John Burris: Critical Review Set For Possible Arkansas Medicaid Management

Editor’s note: This essay deals with managed health care services in Arkansas. The firm that employs essay author John Burris represents an insurance company that also provides managed care services.

The much anticipated Stephen Group report will be made public this week. Legislators have a chance to review the contents beginning Oct. 5, but only in a secured location and without being given a personal copy of the report. A presentation to the full Health Reform Task Force is scheduled for Oct. 7.

What will consultant John Stephen and his associate Richard Kellogg tell the task force? There’s only speculation at this point, but plan management, program integrity, and healthcare coverage are the general areas that should receive the most attention.

Any analysis – including this column – of the report before Oct. 7 is only speculation with shades of bias, so it’s best to reserve any major conclusions until Stephen and Kellogg explain their work in full. It should be a conclusive report, since by all accounts the two have invested far beyond the hours of research, travel, and study demanded by their contract.

Leading up to the release, it seems provider groups are most worried about the suggestion of a privately managed Medicaid program. There, the state would contract with competitively selected companies to coordinate the care of enrollees at a capped rate, similar to an insurance premium. That would be a departure from the current fee-for-service model, where the state pays for claims as they’re incurred and facilitates the interaction with enrollees.

Supporters of managed care say it injects private sector management and budget predictability into an inefficient government-run system by effectively communicating with the consumer and better coordinating care. Opponents say managed care establishes spending limits that hurts providers and consumers and that it profits the companies with dollars that should instead be spent directly on care.

The Department of Human Services, at the direction of Gov. Asa Hutchinson, has already released a Request for Information (RFI) on managed care implementation for three high-cost programs in Medicaid. If the Stephen Group recommends something less aggressive than the Governor’s RFI, it could leave legislators in a difficult position of choosing between their Governor and their consultant. But if the report recommends a more aggressive managed care approach, meaning even more populations than the RFI includes, it could make the Governor’s approach more acceptable to the provider groups who aren’t included.

The Stephen Group report will likely influence how legislators and provider groups view the Governor’s RFI, making it seem too broad or not broad enough.

Program integrity will be another focus. That’s easy to predict, since John Stephen made it a major part of his presentation when pitching for the consultant job. Then, he talked about strengthening screenings on asset and other eligibility criteria. Those are all good things and should be done. Hopefully, he will emphasize the many ways we may strengthen our enrollment platforms. It should be easier on the consumer and more efficient for the state. There are material savings that can be realized.

Stephen will also have to give a recommendation on continuing healthcare coverage for those below 138% of the Federal Poverty Line (FPL). Arkansas now relies on a Section 1115 waiver that uses Medicaid funds to offer premium assistance for purchasing private health insurance policies for eligible enrollees. It’s called the “Private Option.” The debate over the program has been intense and political.

He has already released his own actuarial study that concluded a $438 million savings to the state budget as a result of the program. There are other factors to consider, as well as further reforms that can be made.

When you boil it all down, though, there are simply three options for offering coverage:
• Premium assistance for private insurance,
• Medicaid as the single-payer, or
• Nothing.

These are the only foundations from which to build a coverage model. One is conservative. One is liberal. One is conservative in theory, but not in practice.

I hope Stephen recommends the conservative approach. Most of us will find out on Oct. 7 when the task force meets to discuss the report.

In the meantime, task force members will begin reviewing the body of work, so word of the content should start spreading almost before the door of the secured location shuts behind the first visiting legislator. That will create a fun two days of speculation, despite the best intentions of most involved.

Hopefully, the report will help guide all those involved and help make the right decisions for healthcare policy for our state.

It’s too important to get wrong.