LITTLE ROCK — Republican lawmakers voiced concern Wednesday that the state’s doctors will be squeezed financially by the far-reaching Medicaid cost-containment strategy being advanced by the Arkansas Department of Human Services.
During an informational session attended by about a dozen members of the House and Senate, legislators also questioned department officials about the role an influential consulting company plays in the state’s Medicaid payment overhaul.
Department officials recently announced that the speed at which Medicaid costs increase has slowed significantly, a change they attribute to the payment changes. Some Republicans have met that explanation with suspicion.
The department began in October replacing its traditional model of paying for each medical test and procedure without any limits to one in which doctors and other providers will be held financially accountable for patient costs.
The shift is being led by the state’s $5 billion Medicaid program, but two of the state’s largest private insurers, Arkansas Blue Cross and Blue Shield and Qual-Choice of Arkansas are also onboard.
That alliance worries some legislators.
“If you have physicians out in the state who don’t want to do this, they’ll have nowhere to go,” said Cecile Bledsoe, RRogers, and chairman of the Senate Public Health, Welfare and Labor Committee. “I’m just not comfortable with that.”
Bledsoe’s husband is a doctor, as is the husband of Sen. Missy Irvin, R-Mountain View.
Irvin pressed Department of Human Services Director John Selig on part of his agency’s plan to give greater responsibility to nurse practitioners and physician’s assistants. Agency officials and other health-care experts like state Surgeon General Dr. Joe Thompson have said the state doesn’t have enough doctors in many areas to adequately carry out some aspects of the payment overhaul.
“If every single payer is going to cut [doctors] to the bone when they could have just been a nurse practitioner, when they’re going to replace them all with nurse practitioners anyway, why would you go to medical school? Why go through all that training? And the patients at the end of the day, we suffer,” Irvin said.
The department’s request to add $12.4 million to an existing contract with McKinsey & Co., a global consulting firm, also raised questions.
The contract was delayed in the Joint Budget Committee recently.
At Wednesday’s informational session, Selig said the department didn’t have the technical capacity needed to proceed with its payment initiative.
Department off icials thought the agency would have received a roughly $40 million federal grant that could have paid the consulting firm by now, but the U.S. Department of Health and Human Services hasn’t awarded it yet.
“We waited too long to come to you. We got caught short,” Selig said.
Sen. Jonathan Dismang, R-Searcy, wanted to know if Blue Cross and Blue Shield and QualChoice were effectively piggybacking on state resources on the payment changes.
“The concern, at least on my part ... is them utilizing the system, trimming down the amount they’re paying to doctors and then everybody then is being paid at a level that they’re not making money and it puts a crunch on the provider system,” Dismang said.
Medicaid Director Andy Allison said Medicaid isn’t sharing recipient information with private insurers.
The only way to make the payment revamp work, Selig said, is to have the public and private sector pursue cost containment together.
About 20 percent of a typical doctor’s practice is Medicaid patients, with the rest covered by private companies. Doctors and other providers wouldn’t change the way they do business for such a smallpercentage of their revenue, Selig said.
The “vast majority” of doctors are already within the acceptable range of average yearly costs, Selig said. So they won’t have to change the way they practice medicine if they don’t want to do so.
The state’s payment overhaul has two parts.
“Episodes of care” are specific illnesses and conditions for which the Department of Human Services tracks yearly costs. If doctors go too far above a statewide average for a specific “episode,” they have to pay the Department of Human Services for half of their excess costs. If their costs are below the average range, they keep half of the savings. Those who fall within the acceptable range of costs break even.
So far, the department has started tracking five episodes, including upper-respiratory infections, congestive heart failure, and hip and knee replacements. The agency expects to begin monitoring at least eight additional episodes later this year.
Department officials have said about 95 percent of Medicaid costs ultimately will be covered by the payment overhaul.
The agency also recently announced that Medicaid costs have increased at historically slow rates, a change they attribute to the payment revamp.
The Joint Budget Committee will likely review the McKinsey contract, said Amy Webb, Department of Human Services spokesman.
Arkansas, Pages 9 on 02/14/2013