Gov. Hutchinson orders second try on Private Option verification process

The backlog of cases verifying the incomes of Medicaid and private option recipients has been eliminated, and the Department of Human Services again will begin sending out notices to private option recipients deemed ineligible because of changes in income or because they did not respond to a request to verify their income.

However, two of the three private insurance companies covering private option beneficiaries, Blue Cross and Ambetter, have reached an agreement with DHS to continue to cover prescription costs in terminated cases for 30 days. Those two companies cover a large majority of private option recipients. The state’s other carrier, Qualchoice, is not part of that agreement.

Those were two of the takeaways from a letter sent by Gov. Asa Hutchinson to legislators, and from a Tuesday (Aug. 18) Hutchinson press conference.

The state by the end of September will have finished redetermining eligibility for about 600,000 Medicaid and private option cases where recipients have been on the program for at least a year without an income verification. So far, 391,216 renewals have been initiated in cases involving individuals or more than one person. DHS is awaiting responses on 271,896 cases, DHS Communications Director Amy Webb said.

So far, almost 48,987 recipients have received notices of termination or have been terminated. However, 2,077 of those have been reinstated, leaving a total of 46,910.
Recipients whose incomes appear to have changed are sent a letter saying they must verify their incomes within 10 days. That begins a process where nonrespondents’ benefits are terminated, with the ability to be reinstated within 90 days with all charges covered retroactively.

Hutchinson called a two-week timeout two weeks ago on sending out the verification notices when the backlog became more than DHS could handle. Today, he authorized DHS to reinstitute the verification process. Hutchinson said in the letter and in the press conference that the 10-day window was a standard that had been set by previous administrations and that a significant percentage of respondents will not respond even if given more time. He said lengthening the window would increase the amount of time ineligible people are participating in the program, potentially increasing its costs by millions of dollars.

“If somebody is not going to respond to a request from DHS for information, they’re not going to respond in 10 days or 30 days,” he said. “And so 10 days invigorates the process earlier, and that is important ultimately to reach the right determination.”

The agreement with Blue Cross and Ambetter does not affect traditional Medicaid recipients who do not respond to the request for information in time. DHS Director John Selig said the verification process has been expedited for high-need individuals.

According to Hutchinson and DHS Director John Selig, 300 DHS staff members have worked 2,200 overtime hours to address the workload, and 35 vacant positions are being filled. An agreement is being finalized with the Department of Workforce Services to use more than 100 Temporary Assistance for Needy Families recipients for part-time administrative work. Staff has been added and reassigned, while the envelope sent to beneficiaries now includes a DHS logo with the words, “Important information about your benefits!” written in red ink in all caps. The previous envelope did not include that warning. Selig said the language of the letter now more clearly states that the recipient is in danger of losing insurance.

Hutchinson on Wednesday will address the Health Reform Legislative Task Force, the group of legislators who are considering what to do with the private option in the context of overall health care reform. He said he was not prepared to respond to a report by The Stephen Group, a consulting firm hired by the task force, that showed the private option will have a cumulative positive impact of $438 million in Arkansas through 2021.