Arkansas Medicaid Growth Rate Beating National Average

Arkansas’ annual 2.2% growth in Medicaid spending from 2010-13 places it below the U.S. average of about 4% and in the middle of adjacent states – well below Oklahoma’s more than 5% increase but more than Tennessee and Louisiana, whose increases were below 1%.

That was one of the findings of a report provided to members of the Health Reform Legislative Task Force Wednesday by The Stephen Group, a consultant hired to help the task force consider overall health care reform. The task force was created by legislation as part of a compromise that funded the Medicaid private option through 2015. The private option purchases private insurance for lower-income residents using Medicaid dollars.

Using data provided by the Kaiser Family Foundation, John Stephen, managing partner of The Stephen Group, told legislators that six states achieved less than 0% growth, including Arizona, whose spending dropped 3.5%. Low-cost states like Arizona and New Hampshire were marked by better quality and coordination, not just cuts, he said.

The Stephen Group is working to determine which Medicaid recipients actually are eligible for benefits. According to a slide presented by Stephen, problems identified include multiple Medicaid identification numbers given to the same person and different eligibility and termination dates.

Through the private option program, recipients are divided into two groups – those who receive insurance through private carriers, and a “medically frail” group of about 25,000 who are steered into traditional Medicaid. Stephen said the cost for each of those medically frail recipients is $664.72 per month. Costs for private option recipients are around $485 per month, the Department of Human Services announced July 2.

Stephen said that of the top 1,000 most expensive Medicaid patients in Arkansas, 990 are in the traditional Medicaid program while 10 are in the medically frail expansion population. The average cost of the high utilizers in the Medicaid category was $322,742. The average cost of the medically frail recipients was $55,081. The highest 100 included many hemophiliacs, newborns in the intensive care unit and patients with a congenital condition. Many in the top 1,000 suffered from a severe mental illness. Of the $132 million spent on inpatient care for this population, $110 million was spent at Arkansas Children’s Hospital.

A survey answered by 254 medical providers found mixed support for the Arkansas Payment Improvement Initiative’s “episodes of care” model, where teams of providers are financially rewarded or punished if they provide care cost-efficiently for certain conditions. Providers are seeing more insured individuals and providing less uncompensated care. The report found the model has been producing measurable results, with annual savings between $9.66 million and $28.2 million.

The Stephen Group found Arkansas lagging behind when it comes to providing case management for behavioral health issues and for long-term care. Nursing home nurses determine whether a patient should be eligible to enter a nursing home, and the rule they are given does not mention community-based care as being a priority.

Momentum has slowed when it comes to private option recipients taking advantage of its Health Independence Account feature, where beneficiaries can save money for use for their medical needs when they leave the program. Of the 45,839 cards issued as part of the program, 10,806 have been activated, with transactions steady at about 4,000 transactions per month. Four thousand cards have been returned since the beginning of the year due to bad addresses.