Plan would reduce waiting list for services for developmental disabilities (Updated)

Editor’s note: This story has been updated throughout to reflect the detailed proposal from Gov. Asa Hutchinson.
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Gov. Asa Hutchinson said Wednesday (March 30) that his bill to create a partial managed care system would cut the waiting list of Arkansans waiting for developmental disabilities services in half within the next three years.

Hutchinson made the announcement while speaking to his Medicaid Advisory Council at the Capitol.

Legislators will gather April 6 in a special session devoted to health care, followed by a fiscal session that begins April 13. Hutchinson has limited the session call to two topics. One is Arkansas Works, Hutchinson’s successor to the private option, the program that uses Medicaid dollars to purchase private health insurance for Arkansans with incomes above 138% of the federal poverty level.

Hutchinson also is supporting a second bill, the Arkansas Medicaid Reform Act of 2016, which would create a managed care system in Medicaid for individuals with developmental disabilities and those receiving behavioral health services. In that model, a private company or companies would manage parts of the Medicaid program under contract with the Department of Human Services, receiving a set amount per member. The vendor would make higher profits for cost-efficient care while bearing the financial burden if it fails to meet targets.

Hutchinson said half of the proceeds from an existing premium tax would be placed into a trust fund that would reduce the number of Arkansans with more serious developmental disabilities who are waiting for services. The tax would raise $50 million when fully formed by 2018. Half of that, or $25 million, would go to the trust fund and be matched by federal funds.

Hutchinson said an alternative proposal pushed by some legislators known as Diamond Care would not produce that revenue.

The programs last year served 4,127 Arkansans with developmental disabilities who could otherwise be institutionalized, legislators were told Tuesday by The Stephen Group, a consulting firm. Because of a lack of funds, another 2,640 were on a waiting list. Of that number, 125 have been on the waiting list since 2007, Hutchinson said. Covering them would cost $6.5 million, about $2 million of that being the state’s share.

Hutchinson said his goal was to cut the waiting list of 2,640 in half within three years. He said he would work with the developmentally disabled community, and that the state would need flexibility from the federal government and a tiered level of service.

Hutchinson’s office had announced Tuesday that only his two bills will be included in the session call. He reiterated his commitment to such a limit, saying the Arkansas Works and managed care bills “are linked together inextricably, and they fit together like a puzzle.” He said savings from managed care would prevent the state from “taking more and more” from education and public safety.

Hutchinson read aloud from a press report detailing the news that Oklahoma’s Medicaid agency had proposed cutting payments to 46,000 medical providers by 25%. Arkansas could face a similar fate if legislators do not approve his Arkansas Works program, he said. The private option ends by law Dec. 31.

“If we do not take action in a uniform fashion in this state, then we will put our health care system in turmoil and will not have a plan for the future, and we could have a plan that mirrors what we’re seeing in Oklahoma today,” he said.