The Arkansas Department of Human Services offered a plan Thursday that would help shrink a list of 3,000 developmentally disabled people who are waiting for home-based services.
The proposal involves hiring managed-care companies owned by health care providers to oversee the benefits of some Medicaid recipients. The department also released a draft of legislation Thursday that would allow it to hire the companies.
The managed-care companies would provide health coverage and coordinate care for the mentally ill and developmentally disabled.
The Human Services Department would use Medicaid funds -- about 70 percent of which typically come from the federal government -- to pay a fixed amount for each recipient to be covered under such a company's insurance plan.
Through a state tax on insurance premiums, the companies would then repay 2.5 percent of those funds to the state, providing money that the department hopes to use to reduce the waiting list for help with daily living tasks and other services, agency spokesman Amy Webb said in an email.
The Stephen Group, a Manchester, N.H.-based consultant to an Arkansas legislative task force, estimated last year that the premium tax would generate about $56 million a year.
The money would allow the state to serve as many as 1,200 people in the first year of the managed-care program, Webb said.
That money would come on top of about $8.5 million annually in money from the 1998 national settlement with tobacco companies that Act 50, signed by Gov. Asa Hutchinson last month, directs toward serving people on the waiting list.
State officials have said the tobacco settlement funds will provide services to 500 to 900 people on the list.
Combined with that money, Webb said, the premium tax money would help "reduce and eventually eliminate" the waiting list.
Under the department's proposal, provider-owned companies would serve about 30,000 mentally ill or developmentally disabled Medicaid recipients whose health care expenses total about $1 billion annually.
The managed-care plans would not cover residents of the state's nursing homes, assisted-living facilities or human development centers. Those recipients would continue to be covered under the traditional, fee-for-service Medicaid program.
The draft legislation would require each managed-care company to offer coverage statewide and to be at least 51 percent-owned by health care providers.
The companies would be responsible for processing claims and maintaining a provider network "sufficient to ensure that all services to recipients are adequately accessible within time and distance requirements defined by the state."
The department would pay bonuses to companies that meet performance criteria.
Measures monitored by the department would include reductions in unnecessary emergency-room use, adherence to prescriptions and reductions in avoidable hospital admissions.
The state's insurance commissioner would be in charge of certifying the companies, which would be required to have reserves of at least $6 million, or another amount set by the Arkansas Insurance Department, and "capital or surplus" of at least $750,000.
Applications for certification would be due by July 1 although companies also could receive a "conditional certification" until April 1, 2018, when they would be required to demonstrate full compliance with state requirements.
Rules implementing the system would be exempt from the state's Administrative Procedures Act, which provides opportunities for public comment and legislative review of state agency regulations.
Webb said department officials have "provided the draft legislation to a few legislators and hope to move forward once we've met with providers and answered their questions and made any needed changes to the draft."
The managed-care proposal is part of an effort by Hutchinson to curb the growth of Medicaid enough to save at least $835 million in state and federal funds over five years.
He set the goal as a way of ensuring the state will have the money to pay for its share of the recent expansion of the Medicaid program that has extended coverage to more than 330,000 people since 2013.
By reducing avoidable medical expenses, The Stephen Group estimated, the provider-led managed-care model would save the Medicaid program about $40 million a year in state and federal funds, while traditional managed care would save about $56 million.
An earlier proposal to use traditional managed care met with resistance from providers, who feared managed-care companies would cut reimbursement rates and reduce services.
Putting providers in control of the companies would ease those concerns, Mike McCreight, executive director of Jacksonville-based Pathfinder, which serves the developmentally disabled, said Thursday.
"We would have a relationship with them and more of a partnership, rather than managed care dictates what happens and we have to act accordingly," McCreight said.
A Section on 02/10/2017