Legislators reviewing the state’s Medicaid program and healthcare system were told Monday by Arkansas health officials, researchers at the Bureau of Legislative Research, and hospital representatives that the cost to hospitals and clinics of uncompensated care is in decline thanks in-part to reforms enabled by the Affordable Care Act.
The 16 member Health Reform Legislative Task Force also heard testimony about impending federal cuts to various uncompensated care programs. The reduction in federal funds, specifically for variations of uncompensated care, were made because the Affordable Care Act established another way to help hospitals pay for care. It gives the un-insured coverage through the expansion of Medicaid.
During a lunch break in the full-day meeting Arkansas Surgeon General Greg Bledsoe said lawmakers need to be aware of the changes coming to federal funding for uncompensated care. Bledsoe said some federal assistance, known as Medicaid DISH, will gradually decrease beginning in 2017.
“We have people coming at this from all different political perspectives saying ‘I don’t want this’ or ‘I don’t want that’ but if we don’t deal with the fact that the federal government is reducing its funding from some of these sources then we could end up in a big hole for the state and that’s just the reality of the situation. We have to be careful with that,” said Bledsoe.
Arkansas led the nation in a reduction in the number of uninsured people in 2014, decreasing 11 percent. Much of that is attributed by state officials to the coverage of nearly 250,000 low-income Arkansas in the state’s federally-approved alternative use of Medicaid funds known as the private option. The task force was created as a response to contentious politics that had followed the bi-partisan health care program since its 2013 inception.
The expansion of Medicaid in the ACA raised income eligibility thresholds to 138 percent of the poverty level. The U.S. Supreme Court ruled each state has to opt-in to Medicaid expansion. Arkansas is among 28 states that has chosen to do so.
Flexibility in the ACA allow states to use expanded Medicaid funds in alternative approaches. In 2013, the 89th General Assembly opted to use federal funds to provide private insurance instead of utilizing the federal Medicaid program or opting-out.
Bledsoe, a non-voting member of the task force, said understanding the term “uncompensated care” is a foundational concept legislators need to understand.
“Before we had the debate over the private option hospitals were taking losses on this. The state government was having to pay for this through supplements for hospitals and other non-profits. It’s not like we weren’t paying for this initially, someone’s paying for this. As far as defining it, there’s a lot of different ways but settling on one definition and recognizing this isn’t free care, but often the tax payer providing it, it’s an important thing to get settled,” said Bledsoe.
Representative David Meeks, a Republican from Conway, said the committee should establish a standard understanding.
“There’s bad debt, charity care, people who were supposed to pay and who didn’t pay…Where do we get the definition, what is the right definition to use to actually get a grasp on the cost of uncompensated care in Arkansas,” said Meeks.
Arkansas Hospital Association CEO Bo Ryall said the state’s Medicaid expansion plan has reduced the costs of uncompensated care which totaled over $300 million in 2013. Ryall said the ramifications run deep in a healthcare system compromised of 104 hospitals.
Meeks is one of 16 legislators sitting on the task force. He said there are more ways than a private option-like system to help hospitals provide uncompensated care. The ACA allows for much greater state-control of several major healthcare elements of the federal healthcare law in 2017.
“Let’s say like the governor wants, if we could pull a block grant and say, ‘give us our money,’ a set amount so that we know what how our future plans are, and then we figure out how to set that program into place for our hospitals. Again, we don’t know whether that’s going to be everybody, a certain population, if we’re just going to take the money and say, ‘okay hospitals we’re going to provide you a payment with uncompensated care to a certain extent,’” said Meeks.
Meeks also said solutions to federal uncompensated care cuts could include something akin to mimicking the federal support - under Medicaid DISH - that is scheduled to decrease in 2017. Meeks also said it could it be much different.
The task force has until December 31st of this year to issue recommendations on the future of the state’s healthcare system.
