After months of testimony and consultant reports, Arkansas legislators are poised to begin voting Wednesday on difficult health care reform questions, including whether the state should adopt a hybrid Medicaid managed care model, and what kind of replacement, if any, the state should create for the private option.
The Health Reform Legislative Task Force has been considering changes to the state’s Medicaid and private option programs and is required to issue its first report by the end of the month.
The task force was formed by legislation this year to resolve disagreements over the private option, the program created in 2013 that uses federal Medicaid dollars through the Affordable Care Act to purchase private health insurance for Arkansans with incomes between 17-138% of the federal poverty level. The program has helped reduce the number of uninsured Arkansans, but critics say it is a costly expansion of Obamacare that the state will not be able to afford when it starts picking up part of the costs in 2017.
Asked by Sen. Linda Chesterfield, D-Little Rock, about the process for voting on the proposals that have been presented, the task force’s co-chair, Sen. Jim Hendren, R-Sulphur Springs, said any member can make any motion but ideally the task force will provide general direction to Gov. Asa Hutchinson as he seeks a waiver from the federal government on the private option. He said the group should not get bogged down in details so that nothing is accomplished. The task force will exist for another year, and the entire General Assembly will vote on major changes.
“We have to agree on a general direction so that we can continue to work,” Hendren told reporters afterwards. “I think there’s more agreement on a general direction than it might appear.”
Asked by Rep. Reginald Murdock, D-Marianna, about what kind of consensus will be required Wednesday, Hendren said a majority vote would suffice under the task force’s rules.
Hutchinson will address the task force Wednesday. He has touted a replacement for the private option he is calling “Arkansas Works” that requires more financial participation and personal responsibility from current private option beneficiaries. Any changes would require a waiver from the federal government. Hendren said the task force is giving the governor a chance to learn what the federal government will accept so that more details can be considered in 2016.
While the private option was the inspiration for the task force, it no longer is the most contentious issue. Legislators are spending more time discussing whether the state should adopt a managed care model or instead expand its current patient-centered medical home model. Under managed care, the state would contract with a private company to manage part of the Medicaid program and be responsible if costs are higher than expected. Under the patient-centered medical home concept, a primary care physician coordinates care to promote effectiveness and efficiency.
Hendren said afterwards that it’s not surprising that the debate has shifted from the private option to managed care. Most of the dollars are in the traditional Medicaid program. The fight over the Medicaid expansion – either the private option or Arkansas Works – will come after policymakers learn what the federal government will allow, he said.
“I think anybody, even if you’re opposed to Medicaid expansion, why would you say we’re not going to at least go ask what we can get?” he said. “I mean, who knows? Maybe they’ll give us the entire thing as a block grant, and any conservative would salivate at the opportunity to have a billion dollar block grant coming into the state of Arkansas.”
The task force’s consultant, The Stephen Group, offered both managed care and the patient-centered medical home as ways to save on costs when it issued its report in October. On Tuesday, lead consultant John Stephen said that 41 states are using some form of managed care and that it offers greater savings.
Meanwhile, five legislators proposed a patient-centered medical home model they are calling “DiamondCare” that is similar to the model proposed by The Stephen Group. The five legislators – Rep. Michelle Gray, R-Melbourne; Sen. Missy Irvin, R-Mountain View; Rep. Joe Farrer, R-Austin; Rep. Justin Boyd, R-Fort Smith; and Rep. Deborah Ferguson, D-West Memphis – all have a professional connection to the health care industry and say their experience has led them to believe that the managed care model won’t work in Arkansas. The five say that managed care companies will siphon too many tax dollars for their own profits at the expense of patient care. They say that other states that have tried the managed care model have had problems and have not seen the savings that were expected.
Instead of a managed care company, DiamondCare would incorporate the use of an administrative services organization, which would offer management services without facing a risk of a loss of profits. The legislators have talked to the Arkansas Foundation for Medical Care about providing some of those services.
Earlier this year, Gov. Hutchinson offered his ideas for Medicaid reform. Gray told legislators that DiamondCare took his recommendations into account for the overall Medicaid program, but it does not address the private option or Arkansas Works.
DiamondCare would use the managed care model for reimbursements for dentists. Ferguson, herself a former dentist, said the dental community would prefer that model because its members have had bad experiences with the Department of Human Services.
Asked afterwards if she felt heard Tuesday, Gray said, “I did feel very heard. I’m disappointed in the fact that I feel our chairs are trying to tell us how to legislate. Aside from that, I did feel heard.”
Gray said Arkansas Works and DiamondCare had been separated at Hutchinson’s request. She said she had been told he would like to start negotiations with the federal government regarding Arkansas Works and that the managed care discussion would come later. But she said she’s ready to make a decision on managed care now.
“We’re all ready,” she said. “I believe a majority of the task force is ready to make that decision tomorrow. … He does know that for me, managed care is a line in the sand that I will not cross, not just for my district but for all 3 million people in the state of Arkansas.”