Legislative leaders ask governor to limit session call to Arkansas Works, nix managed care for now

The leaders of the state House and Senate are asking Gov. Asa Hutchinson to focus the upcoming special session on Arkansas Works, which is his continuation of the private option, and omit a second bill that would create a managed care model for some Medicaid programs because it doesn’t have enough support.

In letters dated Monday, Senate President Pro Tempore Jonathan Dismang, R-Beebe, and Speaker of the House Jeremy Gillam, R-Judsonia, wrote Hutchinson that Arkansas Works can muster a majority in both chambers when the special session begins Wednesday, April 6. With a cost savings strategy like managed care, there’s no consensus, they wrote.

“We are committed to limiting the special session to three days,” Dismang wrote. “Given the close proximity to the April 13, 2016 Fiscal Session, I join Speaker Gillam in respectfully requesting that any legislation addressing (the managed care) strategy be omitted from the call. However, we do ask that if a consensus is reached between now and the start to the Special Session, that you amend the call to reflect that consensus.”

Hutchinson’s spokesman, J.R. Davis, said Monday afternoon, “The governor will take a look at the letter and consider leadership’s request and have an answer tomorrow.”

Gillam’s letter was similar to Dismang’s. He told Talk Business & Politics that the managed care issue would have to be addressed “down the road,” perhaps in a special session after the fiscal session.

“The challenge from my standpoint is that members still were requesting information and weren’t ready to make a decision late on Monday before the special session,” he said.

Hutchinson has said he would limit the call to two bills. One would be his program for continuing the private option, which he is calling Arkansas Works. The private option uses federal Medicaid dollars to purchase private insurance for adult Arkansas with incomes up to 138% of the federal poverty level.

The other is a managed care model where a private company would be paid a set fee per beneficiary to manage parts of the Medicaid program under contract with the Department of Human Services. In that model, the company could lose money if it fails to provide cost-efficient care.

Hutchinson said the model is needed in order to produce savings when the state would begin sharing in the cost of Arkansas Works – 10% by 2020. The legislation would limit managed care to the areas of behavioral health and for services for the developmentally disabled, excluding the state’s human development centers for more seriously disabled residents.

Both require majority support in the special session, but any programs that spend money will require a three-fourths majority in the fiscal session. While Dismang and Gillam wrote that Arkansas Works has majority support for the session, it is unclear if it will attain the three-fourths majority needed afterwards.

Legislators supporting DiamondCare, an alternative to Hutchinson’s managed care proposal, were finishing that bill Monday and were scheduled to release it Tuesday in a press conference.

Instead of a managed care model, DiamondCare would utilize administrative services organizations, which would manage those same areas for a fee but would not face as much risk as a managed care company. According to a study by The Stephen Group, a consultant hired by legislators, that model would save $1.057 billion over five years – less than the $1.4 billion managed care would save according to The Stephen Group’s projections. Hutchinson said last week that he would not allow the DiamondCare proposal to be considered.

A Health Reform Legislative Task Force split earlier this year when asked to vote on both models, with eight supporting managed care and seven voting for a concept similar to DiamondCare.

Sponsors of the DiamondCare bill are Rep. Michelle Gray, R-Melbourne; Sen. Linda Chesterfield, D-Little Rock; Sen. Missy Irvin, R-Mountain View; Sen. Keith Ingram, D-West Memphis; Sen. John Cooper, R-Jonesboro; Rep. Justin Boyd, R-Fort Smith; Rep. Deborah Ferguson, D-West Memphis; and Rep. Joe Farrer, R-Austin.

The DiamondCare supporters say their model could be implemented more quickly with less risk and with more of a focus on patient care.

Rep. Gray said they would continue to prepare the bill. “We’ll continue to push forward on the chance that the governor does not honor their request and goes ahead with the call,” she said.