New Arkansas Medicaid chief quizzed

Arkansas’ new Medicaid chief, Dr. Andy Allison, received a warm and lengthy welcome from a legislative committee on his first week on the job, fielding questions regarding his philosophy and experience in reforming Medicaid.

Allison was hired in November to replace Gene Gessow, who resigned to take another job out of state.

The legislative Hospital and Medicaid Study Subcommittee quizzed Allison on the state’s efforts to overhaul its Medicaid program, a major policy debate expected to dominate the upcoming fiscal session in February 2012.

Gov. Mike Beebe (D) and state public health leaders have warned that Arkansas could face an $87 million Medicaid shortfall starting in July 2012. Beebe’s administration has embarked on a year-long study to move the Medicaid program from a “fee-for-service” model to one that “bundles payments” to medical providers.

Allison, who left a similar post in Kansas for the Arkansas job, said he knows Medicaid in the state and nationwide is “on an unsustainable path.”

Noting that no state has successfully solved its Medicaid cost crisis, Allison said that the wracked economy has forced states to take bold reform actions.

“We’re operating in a fiscal environment that no one has ever operated in,” he said. “We have a new fiscal reality that presents challenges and something has to change.”

Allison said he has not fully immersed himself in the state’s reform efforts, but is spending his first weeks getting up to speed. However, he did offer some initial observations.

“I’m looking for pragmatism. I think the plans go far enough to make a difference, but I don’t think they go all the way,” Allison said. “I am encouraged, it’s the right exercise.”

Several lawmakers asked questions regarding a range of subjects:
• Other first impressions on the state’s Medicaid reform efforts:  “I wouldn’t want to draw any snap judgements on the program. … I deeply admire the effort and look forward to becoming engaged to bend the cost curve,” he said. “We have to walk down a path with the health care community and the providers and stakeholders in the program to recreate Medicaid as a sustainable program. It’s going to be a challenge and it won’t be easy and it will require change.”

• On Medicaid fraud: “The broad category of waste and fraud as well as abuse is a concern and the issue is preventing it,” said Allison, who suggested that prevention of fraud was a more efficient approach than catching fraud on the back-end. “I’m not aware of any state that can tell you how much fraud there is,” he said. “We should do our best to try to create mechanisms that try to prevent fraud.”

• On patients partially paying for Medicaid services: Allison warned that federal rules restrict Medicaid recipients’ from having to pay small amounts for services: “I think there is a very real value in patient engagement and there is a number of ways to engage patients,” he said. “The great challenge, under current rules is the population that we cover is poor to begin with and most of them don’t have the money to pay for the program. … I’m open to ways around that.”

In other news, Arkansas Department of Human Services Director John Selig said that Arkansas is expecting to apply for a federal grant in the near future to help pay for some costs related to Medicaid reform.