Governor’s Medicaid Reform Encountering Apprehension

Gov. Mike Beebe’s efforts to reform the state Medicaid system, which we reported on last week, is encountering initial apprehension from legislators and the medical provider community.

A number of stakeholders in the state’s health care system are privately expressing concern that they’ve not been consulted sooner and are unsure of how the Governor plans to proceed with the initiative.

Beebe was in Washington, D.C. last week to meet with Kathleen Sebelius, secretary for the Department of Health and Human Services (HHS). Beebe is seeking a waiver for the state’s Medicaid program to create a trial program moving Arkansas from a "fee-based" payment system to a more holistic approach to managing health care.

He has warned for months that by mid-2012 Arkansas’ Medicaid program will be about $87 million short in its funding.

On Monday, administration officials met with members of the medical and health care community to discuss Beebe’s proposed changes. For some, who chose not to speak on the record, it was their first introduction to the Governor’s more detailed plans.

Some legislators have also expressed concern that the state has advanced talks with the federal government in detail without their consultation or a briefing.

"This is a radical change, in my opinion, to the Medicaid system," said State Sen. Missy Irvin (R-Mountain View), whose husband is a family practice physician in north central Arkansas. "My biggest fear is that it will make doctors run away from accepting Medicaid patients and that’s already happening right now because of low reimbursement rates."

Irvin said she wants Beebe to include legislators and other health care stakeholders in a task force or other appropriate working group to have input on the overhaul.

"We’ve got to make sure that private providers are at the table and I think that the legislature needs to be at the table," she said.

Matt DeCample, spokesman for Gov. Beebe, said legislators and health care groups will be brought into the process as it progresses, but he held off providing a timetable for the effort.

"We’re going to include everybody in the process," DeCample said. "We know whatever we do is going to require federal involvement, so part of our timeline is going to be tied to how things progress with them."

The timeline is unlikely to be complete by the conclusion of the current legislative session. With a month or so to go, DeCample said that it would likely take much longer. However, state officials are expecting to have a waiver agreement with the feds by May 1, 2011.  And, the proposal shopped to HHS states that new pricing for some services could be published by May 1, 2012.

Beebe’s office provided Talk Business with a copy of the initial outline given to HHS which was shared at Monday’s stakeholder meeting. Dated February 11, 2011, it is titled "Transforming Arkansas Medicaid" and details the state’s attempt to structure a partnership between Medicaid, Medicare and private health insurers.

"The plan is bold," the white paper asserts. "It is not based on small-scale projects because such projects cannot yield broad-based cost and quality improvements in the near future."

It continues, "In conjunction with Medicare, Arkansas BlueCross and BlueShield, and private insurance plans, Arkansas Medicaid will design and then implement the nation’s first statewide payment-reform initiative. The initiative will pay partnerships of local providers to act as health homes."

Irvin expressed concerns regarding the terminology used in the letter such as "health homes" and other phrases. "I think these are some big concepts. ‘Medical homes.’ What is that? ‘Evidence-based reimbursement.’ What is that?" Irvin asked.

DeCample was unsure if changes to the system could be implemented by executive order, administrative rule or whether legislative action would be needed.

"I think its going to depend on what the final product looks like. We know at this stage we can proceed without getting any new legislation," he said. "Depending on what the final piece looks like, it may require some legislation. It’s too early to tell, but that’s definitely a possibility."

The waiver plan outlined to the feds would allow for Arkansas to create "medical-care partnerships" with at least one primary-care provider. Some medical practices and organizations might belong to more than one partnership.

A new statewide price system for Medicaid would be developed as early as May 1, 2012 for maternal and child health partnerships. Other medical-care partnerships would see pricing plans enacted in a staggered fashion starting in 2012 and being completed by 2014. Long-term care partnerships would have a new price system in place by the middle of 2013.

You can read the full document at this link.