Beebe Pushing For Next Steps In Medicaid Reform

In a letter dated August 10, 2011 and obtained today by Talk Business, Gov. Mike Beebe asks U.S. Health and Human Services Secretary Kathleen Sebelius to meet with him regarding an update to "Arkansas’s payment-reform initiative" and "to ensure that our work furthers your national improvement efforts."

"As you know, the Arkansas Health Care Payment Improvement Initiative is moving the health-care financing system from a fee-for-service model to an episode-based, bundled-payment stategy, aligning payment incentives for delivery of high quality, coordinated care and active management of existing conditions, while retaining the actuarial risk of new conditions with Medicaid/private-insurance carriers. The strategy is intended to move the entire Arkansas delivery system to a new and sustainable model of health-care financing and to stimulate needed system reform," writes Beebe in his letter.

Beebe highlights changes made from the initial purpose based on the discussions they have had with stakeholders. Specifically, he highlights several areas that he believes will be the best candidates from moving from fee-for-services to episodic payments including the following: pregnancy and neonatal care, attention deficit hyperacitivity disorder, type 2 diabetes, back pain, cardiovascular disease, upper respiratory infections, developmental disabilities, long-term care, and prevention.

Beebe indicates that Arkansas’ program is the "only statewide payment-reform effort involving all major public-and-private payers."  Some of the initial funding for the project has come from BlueCross and BlueShield, which has brought in McKinsey and Company to advise on implementation of the project.

"Rather than make the deep program cuts seen in other states, our goal is to align payment incentives to eliminate inefficiencies and improve coordination and effectiveness of care delivery," concludes Beebe. "We will do this, in large part, by moving away from a fragmented, volume-driven, fee-for-service system to one that pays teams of providers for episodes or bundles of care."

Still, some key questions remain on what appears to be a massive change in the state Medicaid and health care insurance system. 

In an intiative that appears to be supported largely by the state and insurance companies (the payers), how much input do the health care providers have (the payees)? 

Is the program largely within the control of Gov. Beebe and the executive branch or does the state legislature have oversight?

And perhaps the question many everyday Arkansans wonder: how does the change play into the massive federal overhaul of the health care system through the implementation of ObamaCare?

You can read the full letter here.