Arkansas Medicaid program showing early success in curtailing costs | Arkansas Blog

Tuesday, January 15, 2013

Arkansas Medicaid program showing early success in curtailing costs

Posted By on Tue, Jan 15, 2013 at 3:46 PM

One interesting note from Gov. Mike Beebe in his state of the state today: Beebe said that the state Medicaid program was showing its slowest growth in 25 years, which meant that the Medicaid shortfall was likely to be less than originally thought. He credited the Payment Improvement Initiative as a major factor in the trend toward reduced costs.

I asked Department of Human Services Communications Director Amy Webb whether they had new numbers on the shortfall and whether the Initiative has shown early signs of reducing costs. She responded by email:

We don’t have numbers yet. The Medicaid staff is working on new projections and we should have them in a week or two.

What I can tell is that based on data for the first six months of the year, the average rate of growth in the Medicaid program is less than three percent. Over the last five years, the average rate of growth has been six percent so we are significantly less than that. We believe that, in part the slowing of the growth rate is based on a sentinel effect [doctors practicing in more efficient ways because they know external review is in place] from our payment initiative. Providers know that we are changing the system to one that is more efficient, provides more coordinated care and better care. We think providers understand that and are already moving in that direction.

We won’t know exactly what the slowed growth rate translates to moneywise until we complete our projections.

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