By John Lyon
Arkansas News Bureau
LITTLE ROCK — State officials working on revamping Arkansas’ Medicaid program have identified nine priority areas for reform.
In an Aug. 10 letter to U.S. Department of Health and Human Services Secretary Kathleen Sibelius, Gov. Mike Beebe said the nine areas “appear to hold significant potential for early success and impact in moving from fee-for-service to episodic payments,” or payments based on an entire course of treatment for a single health issue.
The areas are pregnancy and neonatal care; attention deficit hyperactivity disorder; type 2 diabetes; back pain; cardiovascular disease; upper respiratory infections; developmental disabilities; long-term care; and prevention.
The state received approval in May to prepare a proposal for changing the way doctors in the state are reimbursed through Medicaid. Beebe has said that with a shortfall in the state’s Medicaid budget looming, a more efficient system is needed to replace the current one in which health care providers are reimbursed for each service they provide.
The shortfall is expected to be at least $60 million by next July.
State officials initially considered a program-wide overhaul, but Arkansas Department of Human Services Director John Selig said last month that following discussions with Arkansas health care providers, “we’ve decided to pick a few priority areas where we can have a big impact, that are ripe for change, where maybe there’s a lot of inefficiency.”
Beebe told Sibelius in the Aug. 10 letter, “Rather than make the deep program cuts seen in other states, our goal is to align payment incentives to eliminate inefficiencies and improve coordination and effectiveness of care delivery. We will do this, in large part, by moving away from a fragmented, volume-driven fee-for-services system to one that pays teams of providers for episodes of bundled care.”
Beebe said a team is being assembled to work on projects such as assessing the existing system through data analysis; researching national models and best practices; assessing the legal implications of the overhaul; working with stakeholder groups and local experts; and identifying other available resources and system supports.
The team will draw on the help of local consumers, advocates and providers as well as national experts, Beebe said.
Those national experts will include the international consulting firm McKinsey & Co., which has entered into a $3 million contract with the state Department of Human Services to provide services through June 30.
Blue Cross and Blue Shield of Arkansas has agreed to provide half of the cost to hire the firm, and the state hopes to obtain the rest in federal matching funds, said Amy Upshaw Webb, spokeswoman for the state Department of Human Services.
Beebe said Selig is working to schedule a time for the state’s project team to meet with Sibelius’ leadership team.
“Supporting this transformation beyond the initial stages will require considerably more financial support than is available in our state,” the governor said in the letter, adding that he hoped he could count on federal financial support.
Last month, members of Arkansas’ Senate Public Health, Welfare and Labor Committee complained to Selig and state Surgeon General Joe Thompson that they had seen little in the way of specifics about plans for Medicaid reform.
Webb said today that copies of Beebe’s letter have been sent to every House member and all senators who asked for new information. Selig is expected to appear before lawmakers to provide an update, but no date has been set, she said.
Thompson said officials are making progress.
“We’re moving into a different phase now, where we’re actually starting to look at ways that we can reward providers for getting high-coordinated, quality care for our patients,” he said.
