Arkansas will have a better chance of controlling its Medicaid budget if it hires managed-care companies to handle benefits for nursing home residents, the disabled and other patients with expensive medical needs, the director of the state Department of Human Services told legislators Tuesday.
John Selig, who plans to leave the Human Services Department at the end of this year, said the department has tried to implement changes in how it provides long-term services for the elderly, disabled and mentally ill, but with limited success.
Private companies would likely have more flexibility, Selig said.
"I think we are more likely to have success that's systemic and broad across the agency, or across those high-cost Medicaid populations, using some forms of managed care," Selig said.
At a meeting of the Health Reform Legislative Task Force, Selig also said the department is working to investigate Medicaid recipients whose records indicate they are deceased, incarcerated or living outside the state.
According to a report by The Stephen Group of Manchester, N.H., a check by Dayton, Ohio,-based LexisNexis of more than 200,000 enrollees in the private option indicated that 20,110 had out-of-state addresses, 790 were incarcerated and 128 were deceased.
Out of more than 447,000 recipients in the traditional Medicaid program whose records were checked, the LexisNexis review found that 22,781 had out of state addresses, 408 were incarcerated and 367 were deceased, according to the report.
Mark White, a deputy director of the Human Services Department, said many of those whose eligibility was flagged in the LexisNexis review have already been removed as a result of the Human Services Department's own check of the eligibility of recipients who have been enrolled for at least a year.
That review, which started in May and halted in August, has resulted in the coverage for about 60,000 private-option enrollees and other recipients being terminated.
"The renewal process is doing what it was intended to do" White said.
Originally scheduled to begin last fall, the annual check of Medicaid recipients' eligibility was delayed because of difficulties the Human Services Department encountered in installing a new electronic enrollment and eligibility verification system.
Human Services Department officials have said the new system is needed to verify eligibility under rules that went into effect on Jan. 1, 2014, under the federal Patient Protection and Affordable Care Act.
The eligibility checks were stopped after officials with the federal Centers for Medicare and Medicaid Services said they would issue "changed guidance" about the state's practice of giving Medicaid recipients 10 days to respond to requests for income-related records, a Human Services Department spokesman has said.
Before it resumes the review, the department is revising the income-request notices to give recipients 30 days to provide the records. It also is exploring changes to help speed up the eligibility verification process.
In the meantime, Selig said the department and the Arkansas Center for Health Improvement have been attempting to contact Medicaid recipients whose coverage was terminated. About 40 percent have phone numbers that have been disconnected or are out-of-date, he said.
"This is a very transient population," he said.
To more quickly identify recipients who are no longer eligible, Selig said the Human Services Department is exploring the possibility of checking income and address records at multiple times during the year, instead of just annually.
At Gov. Asa Hutchinson's request, the Legislature created the task force earlier this year to recommend changes to the state's Medicaid program, including a replacement for the private option.
Under the private option, the state uses Medicaid funds to buy coverage on the state's federally run health insurance exchange for more than 187,000 low-income Arkansans.
The state created the program in 2013 as a primary way to extend coverage, as authorized under the 2010 Patient Protection and Affordable Care Act, to adults with incomes of up to 138 percent of the poverty level: $16,243 for an individual, for instance, or $33,465 for a family of four.
In a report released Oct. 7, the task force's consultant, The Stephen Group, recommended keeping the private option but adding requirements to encourage healthful behavior and for unemployed recipients to seek jobs.
The report also recommended the state change the way it provides services for the elderly and disabled, which make up the bulk of the state's $6 billion in annual Medicaid spending, and help more people receive services while living at home instead of in nursing homes.
Special language attached to the department's appropriation bill by the Legislature last year prevented the agency from implementing certain changes until after Jan. 1, 2015.
Since then, department officials have said their plans for such changes have been put on hold while the task force forms its recommendations.
Selig noted Tuesday that managed-care companies would have more flexibility on implementing changes and in their spending.
For instance, he said, the companies are allowed to spend money on certain benefits that the Medicaid program wouldn't be allowed to pay for directly because they aren't considered medically necessary. For instance, he said a managed-care company might buy an air-conditioning unit that would help keep a Medicaid recipient from developing a costly heat-related illness.
He also cited the Human Services Department's effort since 2011 to implement an electronic tool to assess the needs of the disabled. Many managed-care companies likely already have such tools, he said.
According to The Stephen Group report, if Arkansas hired managed-care companies to provide benefits for all its Medicaid recipients, it could save $2.4 billion in federal and state funds from 2017-2021.
If it hired managed-care companies for just the high-cost population, such as the elderly and disabled, it could save almost $2 billion over the same time period. Without hiring managed-care companies, the state could save $700 million by implementing changes itself to better coordinate care, the report found.
Connie Borengasser, chief executive of Vantage Point of Northwest Arkansas, a psychiatric hospital, told legislators that she feared that managed-care companies would implement cuts that jeopardize patients' care, however.
Jason Miller, chief executive of The Bridgeway, a mental health care provider in Maumelle, said many services are already provided at or below cost.
"It's really going to impair us if we tighten that even more," Miller said.
Metro on 10/21/2015