The state will stop sending cancellation notices to Medicaid and private-option recipients for two weeks to give state workers time to clear a backlog of income-verification records submitted by recipients, Gov. Asa Hutchinson said Tuesday.
At the same time, Hutchinson rejected calls to extend the time recipients have to respond to the cancellation notices and submit income documentation to the state Department of Human Services.
Hutchinson announced the moratorium three days after the Human Services Department canceled coverage for 35,668 Medicaid recipients, including 31,501 private-option enrollees, who failed to respond in time to requests for records related to their incomes.
The governor said he called for the two-week break in sending out notices after hearing "anecdotal" reports that some recipients' coverage was canceled even though they remained eligible and had submitted the requested records to the department.
"Until we can be assured that we can send out the right notifications or termination notices, no other termination notices will be sent out," Hutchinson said.
To help clear the backlog of records, he said, the department has authorized employees to work an unspecified amount of overtime and has reassigned 20 employees to help process the records.
He said he also has lifted a hiring freeze on 35 positions within the department.
Income-verification notices sent out starting in mid-June gave the recipients 10 days to respond. Recipients who failed to respond within 15 days were sent notices informing them that their coverage would be canceled.
The moratorium won't restore coverage that has already been canceled or halt the terminations for an additional 12,000 private-option enrollees and other Medicaid recipients whose coverage is set to end Sept. 1.
But Hutchinson noted that those whose coverage has been canceled can appeal. If a successful appeal is filed within 90 days of the termination, the coverage can be restored retroactively to the date it was canceled.
Sen. David Sanders, R-Little Rock, and a sponsor of the law creating the private option, said the moratorium will help, but added that he would still prefer that recipients be given 30 days to respond to the Human Services Department's records requests.
The terminations can cause disruptions in medical care and, in the case of private-option enrollees, affect the viability of insurance companies' plans, he said.
Under the private option, the state uses federal Medicaid funds to buy coverage for enrollees on the state's health insurance exchange. The state created the program as a primary way to extend coverage to adults with incomes of up to 138 percent of the poverty level: $16,105 for an individual, for instance, or $32,913 for a family of four.
Hutchinson's announcement also didn't satisfy the state Democratic Party, which earlier Tuesday called on the governor to extend the 10-day notice deadline.
H.L. Moody, a party spokesman, said the moratorium is a "step in the right direction," but one that wouldn't have been necessary if recipients had been "given more time to begin with and if DHS had been more prepared for the process."
Hutchinson said that giving recipients more time to respond to the Human Services Department notices would not "solve any problem other than put more money at risk for the state" and "slow up the process" of conducting the income checks.
For instance, he said, removing 21,000 ineligible private-option enrollees from the program would save the Medicaid program about $10 million a month.
Such costs are expected to be paid by the federal government through 2017, when Arkansas will begin paying 5 percent of the cost.
"The federal government determined that it should be a minimum 10-day notice, so I presume from that that they believe that 10 days is an adequate notice, even though states can prolong that," Hutchinson said.
Human Services Department spokesman Amy Webb said federal law allows states to give recipients up to 30 days to respond to the records requests, but Arkansas has typically given Medicaid recipients 10 days, the minimum allowed.
The terminations affect private-option enrollees and other Medicaid recipients whose eligibility is governed by rules that went into effect Jan. 1, 2014, under the 2010 Patient Protection and Affordable Care Act.
Federal law requires recipients' incomes to be checked annually to ensure they are still eligible, but the Human Services Department didn't begin its first round of checks under the new eligibility rules until mid-June because of difficulties it encountered in replacing the state's 25-year-old eligibility and enrollment system.
As a result, the department is working to clear a backlog by a Sept. 30 deadline set by the U.S. Centers for Medicare and Medicaid Services. By then, the department expects to have checked the incomes of about 600,000 Medicaid recipients, including children covered by ARKids First and about 200,000 private-option enrollees.
Most, if not all, of those whose coverage has been canceled are among 350,000 Medicaid recipients who enrolled through the new eligibility and enrollment system.
If state Department of Workforce Services records show that recipients' incomes have changed by 10 percent or more compared with a year or more ago, the recipients are asked to provide pay stubs or other records within 10 days proving that they remain eligible for coverage.
Webb has said information is required even if the Workforce Services Department records indicate the recipient's income is lower than it was a year ago, as long as the change is at least 10 percent.
The other 250,000 recipients enrolled through the department's older eligibility and enrollment system. They are being given 30 days to submit information to be entered into the new system. So far, more than 100,000 of those recipients have been sent notices requesting the submissions, Webb said.
Webb said last week that the department had estimated that 26,500 Medicaid recipients would lose coverage Saturday. She said Tuesday that that number referred only to private-option enrollees and that the number had grown since the department gave the estimate to insurance companies on July 21.
So far, the department has started checking the incomes of about 330,000 Medicaid recipients and has found about 64,000 to be eligible, she said.
The department is waiting to receive requested information from about 216,000 recipients, she said.
According to the department, recipients with questions about the coverage-renewal notices can contact a call center in Batesville at (855) 372-1084 or any of the department's county offices. A directory of county offices is posted on the department's website at humanservices.arkansas.gov.
The department sends information on those whose coverage is terminated to the Centers for Medicare and Medicaid Services, which determines eligibility for tax-credit subsidies made available under the Affordable Care Act.
The agency directs those no longer eligible for Medicaid to healthcare.gov, the federal website where they can apply for the subsidies and enroll in coverage.