A federal agency Wednesday approved Arkansas' plan to establish "independence accounts" for enrollees in Arkansas' private-option Medicaid program and to limit the program's coverage of nonemergency medical transportation.
The changes were required by special language attached to the state Medicaid program's appropriation bill during the 2014 fiscal session of the Legislature.
The special language prohibited any money from being spent on the private option unless Arkansas secured federal approval for the changes and had them in place "no later than February" of 2015.
Marilyn Tavenner, administrator of the U.S. Department of Health and Human Services' Centers for Medicare and Medicaid Services, notified state Department of Human Services Director John Selig of her agency's approval of the changes in a letter Wednesday.
Amy Webb, a spokesman for the state Department of Human Services, said state officials had been "talking with CMS all along" and expected the federal agency to approve the changes.
"For us, this is just the next step in the process, and it allows us to fulfill those requirements that the Legislature set forth," Webb said.
The state created the private option in 2013 as a primary way of expanding Medicaid coverage as authorized under the 2010 federal health care overhaul law.
The expansion extended eligibility for 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.
Under the private option, Arkansas uses federal Medicaid funds to buy coverage on the state's health insurance exchange for the newly eligible adults.
More than 188,000 people were enrolled in the Medicaid-funded plans as of Nov. 30.
The independence account program will encourage enrollees with incomes greater than 50 percent of the poverty level to make payments of up to $15 per month to help pay the cost of their medical care.
The federal poverty level is $11,670 for an individual and $23,850 for a family of four.
Those contributions will accumulate in an account, with the balance capped at $200. Enrollees who leave the private option will be able to use money from the account to pay the premiums for non-Medicaid insurance plans.
Enrollees who make an independence account contribution for a given month will not have to pay out of pocket for their medical care for that month.
Currently, enrollees with incomes above the poverty level have copayments for some services -- $8 for a doctor's office visit, for instance.
Those with incomes below the poverty level who fail to make contributions into the accounts still will not be required to make copayments to receive care.
However, the company hired to administer the program will bill the individual for the copayment, and it will be deducted from any balance in the independence account that the person has accumulated. If the account does not have a balance, the participant would owe the amount of the unpaid copayment to the state.
State officials initially planned to require contributions of up to $25 per month for enrollees above the poverty level. The maximum contribution was lowered to ensure that no enrollees were required to contribute more than 2 percent of their household incomes, Webb said.
The Human Services Department plans to start the independence account program for the 37,000 enrollees with incomes above the poverty level this month, and for the 60,000 enrollees with incomes between 50 percent and 100 percent of the poverty level this summer.
John Carter, the Medicaid program's information systems manager, said the Human Services Department began mailing letters with information about the program to enrollees with incomes above the poverty level earlier this week.
By Monday, those enrollees should also receive cards, known as MyIndyCards, that they can present to a doctor or other health care provider to receive services without being charged a copayment.
The first payments under the program will be due Feb. 20. Enrollees who make a contribution will be able to continue to receive medical services at no charge in March, while those who fail to make a contribution will be charged a copayment if they seek care.
Enrollees can see information about their accounts and about copayments made on their behalf using a website, myindycard.org, that went online Dec. 24.
This week, the Human Services Department also sent information about the program to thousands of health care providers across the state, Carter said.
The department plans to host educational Web seminars for providers, as well as insurance agents and brokers, he said.
In February and March, the department will send information about the program to enrollees with incomes below the poverty level.
"This is a big change for some of these folks, and we really need to spend some time educating them about it," Webb said.
In December, state Surgeon General Joe Thompson told a legislative committee that administering the independence account program will cost about $15 million a year, with half of the funds coming from the state and the rest from the federal government. Little Rock-based Datapath is administering the program, Thompson said.
According to the amendments to the waiver that authorized the private option, the state also will "establish prior authorization" for nonemergency transportation for private-option enrollees.
Because private insurance plans don't cover nonemergency medical transportation, the Medicaid program pays for the service directly for private-option enrollees as a "wraparound" benefit.
The Human Services Department plans to limit private-option enrollees to eight Medicaid-funded trips to or from medical appointments each year.
Suzanne Bierman, assistant director of the state's Medicaid program, said the eight-trip limit will be added to the state's Medicaid plan.
Metro on 01/01/2015