Arkansas Officials Scale Back Medicaid Overhaul Plan

July 15th, 2011 | by Matew Dow |

LITTLE ROCK – Arkansas officials said Thursday they’ve scaled back plans to overhaul the state’s Medicaid system, focusing on changing the payment system for select areas rather than the system as a whole by next July.

Facing complaints from lawmakers that they’ve been given little information on how the state wants to change the Medicaid system, Department of Human Services Director John Selig also promised to detail the plans in the coming weeks. Selig, however, cautioned that the changes won’t eliminate a projected shortfall of at least $60 million that Arkansas’ Medicaid program faces in the budget that begins July 1, 2012.

“We’re still going to need new money. None of these programs can change quickly,” Selig told lawmakers at a Senate Public Health, Welfare and Labor Committee meeting. “We want to be able to come to you in six months and you can see that we’re asking for support not just for the same old Medicaid program but for a program that you can see is headed toward significant changes, toward a program that really can be sustainable in the future.”

The state in May was given initial approval to move forward with the plans to move from a fee-for-service model that Medicaid uses for reimbursing providers to instead pay partnerships of local providers for “episodes” of care rather than each individual treatment.

Selig said that in mid-May, officials decided to scale back plans to move toward the partnership model throughout Medicaid and instead hope to use it for selected, high-priority areas. Selig said officials are still determining what would be included in the plan, but said they could include areas such as diabetes, mental health and developmental disabilities.

Selig said the changes are needed to avoid cuts in services that other states have had to make to Medicaid.

“We feel some urgency, but on the other hand if we move too quickly we don’t do it well,” Selig told reporters after the hearing. “This is really the kind of compromise where we’re still talking about changing the entire system, but we’re really going to do it in some significant pieces at a time to make sure we do those pieces well. That’s part of the refinement of the concept.”

Medicaid is expected to be the top item facing lawmakers next year when they return for a legislative session focusing primarily on the state’s budget. Gov. Mike Beebe has said he wants lawmakers to use part of a $94 million budget surplus to help pay for the expected Medicaid shortfall, but some Republicans have said the money is proof the state can afford more tax cuts.

Lawmakers from both parties vented frustration to Selig and state Surgeon General Joe Thompson about the lack of details surrounding the Medicaid reform proposal, and said they want more answers on how the partnerships would be set up and payments would be made to multiple providers in the new system.

Sen. Percy Malone, the panel’s chairman, said state officials need to offer their plan in greater detail or else face the wrath of health care providers.

“I think it’s time you guys come up with something. Throw something out, because if you wait until the very end the whole health care system will say ‘to hell with you, we’re not going to participate in that kind of thing.’…The pertinent question is, what is the model that you’re proposing?” said Malone, D-Arkadelphia.

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