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Medicaid work rule plan filed by state Department of Human Services

Proposed ARHOME change opposed by medical groups by Steve Goff | June 4, 2023 at 4:00 a.m.
Arkansas Gov. Sarah Huckabee Sanders (center) talks with state legislators after a news conference at the state Capitol in Little Rock in this Feb. 15, 2023 file photo. Sanders had just announced plans to seek federal approval to require ARHOME participants to work, volunteer or enroll in classes. Talking with Sanders are (clockwise from left) state Rep. Lee Johnson, R-Greenwood; Sen. Missy Irvin, R-Mountain View; Rep. Mary Bentley, R-Perryville; and Rep. Aaron Pilkington, R-Knoxville. (Arkansas Democrat-Gazette/Thomas Metthe)

Gov. Sarah Huckabee Sanders' administration has submitted to the federal government proposed changes to Arkansas' Medicaid expansion program that the Republican governor has described as "a fresh approach to engaging able-bodied adults [in the program] with a primary focus on those who are unemployed."

The state Department of Human Services on Thursday sent its proposed amendment to the waiver for the Medicaid program expansion, known as ARHOME, to the U.S. Department of Health and Human Services, state Department of Human Services spokesman Gavin Lesnick said Friday.

ARHOME is the acronym used for the Arkansas Health and Opportunity for Me program that provides health care coverage to low-income adult Arkansans. As of May, the program had 312,860 beneficiaries, Lesnick said.

The federal government covers 90% of the cost of the Medicaid expansion program, and the state covers the other 10%. Arkansas has operated its Medicaid expansion program under a waiver from the federal government since 2014.

The state's proposed changes in the Medicaid expansion program are aimed at implementing a plan that Sanders announced in February for the state Department of Human Services to seek federal approval to require beneficiaries in the program to work, volunteer or enroll in training or classes and for their coverage to revert to traditional Medicaid fee-for-service coverage if they failed to meet the requirement.

Some health care groups oppose these proposed changes to the state's Medicaid expansion program.

Sanders said in the Thursday letter to U.S. Department of Health and Human Services Secretary Xavier Becerra that the proposed Opportunities for Success amendment would build on the state's current ARHOME waiver approved by his administration. The state's ARHOME waiver runs until Dec. 31, 2026.

"The Opportunities for Success amendment will provide a Success Coach to those with income at or below 20 percent of the Federal Poverty Level," the governor wrote. "The Success Coach will screen individuals for their health-related social needs, connect them to local resources, and provide focused care coordination services.

"The coach will develop individualized action plans to assist individuals to get 'on track' and support individuals on their pathway to personal and family sustainability," Sanders said.

"We have eliminated the administrative hurdles encountered during the 2018-2019 work requirements experience," she said. "Individuals would not have to track time and do not have to report activities to demonstrate their effort. Individuals will not lose Medicaid eligibility."

The Opportunities for Success amendment is aligned with the goals of other approved Medicaid waivers designed to address individuals' health-related social needs and "builds on the efforts we have planned for the already approved LIFE360 HOME program," Sanders said.

"We look forward to working with you towards timely approval of this waiver amendment for a January 1, 2024, start date," she wrote in her letter to Becerra.

Success coaches also will be assigned to individuals who are "underemployed" and have been enrolled in a qualified health insurance plan for 24 months, and to individuals who have been employed and have been enrolled in a qualified health insurance plan for 36 months, Nell Smith, deputy director of the state Department of Human Services' Division of Medicaid Services, said during a public hearing in late April on the proposed amendment to the state's waiver for ARHOME.

Individuals who do not engage in their health care or the opportunities available to them within three months of success coach assignment will transition from coverage through a qualified health plan to the Medicaid fee-for-service system but will not lose Medicaid eligibility, Smith said.

The proposed Opportunities for Success Initiative targets an "employed" population between 81% and 138% of the federal poverty level, an "underemployed" population of between 21% and 80% of the federal poverty level, and an "unemployed" population of 20% or below of the federal poverty level, according to the proposal.

For an individual, the 2023 federal poverty level is $14,580, according to the department. For an individual, 21% of the federal poverty level is $3,061.80, 80% of the federal poverty level is $11,664, and 138% of the federal poverty level is $21,120.

In its proposal, the state Department of Human Services said in the aggregate "there is an estimated total reduction of approximately $60 million to the current budget neutrality limits over the five-year waiver period due to the changes in the amendment.

"While there will be increased expenditures related to the new focused care coordination services, these costs will be offset by savings generated as unengaged individuals from [qualified health plans] move to [fee-for-service] coverage and as individuals in [qualified health plans] move to employer sponsored insurance or individually purchased insurance on the Marketplace due to higher income," the department said.


In written public comments, the American Heart Association, American Lung Association and 10 other health care groups said in a May 23 letter to state Medicaid Director Janet Mann that "our organizations remain opposed to work requirements and time limits in all forms, as they are not in line with the goals of the Medicaid program."

"The ARHOME 1115 Amendment threatens the continuity of care for patients and places undue administrative burden on patients and the Medicaid program in Arkansas," according to the letter. In addition to the heart association and lung association, it was signed by the American Diabetes Association, Leukemia & Lymphoma Society, National Multiple Sclerosis Society, Hemophilia Federation of America, Epilepsy Foundation, Cystic Fibrosis Foundation, National Patient Advocate Foundation, CancerCare, AIDS Institute, and the National Organization for Rare Disorders.

The groups said the proposal sets up a tiered coverage structure in which patients have access to different coverage -- qualified health plans or fee-for-service Medicaid -- based on their income, length of time in the Medicaid program, and compliance with engagement activities, and these requirements "are not about promoting work, but adding red tape that jeopardizes patients' access to care.

"The vast majority of those with Medicaid who can work are already actively working; 91% of those in the Medicaid expansion group nationally are either workers, caregivers, students or unable to work due to illness," the health care groups said in their letter. "Additional bureaucratic processes to determine patient eligibility and participation in program requirements inherently create opportunities for administrative errors that jeopardize access to care."

Trevor Hawkins, an attorney for Legal Aid of Arkansas which represents low-income Arkansans in civil legal matters, said in a separate letter dated May 23 to Mann that the proposed waiver amendment "has nothing to do with providing healthcare.

"Rather it is the latest attempt to condition Medicaid coverage on fulfillment of so-called work requirements," he wrote.

"So doing, the amendment comes with a bloated infrastructure to monitor the lives of Medicaid beneficiaries, offers nothing of value, and threatens to disrupt healthcare of hundreds of thousands of Arkansans," Hawkins said. "Such a program runs counter to the goals of the Medicaid program. There is no justification for implementing it."

In its written response to the public comments about its proposal, the state Department of Human Service said that "this initiative is not a traditional 'work requirement.'"

"Further, the Opportunities for Success initiative does not impose a time limit on Medicaid coverage nor impact a beneficiary's underlying Medicaid eligibility," the department said.

Instead, "the Opportunities for Success initiative seeks to decrease poverty by supporting individuals in reaching their full potential and connecting them to available resources through the provision of focused care coordination services by the Success Coaches," according to the state Department of Human Services.

The department said concerns about the potential administrative burden associated with this initiative seemed to be derived primarily from concerns stemming from the state's prior implementation of a requirement tied to Medicaid eligibility that required monthly beneficiary reporting of engagement activities.

The state Department of Human Services said it heavily considered the lessons learned from its prior implementation of a work requirement in the design of the Opportunities for Success initiative.

"The program design seeks to simplify participation for both the beneficiary and DHS through enhanced data matching," and does not impose any new reporting responsibilities upon eligible beneficiaries to maintain coverage in a qualified health plan, according to the department.

In the department's proposal, a consulting actuary for the Milliman actuarial firm said the department estimates the Opportunities for Success initiative will require about 100 success coaches and 10 supervisors and that each success coach would cost roughly about $50,000 while each supervisor would cost roughly about $56,0000 using current salary and benefits scales. The department also has indicated an estimated cost of $11 million over a 3-year period for an information technology and resource platform to support the initiative, according to the actuary.

Lesnick has said existing state employees will serve as success coaches.

The state Department of Human Services said several people have expressed concerns that moving individuals from qualified health plans to fee-for-service would affect their continuity of care, but "this initiative will not impact individuals who are engaged in their healthcare through a [qualified health plan].

"The state has specified that individuals engaged with their [qualified health plan] receiving preventive services, or receiving treatment for a serious life-threatening disease such as substance abuse disorder, serious mental illness or cancer are not subject to the parameters of the Opportunities for Success initiative," the department said in its proposal in response to public comments.

Individuals who have a relationship with a provider and regularly receive preventive care or in active treatment with a provider are engaged in their own health care by definition and are not at risk of transitioning to fee-for-service coverage, the state Department of Human Services said.

The department defended its fee-for-services coverage, saying it "is not a substandard care option" to a qualified health plan.

Regarding concerns that fee for service coverage will provide a lower quality of care, the state Department of Human Services said fee-for-service is the current coverage model for more than two-thirds of beneficiaries on Arkansas Medicaid and Children's Health Insurance Program.

There are other benefits to being in a qualified health plan such as the incentives to participate in health improvement and economic independence activities, the state Department of Human Services said.

"However, the benefit of these enhanced functions of a [qualified health plan] is not realized if an individual is not taking an active role in their care. [Fee-for-service coverage] is a more appropriate option for such an individual so that they may still access care when they need it, but additional resources are not expended for unused enhanced benefits," the state Department of Human Services said.


As part of its proposed plan to the change the state's Medicaid expansion program, the Department of Human Services also wants to make two changes to Success Life360 HOMEs eligibility, according to Smith.

The proposed amendment to its ARHOME waiver would expand the Success Life360 HOMEs up to age 59 for beneficiaries to provide more comprehensive care coordination services and remove the "at risk of homelessness" limitation from the veteran eligibility criteria for Success Life360 HOMEs to better reflect the state's intent to allow any veteran in need to have access to intensive care coordination services, she said.

The Success Life360 HOMEs currently have three different age groups, including ages 19-24 for beneficiaries formerly incarcerated/formerly in Division of Youth Services custody; ages 19-27 for beneficiaries formerly in foster care; and ages 19-30 for veterans, according to Lesnick.

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