What's next for health reform task force | Arkansas Blog

Thursday, January 21, 2016

What's next for health reform task force

Posted By on Thu, Jan 21, 2016 at 3:21 PM

The Health Reform Legislative Task Force met yesterday, and as I reported, the question of whether to involve managed care companies in efforts to reform the traditional Medicaid program continues to divide the task force. The state's consultant, the Stephen Group, will now be focusing on an alternative that achieves the governor's target of $835 million in savings over five years but does not use full-risk managed care. That gives some momentum to opponents of managed care, as the Stephen Group will present its analysis, including budget scoring, on the alternative approach next month. However, task force members who support managed care for Medicaid's high-cost populations say that option is still on the table, with the task force set to take final action in March. 

Some other highlights from yesterday's meeting: 

Timeline
The task force has three meetings scheduled in the coming months.

* February 17: Gov. Asa Hutchinson will report back from his early-February meeting with the feds. Hutchinson has to negotiate  the details of "Arkansas Works," his proposal to add GOP-friendly tweaks to the private option — it will be up to federal officials just how much they allow the state to do in revising the PO. By February 17, we should have a pretty clear picture of what "Arkansas Works" looks like. Also at this meeting, the Stephen Group will present its findings on a Medicaid reform plan (as explained here, the plan they present will not use full-risk managed care companies but will employ a company to manage care — more care coordination, more focus on primary care docs, incentives to encourage providers to offer high-quality and cost-effective care, and shifting from overreliance on nursing homes to more home- and community-based care). This meeting will be purely informational — the task force will take no action. 

* March 7: The task force will take action, making its final recommendations. This will presumably be two big votes: 1) An up or down vote on whether to continue the private option via "Arkansas Works." Of course, this would still need approval from a supermajority in the full General Assembly.  2) A vote for full-risk managed care for Medicaid's high-cost populations or the alternative that the Stephen Group presented at the previous meeting. The executive branch would then proceed with the reform plan the task force votes for — including running contracts through the relevant committees. 

* March 29: The task force will meet to convert its recommendations into legislation. The legislature will meet in full at a special session in April to vote on this legislation. This would include enabling legislation for "Arkansas Works" and, possibly, any legislation necessary to make it easier for the executive branch to enact the reform plan for traditional Medicaid. 

Medicaid growth baseline
The Stephen Group yesterday explained the methodology it will use to score the traditional Medicaid reform plan and anticipated exceeding the governor's $835 million target. The target will not be a cut against current spending levels; instead, the savings will be projected against a baseline of 5-percent annual growth in the Medicaid program. In other words, the Stephen Group is assuming that if the task force simply did nothing in terms of traditional Medicaid reform, spending would grow around 5 percent per year. 

Worth noting: That's actually faster growth than the Medicaid program in Arkansas has seen in recent years; in fiscal year 2013, it only grew 1.47 percent, in fiscal year 2014 it grew 2.16 percent, and 2.07 percent in fiscal year 2015. So is the 5-percent baseline too conservative in terms of an effort to contain costs? Not necessarily — in previous years the growth rate fluctuated between 6 to 10 percent. Back in 2010, say, a 5 percent growth rate would have been considered an extremely aggressive goal.

DHS Director John Selig said that 5 percent was a reasonable baseline going forward. He said that the slowed economy and factors in the health sector such as fluctuations in drug prices may have led to slowed growth in recent years that is not sustainable going forward. According to Selig and the Stephen Group, national trends suggest that growth in the Arkansas Medicaid program is likely to pick up to around 5 percent annually in the coming years without further reforms.

But Selig also said that one factor that may have contributed to the slowed growth in recent years was the implementation of programs to incentivize providers toward more cost-effective care (programs that would be expanded significantly under the Medicaid reform package proposed by the Stephen Group). DHS's initial efforts on this front may have had a "sentinel effect" — that's health-wonk speak for the tendency of people to perform better on their own when they know they're being watched. In other words, there may have been a fair amount of slack and waste among Medicaid providers, and once DHS began implementing reforms, providers tightened the ship on their own. These effects could be permanent, so it's at least possible that 5-percent baseline is too high. It's impossible to know for certain. 

Five percent is probably a reasonable baseline and ultimately, if the Stephen Group's recommendations save money and lead to higher-quality care, it's worth doing regardless. But slight variations in the growth rate make a massive difference in terms of spending. Imagine that the task force does nothing and the growth rate is 3 percent instead of 5 percent (again, even that's higher than the growth rate has been for the last three years). That would amount to more than a billion dollars less in spending as compared to a 5 percent growth rate. In other words, it would exceed the governor's target without enacting any new reforms at all.

Obviously, predicting the future is hard, and budget forecasters have to come up with the best growth baseline they can. In the grand scheme of things, the point of these reforms is precisely to slow the growth rate, and the Stephen Group report argues that without them, spending for Medicaid's high-cost populations will grow at an unsustainable rate. But I mention all of this because Hutchinson has focused on the target number, $835 million, that he claims is necessary to "pay for" the private option. For the record, if the Medicaid program simply sustains the growth rate of recent years, the governor will have his "pay for" and then some.   

Tags: , , , , , , , , , , ,

From the ArkTimes store

Favorite

Comments

Showing 1-1 of 1

Add a comment

 
Subscribe to this thread:
Showing 1-1 of 1

Add a comment

More by David Ramsey

Readers also liked…

  • The long and winding road: No exception yet for 30 Crossing

    The Arkansas highway department's representative on the Metroplan board of directors told the board today that the department is requesting an exception to the planning agency's cap on six lanes for its 30 Crossing project to widen Interstate 30 from six to 10 (and more) lanes.
    • Jun 29, 2016
  • Arkansas Times Recommends: A Literary Edition

    Arkansas Times Recommends is a series in which Times staff members (or whoever happens to be around at the time) highlight things we've been enjoying this week.
    • Jul 1, 2016
  • Federal judge reprimands John Goodson for misconduct in class-action case

    John Goodson  — the Texarkana attorney, D.C. lobbyist, and husband of Arkansas State Supreme Court Justice Courtney Goodson — was reprimanded today by a federal judge for his conduct in a class-action case.
    • Aug 3, 2016

Most Shared

  • In the margins

    A rediscovered violin concerto brings an oft-forgotten composer into the limelight.
  • Donald Trump is historically unpopular — and not necessarily where you think

    My colleagues John Ray and Jesse Bacon and I estimate, in the first analysis of its kind for the 2018 election season, that the president's waning popularity isn't limited to coastal cities and states. The erosion of his electoral coalition has spread to The Natural State, extending far beyond the college towns and urban centers that voted for Hillary Clinton in 2016. From El Dorado to Sherwood, Fayetteville to Hot Springs, the president's approval rating is waning.
  • Arkansans join House vote to gut Americans with Disabilities Act

    Despite fierce protests from disabled people, the U.S. House voted today, mostly on party lines, to make it harder to sue businesses for violating the Americans with Disabilities Act. Of course Arkansas congressmen were on the wrong side.

Most Viewed

  • The kids are marching open line

    The open line. Kids marching for gun control. And a recollection of how hard it is in Arkansas to restrict gun ownership, even by proven thugs.
  • Another Trump propagandist from Arkansas gets blasted

    If Sarah Huckabee Sanders is Donald Trump's Baghdad Barbie, spouting implausible statements in support of her boss in the style of Saddam's Baghdad Bob, then let's make El Dorado native Hogan Gidley Baghdad Ken.

Most Recent Comments

 

© 2018 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation