Many Medicaid, Private Option Out-of-Staters Already Removed, DHS Says

File photo of DHS Director John Selig (closest) at an Arkansas legislature hearing.
Credit Jacob Kauffman / KUAR

Many of the 42,891 Arkansas Medicaid and private option recipients whom a consultant says may live out of state have already been terminated from those programs, legislators were told Tuesday.

Also, Department of Human Services Director John Selig said some Medicaid, services should be administered through a private managed care company. Selig and Deputy Director Mark White testified before the Health Care Legislative Task Force, the group of legislators who are considering reforms to Medicaid and the private option.

The task force must make its report by the end of this year and will base its recommendations in part on a report released Oct. 7 by its consultant, The Stephen Group. The report said a search by information provider LexisNexis found 42,891 Medicaid and private option recipients have best addresses that are out of state, and 495 were dead before they began receiving benefits.

Medicaid is the state-managed program funded mostly by federal dollars that provides health care benefits to the poor, the disabled and the aged. The private option uses Medicaid dollars to buy private health insurance for individuals earning 138% of the federal poverty level or less.

White told legislators that DHS removed about 60,000 beneficiaries as part of its eligibility redetermination process. Many of those were included in the LexisNexis search. The data was provided to that company in July, before the bulk of the removal began.

“What we have found in our preliminary analysis is that a significant number of those individuals have already been terminated through our renewal process,” White said, adding that DHS would have more specific numbers in a couple of days.

As for the deceased recipients, White said death certificates have been found for some, and those names have been removed. In other cases, no death certificates have been found. The department is also closing cases where recipients are found to be incarcerated. White said DHS is considering ways to improve its processes when names are first added to the rolls. DHS is also working with the federal Centers for Medicare and Medicaid Services to perform more frequent checks than the required once-a-year redeterminations.

The system is automatically and retroactively recouping premiums paid to insurance companies for covering ineligible private option recipients, which Selig said is policy under rules set by the federal government. Unfortunately, that policy harms doctors who provide services expecting to be reimbursed by insurance providers. Rep. Deborah Ferguson, D-West Memphis, said doctors have told her they have had payments recouped, including one who had performed a surgery.

Selig said the Medicaid eligibility redetermination process has removed about 49,000 recipients from the private option rolls but returned about 12,000 who were determined to be eligible. As for the other 37,000, DHS has made hundreds of calls to try to understand that population but only made contact with about 25%. Many have said they had obtained coverage elsewhere or were in the process of reapplying. Others said they didn’t want or need the coverage. Forty percent of the phones were disconnected or were a wrong number, indicating the population to be transient.

The Stephen Group report presented as an option a managed care model where private companies would manage parts of the program under DHS oversight. Asked for his opinion, Selig said that model would better serve the state concerning high-cost populations and dental services than if those programs were managed by DHS. Selig said managed care companies have expertise and flexibility that DHS does not, such as the ability to provide incentives for wellness activities or pay for air-conditioning.

“There’s probably nothing that a managed care company can do, well, with a couple of exceptions, that we couldn’t do,” he said. “The challenge is our ability to actually to do it with the staff we have, having to kind of build it ourselves each time we want to do something different. We’re frankly not as nimble.”

However, he said DHS must provide appropriate oversight.

“Again, you don’t just hand the money to somebody. You’ve got to do it right,” he said.

Selig said Medicaid needs to be elevated higher than its position as a program within DHS. If it became a separate department, Selig said it could pull the program away from other department divisions that provide other services to the same population. He said communication decreased when the Department of Health split from the Department of Human Services.

Selig said DHS needs to be able to pay higher salaries for certain positions, such as those dealing with information systems and health care specialization.

“When we’ve got contracts that are anywhere from $5 (million) to $200 million with companies, we’ve got to have the ability to go toe-to-toe with them, and we just don’t have that right now,” he said.