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Sunday, December 30, 2012

Republican lawmakers doubt DHS projections, still don’t have specific suggestions for cuts

Posted By on Sun, Dec 30, 2012 at 1:26 PM

Rep. Bruce Westerman
  • Rep. Bruce Westerman

Rep. Bruce Westerman
  • Rep. Bruce Westerman

Republican lawmakers still don't believe that harsh cuts to Level 3 nursing care are necessary and they're still resistant to expanding Medicaid, which projects to ease the fiscal crunch enough to save the nursing care. What's their alternative? We're still waiting.

Given the Republicans' public complaints on these issues before the holidays, I thought I should follow up with House Majority Leader Bruce Westerman (R-Hot Springs), who told me a month ago that he was doing research on alternatives to plugging the hole in the state Medicaid budget but wasn’t ready to speak about them.

Westerman said he was “still working on it” — but no specifics. He reiterated that he does not believe cuts to Level 3 nursing care will come to pass.

Senate President Michael Lamoureux (R-Russellville) agrees. “No one that I know took that to be a serious proposal,” Lamoureux said. “I haven’t found anybody that thinks that’s what we’re going to do in Arkansas and that they really are proposing that. I don’t think anybody’s notified next of kin saying, ‘get ready.’”

Lamoureux thinks it’s an effort to apply political pressure on legislators to opt for Medicaid expansion, which Medicaid director Andy Allison, Gov. Mike Beebe and other state officials have said would provide savings that could be used to save the nursing care.

“I think it’s a little bit of a typical threatening tactic,” Lamoureux said. “You know, ‘if we don’t get our way we’re going to cause a lot of harm.’”

Lamoureux said that Republican lawmakers are hunting for other options but added that “we hope the agency itself is looking for something that’s a more workable solution.”

Sen. Cecile Bledsoe (R-Rogers) sang a similar tune. She said that “lots of people are looking at options because [cutting level 3 nursing care] is truly the last thing anyone wants to do. We’re just trying to find facts.”

Bledsoe said that she thought there was another way to deal with the shortfall but “I just don’t have all of the pieces right now.” She said that she does “not have a timeline right now” for going public with any ideas.

The latest projections from DHS, updated last month, predict that Arkansas will save more than $700 million between 2014 and 2025 and that the savings will continue year after year. The agency projects $158 million in savings over the course of 2014 and 2015, which would cover enough of the Medicaid program’s fiscal shortfall to save Level 3 nursing care.

But Republican leaders are not impressed with the new numbers.

“I think they know what goal they want so I think their projections are an attempt to influence their goal,” Lamoureux said.

Sen. Jonathan Dismang (R-Beebe) is familiar with the update but said that DHS had not yet presented the new numbers to the legislature (DHS says they provided the information as part of their budget-hearing process last month). As to the underlying numbers, he said that “it warrants a second opinion” and objected that the potential impact of the Affordable Care Act on Medicare was not included.

Bledsoe said she was still “thinking about” the new projections but is “not convinced.”

“It all depends on whether the federal government is going to do their part,” she said. “You know, are they going to keep their promise? I think that’s a very big question.”

Regardless of how many studies DHS releases or what they say, some Republican lawmakers will likely remain unconvinced.

“I don’t see any way that I would ever support a full outright expansion,” Dismang said. “Because I don’t believe that we could sustain it.”

But Lamoureux struck a more open note. Though he is skeptical about the DHS numbers, he said that if he was convinced that expansion led to savings for the state’s bottom line, he might be more receptive to expansion.

“It’s never been all or nothing with me,” he said, adding that it was important not to rush into a decision on expansion either way. “I think there’s a really wide range of opinions even within the Republican caucus….Even the most conservative member is willing to look at the whole thing….Some people are very skeptical, some people are hoping that it will work out, other people will be very surprised if it works out.”

We asked DHS for a response to Republican accusations that cuts to Level 3 nursing care could be avoided and that the proposal was only meant to pressure them on Medicaid expansion. Below, see an email from DHS Director of Communications Amy Webb , which reiterates what they've been saying all along — the cuts are harmful but necessary, they are the least harmful option and savings from expansion could be a way to avoid them.

The proposal to eliminate funding for Level 3 care is not something we at DHS want to do, but it is a very real possibility given the size of the shortfall and our limited options for addressing the shortfall. If you take into account the Governor’s budget recommendations, Medicaid still needs to find $138 million in savings in order to cover all the estimated costs of the program for State Fiscal Year 2014. Most of the Medicaid services cannot be cut because they are mandated by the federal government, so we are limited to making cuts in optional services. We also needed to find services that, if eliminated, would result in significant savings that won’t be completely offset by causing rising costs in other aspects of the Medicaid program.

To find those savings, we first identified program changes and efficiencies, and then we moved on to rate reductions and other program eliminations. Unfortunately, those did not get us to level of savings we needed, and given that Medicaid spends a great deal of money on the aged and disabled populations, we had little choice but to look there for savings. We knew eliminating that funding would cause harm, but it was the least harmful option we had.

Believe me when I say, this was not an easy recommendation for Andy or John to make. They understand it could have serious consequences, and they have no desire to play politics with the people we serve.

Expansion does offer an opportunity for real savings, and we provided Legislators with estimates of those savings back in July before we’d made any proposals to eliminate program funding. Those estimates were updated in November, and we provided that information to Legislators as part of our budget hearing process. If Expansion moves forward and some of the money saved from it is shifted over to DHS, saving Level 3 nursing home care would be our number one priority.

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