The state Department of Human Services plans to notify tens of thousands of food stamp recipients today that they have been assigned to private insurance plans as the state’s Medicaid program expands to cover more people.
Those who will be receiving the notices are among more than 65,000 recipients of the Supplemental Nutrition Assistance Program, commonly known as food stamps, who previously indicated they wanted to enroll in Medicaid.
Meanwhile, several legislators said Monday that they were unhappy to learn that Arkansas Blue Cross and Blue Shield, one of the companies offering the private plans, has notified physician specialists that it will pay them less than primary-care doctors for services provided to Medicaid recipients and others who enroll in coverage through the state’s health-insurance exchange.
State Rep. Tommy Wren, chairman of the House Insurance and Commerce Committee, said he was “appalled” to learn of the lowered rates.
“This is a fairness issue,” Wren, D-Melbourne, said at a committee hearing he called on the issue Monday. “You can’t tell a speciality doctor that we’re going to pay you less for the same procedure than a general practitioner.”
The expansion approved by the Legislature this year extended eligibility for Medicaid to adults with incomes of up to 138 percent of the poverty level - $15,860 for an individual or $32,500 for a family of four.
Most of those who are eligible are expected to be able to sign up for a private plan on Arkansas’ health-insurance exchange and have the premium paid by Medicaid. The program also will cover out-of-pocket costs for those with incomes below the poverty level and reduce those costs for others, depending on income.
About 10 percent of the expanded Medicaid-eligible population - those determined to be “medically frail” - are expected to be assigned to the traditional Medicaid program rather than a private insurance plan because of their health needs. Coverage will start Jan. 1.
As of Oct. 26, more than 12,000 food stamp recipients completed the signup process by going to a state website, insureark.org, where they filled out a questionnaire meant to identify those with exceptional health needs. Those found not to be medically frail were then directed to choose a private health plan.
The automatic assignments will affect those who visited the website and were found to not be medically frail but failed to choose a plan, as well as those who indicated they wanted to enroll but never visited the website.
The notices going out today will inform the food stamp recipients which plan they were assigned and give them 30 days to switch plans if they want, Human Services Department spokesman Amy Webb said.
After the 30 days, they will not be able to change plans for a year.
Human Services Department officials have acknowledged that some people with exceptional health needs could end up being automatically assigned to a plan rather than traditional Medicaid.
State Medicaid Director Andy Allison said the department is developing a system for identifying those who were automatically assigned to a plan but would be better served by the traditional program.
The initial assignments will be made by a computer according to a formula designed to encourage competition among insurance companies in the seven coverage regions delineated by the Arkansas Insurance Department.
Under the formula, in the central, northwest and north central regions of the state - where four companies are offering plans - the assignments will be made with a goal of ensuring that each company covers at least 20 percent of the Medicaid recipients in the region.
In the northeast and south central regions, where three companies are offering plans, the goal is for each company to cover at least 25 percent of the recipients.
In the southeast and southwest regions, where two companies are offering plans, the goal is for each company to cover at least 33 percent of the recipients.
Once the goal is met, the recipients will be assigned evenly to the companies “on a round-robin basis,” Allison said.
“You have to have competitors to have competition, and that’s what Year One is about,” Allison said.
In future years, the assignments will be based on factors such as premium costs and measures of quality.
The lower reimbursement rates offered to specialists by Arkansas Blue Cross and Blue Shield apply to services provided to anyone who signs up for the company’s plans on the exchange, including Medicaid recipients.
Those who are not eligible for Medicaid but have incomes of less than 400 percent of the poverty level may be eligible for tax credits to help them pay insurance premiums.
The income threshold for the tax credits is $45,960 for an individual or $94,200 for a family of four.
Cal Kellogg, executive vice president and chief strategy officer with Arkansas Blue Cross and Blue Shield, said the company decided to offer lower rates to the specialists as a way of lowering the cost of premiums for plans offered on the exchange while supporting primary-care doctors, who are seen as key players in efforts to reduce health-care costs.
The specialists’ rates are still higher than those paid by the traditional Medicaid program as well as Medicare, the federal health-insurance program for the elderly, Kellogg said.
The change was made as an amendment to specialists’ contracts with the insurance company, so the specialists have to accept the lower rates to receive reimbursement for their other Blue Cross customers.
David Wroten, executive vice president of the Arkansas Medical Society, said he urged Blue Cross to consider alternatives, such as an across-the-board cut to reimbursement for all doctors or keeping the rates the same.
Blue Cross also could have cut the rate paid for specialty services instead of for any service provided by a specialist, Wroten said. Under the rate schedule the insurer implemented, he noted, an obstetrician would be paid less for delivering a baby than a primary-care doctor.
Noting that doctors and insurance companies have been collaborating over the past few years on changes to the state’s health-care payment system, he said, “Why all of a sudden would we just quit working together?”
Mike Stock, chief executive of QualChoice Health Insurance, one of the other companies offering plans on the exchange, said at the hearing that his company did not reduce the rate it offers to specialists.
Insurance Commissioner Jay Bradford told legislators that he does not have any authority over the rates paid by insurance companies to providers, but Wren urged him to help negotiate a new agreement between doctors and Blue Cross.
Gov. Mike Beebe has not spoken to Blue Cross representatives about the issue, spokesman Matt DeCample said.
“We understand the frustration we’ve been hearing, but it’s private industry,” DeCample said. “They can set rates as they see fit.”
Arkansas, Pages 9 on 11/05/2013