Managed-care plan shifting, task force told

Bid uses hospitals, not firms, to trim state’s Medicaid cost

Arkansas Gov. Asa Hutchinson is once again exploring a plan to use managed care to reduce the cost of providing services to the developmentally disabled and mentally ill.

But this time, instead of hiring traditional managed care companies, the state would make payments to organizations owned by hospitals and other health care providers to provide the Medicaid benefits.

Dennis Smith, a senior adviser on Medicaid to Department of Human Services Director Cindy Gillespie, told the Arkansas Health Reform Legislative Task Force on Monday that the plan would save the Medicaid program money by reducing emergency room use and hospitalizations.

The new proposal would also generate millions of dollars in revenue for the state through a tax on insurance premiums collected on the managed care plans.

Some task force members complained Monday that they weren't briefed earlier on the new planning efforts, including a meeting in August between Gillespie and the board of the Partnership for a Healthy Arkansas that resulted in the hiring of a consultant that developed the proposal.

Under the proposal, statewide organizations, known as provider-led coordinated care organizations, would contract with regional provider networks that would share information and create plans for recipients' care.

In an Oct. 14 letter to Gillespie, Hutchinson said the proposal could be a "viable option for providing improved care management to those in need of an intensive level of these services."

He asked Gillespie to present him with a plan and recommendations on the proposal by Nov. 30.

"If this provider-led model can be designed to give the State the same advantages as a [traditional] managed care model, I would prefer to move forward with the provider-based model, since it appears to be more appropriate for Arkansas," Hutchinson said in the letter.

The new proposal is among efforts being considered by Hutchinson and the task force to reduce the growth of Medicaid spending by enough to save at least $835 million over the next five years.

During an April special legislative session, Hutchinson withdrew a proposal to hire managed care companies after lawmakers said they needed more time to consider the idea.

Some task force members said they were afraid the savings from the managed care proposal would come at the expense of small health care providers, who then might stop accepting Medicaid patients.

Task force members expressed concern Monday about Gillespie's meeting with the Partnership for a Healthy Arkansas, formed last year by the University of Arkansas for Medical Sciences, Baptist Health, Washington Regional Medical Center in Fayetteville, St. Bernards Medical Center in Jonesboro and Arkansas Blue Cross Blue Shield to explore ways to collaborate and lower costs.

At Gillespie's request, the partnership hired Health Management Associates to develop the concept for the provider-led managed care proposal.

In response to questions from Sen. Linda Chesterfield, D-Little Rock, Gillespie said she didn't know the amount of the contract or which entity provided the money.

Chesterfield said she was concerned that legislators weren't asked to review the contract.

"This is not being done transparently," said Rep. Michelle Gray, R-Melbourne, who also had questions about the contract.

In a phone interview after the meeting, partnership Director Bob Dolan said the money for the contract came from the partnership's funds.

He said the amount was "in excess of six figures" but that the contract's terms prevented him from being more specific.

Sen. Missy Irvin, R-Mountain View, expressed frustration that Gillespie didn't follow up on her suggestion to contact smaller providers about the proposal.

"My problem with this whole thing is that you won't listen to us," Irvin said.

Gillespie said she plans to begin meeting with a broader group of providers this week.

She said UAMS Chancellor Dan Rahn suggested she approach the Partnership for Healthy Arkansas after she "lamented" during a conversation that she thought the provider-led managed care model would be a good fit for Arkansas, but that she hadn't had time to pursue it.

"It builds, we believe, well on what we already have in Arkansas," Gillespie said.

The Legislature formed the task force last year to recommend changes to the state's Medicaid program, which serves about 1.1 million Arkansans.

The panel's final report is due by the end of the year.

State Rep. Charlie Collins, R-Fayetteville and a task force chairman, proposed during Monday's meeting that the task force increase its $2 million contract with The Stephen Group, a Manchester, N.H., consulting firm, by up to $100,000 and direct the firm to monitor and assess the provider-led managed care proposal.

The task force adjourned without voting on the motion after a roll call requested by Chesterfield found that not enough members were present for a vote.

Metro on 10/25/2016

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