Health task force deadlocks on Arkansas managed care proposal

A divided Health Reform Legislative Task Force on Monday (March 7) could not agree on whether to endorse a managed care model or a “managed fee for service” model for some Arkansas Medicaid services. The vote was eight for managed care, seven for managed fee for service, and one abstaining.

Gov. Asa Hutchinson (R) favors a managed care model for Arkansas Medicaid’s behavioral health and developmental disabilities services, except with long-term care services such as skilled nursing facilities.

In a managed care model, a private company administers the program under state contract, with the company increasing its profits for cost-efficient care while facing the risk of losing money if inefficient. The task force’s consultant, The Stephen Group, said the model would save the state $1.4 billion from fiscal year 2017 to fiscal year 2021.

Opponents, many of them Republicans with professional experiences in the medical field in private life, have expressed concerns that a managed care model will leave the state in the hands of a private company seeking profits at the expense of care. Those legislators presented a plan, DiamondCare, that was based on a managed fee for service model for all long-term care. Managed fee for service also involves an outside company, but the risks are mostly borne by the state. The Stephen Group said that model would save the state $1.1 billion from 2017-21.

Sen. Jim Hendren, R-Gravette, the task force’s chairman, said it won’t make a recommendation as to one or the other and won’t be voting again.

“I think one of them is going to pass, and to me, when it’s as divided as it is here, there’s not a lot to be gained from us continuing to fight it out since we’ve got a special session coming up in a month anyway,” he said.

The task force was formed by legislation in 2015 at Hutchinson’s urging to consider alternatives to the private option, the program that uses federal Medicaid dollars to purchase private health insurance for adults with incomes up to 138% of the federal poverty level. Earlier Monday, the task force endorsed Hutchinson’s alternative, “Arkansas Works.”

While the private option was the inspiration for the task force’s creation, managed care became the more controversial issue.

The task force’s next meeting is March 29, when members can again vote on more recommendations before the full Legislature meets in a health care-based special session starting April 6. That session will be followed by a regular fiscal session where any programs that spend money require a three-fourths majority.

Voting for the managed care model were eight members: Hendren; Sen. Jason Rapert, R-Conway; Sen. Jonathan Dismang, R-Beebe; Sen. David Sanders, R-Little Rock; Rep. Kim Hammer, R-Benton; Rep. David Meeks, R-Conway; Rep. Charlie Collins, R-Fayetteville; and Sen. Cecille Bledsoe, R-Rogers.

Voting for the DiamondCare proposal were seven members: Sen. Linda Chesterfield, D-Little Rock; Sen. Keith Ingram, D-West Memphis; Sen. John Cooper, R-Jonesboro; Rep. Joe Farrer, R-Austin; Rep. Justin Boyd, R-Fort Smith; Rep. Deborah Ferguson, D-West Memphis; and Rep. Michelle Gray, D-Melbourne.

Rep. Reginald Murdock, D-Marianna, abstained.

In a prepared statement and in comments to reporters afterwards, Ingram criticized what he said was excessive involvement by the governor’s office in support of managed care.

“I am concerned about maybe the creeping encroachment of the executive branch into something that is truly a legislative matter,” he said. “When this legislation for this task force was created, it didn’t say a word about the executive branch being involved in this. I would have liked to have this committee had been free of any interference from the executive branch in order to come out with a true recommendation, and once we did that, I felt like we would have met our obligation, and then the governor was good to do with it what he chose.”

Legislators agreed to ask the Bureau of Legislative Research to draw up legislation that could apply to the managed care or managed fee for service model. That legislation will be considered by the task force March 29. Among the proposed bills would be one that would that would require managed care organizations to spend a certain percentage of premiums on claims. Another would require an annual rate review of Medicaid providers.