JOHN BRUMMETT: A care conundrum

The task force studying the private-option form of Medicaid expansion is warming up to do something else potentially as controversial and substantial.

It is looking closely at recommending that the state hire managed-care companies to coordinate health services and mete out the federal and state cash for care of the aged and disabled, in nursing homes and otherwise.

The private option, by which the state takes Obamacare's Medicaid expansion money and buys private health insurance for persons up to 138 percent of poverty level, is an easily manageable budget item by comparison.


Care for the aged and disabled consumes more than half the state's regular Medicaid budget, meaning the vast expanse of services not including the private option or ARKids First. And care for the aged and disabled is the part of the Medicaid budget that grows most consistently, seemingly at levels unsustainable in the state government budget as we now conceive it.

Basically, care for the aged and disabled is currently unmanaged by state government, the payer. Providers bill Medicaid, and Medicaid pays.

Under managed care, some forms of which are in place in 40 states, a for-profit company would contract with the state to receive a flat amount of state and federal money to pay to providers of Medicaid for the aged and disabled, and to make that amount work.

Critics--nursing homes, some doctors, a couple of doctors' wives in the Legislature--say that only trained professional providers should manage the health care of the neediest and frailest among us. They say a managed-care company operating for profit would simply take the money, extract its reliable cut and reduce reimbursement rates to providers.

That's not how it is supposed to work.

Ideally, a managed-care firm would perform individual case managements to coordinate care, presumably wisely and efficiently. It would have to eat overages right along with providers.

Here is a basic example that was cited to me separately by two advocates of managed care: A patient on Medicaid has asthma that is made worse by summer conditions. The condition is exacerbated by the patient's inability to afford a window air conditioner. So the patient seeks cooling only amid the damaging particles blown from a box fan.

The managed-care company could purchase the patient a window air conditioner. It could do so on the risk assessment that such a capital outlay would prove cheaper than four emergency room visits for asthma attacks during the summer--and the next summer, and the next.

There even is discussion that managed-care companies would impose a centers-of-excellence concept, which can work like this example: A rural Arkansas resident on Medicaid could go to his doctor with symptoms that the doctor found to be one of two possible diagnoses, and proceeded to treat on both fronts. The managed-care company could say no. It could say let's send the patient to a clinic elsewhere that it had determined to be a "center of excellence" to seek a more clear diagnosis.

The patient and his family could be provided lodging and other expenses on the theory that the costs you know and can control in search of the most reliable medical outcomes are wiser investments than treating the waterfront of possibilities.

So, naturally, there is fierce opposition, not only from nursing homes and doctors, but from organizations and businesses that contract with Medicaid now. They compose a vast network that state Sen. David Sanders of Little Rock has taken to calling "the Medicaid industrial complex."

The task force is supposed to make its report by the end of the year. That timing is essential in regard to the private option, which likely will need a federal waiver by 2017 to let the state add work or work-training requirements and other forms of personal responsibility to private option clients.

Work on seeking and securing that waiver needed to begin yesterday. Actually, it has begun already, with the state's filing a notice that it will be seeking a new waiver.

The managed-care recommendation favored by the co-chairman, Rep. Charlie Collins of Fayetteville, and embraced in concept by Gov. Asa Hutchinson, is a hybrid. It is to begin a managed-care system for those high-dollar services for the aged and disabled, and to leave other basic Medicaid services to provider-driven savings schemes.

Managed care could prove a legislative fight for the ages. Local lobbyists already have contracted with national managed-care companies that have picked up the strong scent of a new business opportunity soon to open up in Arkansas.

What happens to the quality of care for the aged and disabled and to the long-term sustainability of the state budget--those merely are the stakes, basic yet epic.

------------v------------

John Brummett, whose column appears regularly in the Arkansas Democrat-Gazette, was inducted into the Arkansas Writers' Hall of Fame in 2014. Email him at jbrummett@arkansasonline.com. Read his @johnbrummett Twitter feed.

Editorial on 12/01/2015

Upcoming Events