Rules that reduce coverage for past medical expenses incurred by Arkansas Works enrollees cleared a legislative panel on Monday.
Currently, Medicaid will pay for up to 90 days of medical expenses incurred before an enrollee applied for coverage in the state's expanded program.
Under the rule reviewed by the state House and Senate public health committees on Monday, the program will only pay for 30 days of past medical expenses for Arkansas Works enrollees starting May 1.
According to the state Department of Human Services, the change is expected to reduce Medicaid spending by $20.8 million in the fiscal year that starts July 1.
Most of the savings -- $19.5 million -- will go to the federal government, which is covering the bulk of the cost of coverage for people who became eligible for Medicaid under the program expansion that took effect in 2014.
Arkansas is paying 6 percent of the cost this year and 7 percent next year. The state's share will increase to 10 percent in 2020.
Rep. Deborah Ferguson, D-West Memphis, suggested that the cost savings would adversely affect hospitals and other medical providers.
"We're saving 1.3 [million dollars], but in order to save 1.3 [million dollars], we're actually costing the state 20 million [dollars] in federal funds that would go to hospitals and providers, is that right?" Ferguson asked.
Bo Ryall, chief executive of the Arkansas Hospital Association, said the 30-day period is an improvement over the reduction the state initially proposed -- the first day of the month an application is received -- but it will still leave hospitals with more unpaid bills.
"I think there will be some cases where they're not able to get all the information in on time, and others they will be," he said.
Rep. Robin Lundstrum, R-Springdale, noted that private insurance policies don't provide retroactive coverage.
"We're being extremely generous with the taxpayer's money even having the 30 days," she said.
Kelley Linck, the Human Services Department's chief of legislative and governmental affairs, said President Donald Trump's administration is "asking most of us with retroactive coverage to try to get that down to 30 days."
"Ninety days is a long time for retroactive coverage," he said.
After the meeting, he clarified: "I woudn't say [federal officials] requested it, but I will say they are very open to not having 90 days."
The impact will likely be less than $20 million because officials expect uninsured patients to enroll more quickly after they have medical expenses to meet the 30-day deadline, he said.
The reduction was one of several changes the federal government approved last month to the waiver authorizing Arkansas Works, as the state's Medicaid expansion program is known.
Under another change, the state will begin imposing a work requirement on many Arkansas Works enrollees starting June 1. The requirement will apply to enrollees age 30-49 this year and younger enrollees starting next year.
On Monday, the state began sending notices to the 100,000 enrollees in the older group with instructions on using a state website to report their work activities or exemptions from the requirement.
The Arkansas Works waiver allows the state to cover most people who became eligible for Medicaid under the expansion to receive the coverage through private plans offered on the state's health insurance exchange, with the Medicaid program paying most or all of the premium.
Previously, eligibility was restricted largely to poor people who are elderly or disabled, children from low-income families and parents with incomes of 17 percent of the poverty level. The Medicaid program will continue to pay up to 90 days of past medical bills for people who qualify under those older eligibility categories.
For Arkansas Works enrollees, the state initially sought to reduce retroactive coverage, which is provided through the fee-for-service Medicaid program rather than the private plans, to the first day of the month when an application is submitted.
Linck said that request was modified in response to concerns that it would increase the unreimbursed care provided by hospitals. Department of Correction officials also worried that it would increase the cost to the state of providing medical care to inmates.
That's because Arkansas Works pays the medical bills for eligible inmates when they are hospitalized for at least 24 hours.
Correction Department spokesman Solomon Graves said his agency doesn't object to the current proposal.
With no members objecting, Rep. Jeff Wardlaw, R-Hermitage, chairman of the House committee, declared the rules "reviewed."
They will next go to the Legislative Council's Administrative Rules and Regulations Subcommittee and the full Legislative Council for final approval later this month.
A Section on 04/03/2018