Hutchinson: one bill for Arkansas Works, one for managed care with bill of rights

Gov. Asa Hutchinson’s administration is introducing two separate pieces of legislation in the upcoming special session: one that will create his program for continuing the private option, which he is calling Arkansas Works, and one he is calling a “savings bill” that includes a managed care provision and a managed care “bill of rights.”

Hutchinson made the comments Tuesday speaking to a town hall meeting – his first as governor – at Central Baptist College in Conway.

Hutchinson is calling the Legislature into special session April 6 to consider the legislation, which requires only a majority vote for passage. That will be followed by the Legislature’s fiscal session, which begins April 13 and occurs every even-numbered year. There, legislators will vote to fund the program, which will require a three-fourths majority, a much higher bar.

Arkansas Works is Hutchinson’s version of the private option, the program passed by the Legislature in 2013 that uses federal Medicaid dollars to purchase private insurance for adult Arkansas with incomes up to 138% of the federal poverty level. It now is paying premiums for more than 200,000 Arkansans.

Managed care is a model where a private company would manage parts of the Medicaid program under contract with the Department of Human Services, with incentives for cost-efficient care and penalties for failing to reach targets. Hutchinson said the model is needed in order to produce savings when the state begins sharing in the program’s cost – 10% by 2020.

The savings legislation will limit managed care to the areas of behavioral health and services for the developmentally disabled, excluding the state’s human development centers for more seriously disabled residents. The bill of rights will be based on a model enacted by North Carolina. Hutchinson said it will ensure that provider payments will not be reduced below an agreed upon rate schedule for Medicaid without the providers’ consent. He said the bill of rights will provide for advisory groups to influence policy and will have transparency provisions and reporting requirements.

“It should give a lot of confidence that we’re not going to be reducing provider rates,” he told reporters afterwards. “[T]he objective is to improve care, save costs in that fashion. The legislation, whenever it comes out, you’ll see, it’s really, I think limiting the managed care to certain populations.”

He said the savings bill will include a trust fund meant to reduce a backlog of Arkansans with developmental disabilities who are awaiting care.

Hutchinson said both pieces of legislation will be released in the next couple of days.

Hutchinson defended Arkansas Works by saying it encourages more personal responsibility. Arkansans with access to employer-based insurance will be required to use that insurance rather than relying on Arkansas Works coverage. Arkansans with incomes of at least 100% of the federal poverty level must pay up to 2% of their income for monthly premiums. Arkansans receiving benefits will be referred to the Department of Workforce Services for possible job training. Finally, a current provision that covers individuals 90 days prior to enrollment will be ended. If Arkansas Works is enacted, coverage begins at enrollment.

Hutchinson said social programs should be a safety net to help the vulnerable and should offer incentives for work.

He said that failing to continue the private option in the form of Arkansas Works “creates turmoil in the Arkansas health care marketplace” and would create a hole in Arkansas’ state budget. He said if a Democrat is elected president next year, more states will join the 31 that already participate in the Medicaid expansion, and Arkansas will be forced to rethink its decision not to participate. If a Republican is elected president, the new administration could enact reforms like block grants that Arkansas would like, and then the state’s funding would be based on its previous year’s lesser amount.