid recipients voluntarily chose from several health-care groups that were participating, while 21,280 recipients were automatically assigned by the state, Knipp said the program which started Aug. 1 in St. Louis, already has produced savings of $11 million.

Knipp said most of the savings were due to a dramatic reduction in costs of emergency-room service for routine illnesses and a major effort to encourage preventive medicine. Additional savings were the result of revised medical/surgical responses and closer management of claims by the state and health-maintenance organizations.

Registration in the central MIssouri area is expected to begin next month and should be completed within 60 days. There are 34,000 Medicaid clients in the 18 counties in the central area.

Missouri has more than 600,000 Medicaid recipients, a figure which places it mid-range nationally in terms of the proportion of aid recipients to the general population of the state.

Knipp explained the MC+ program was planned to be inaugurated in stages, avoiding a problem that has accompanied immediate registration and assignment in other states, such as Tennessee. That state's reform program called for statewide registration and assignment, which caused major problems and confusion that led to several abrupt stoppages in health-delivery services.

Following the Kansas City phase-in, it is likely the state will focus on Southeast Missouri. Knipp said the absence of managed-care organizations in this section of the state may decide the next priority. She said that Southwest Missouri has made more progress in forming HMOs than Southeast Missouri.

The timetable calls for MC+ to begin operating in both of these regions by March 1997.

Although it has submitted requests for several welfare waivers from the U.S. Department of Health and Human Services, Missouri didn't need federal permission to move Medicaid recipients to HMOs. Several past waiver requests have been placed on hold by the state until more details are learned about block grants. Knipp said lump sum federal payments, depending on their final amounts, would have an impact on some of Missouri's waiver requests.

Final determination won't be made until the federal budget has been approved in Washington, with the possibility that some proposals cannot be funded fully under the block grant changes.