Task Force Consultant, DHS’ John Selig Disagree On 10-Day Period

DHS Director John Selig leaving a legislative hearing earlier this week alongside Gov. Asa Hutchinson.
Credit Jacob Kauffman / KUAR News

The consultant hired by the Health Reform Legislative Task Force said Thursday that a standard 30-day deadline for responding to a request for income verification for Medicaid eligibility is “probably appropriate,” while Department of Human Services Director John Selig defended the state’s current 10-day deadline.

John Stephen with The Stephen Group and Selig testified at the end of two days of task force meetings. They both told legislators that Medicaid spending will increase by 5% moving forward if changes aren’t made to the program.

The task force was created by legislation earlier this year to consider health care reform as part of a compromise that funded the private option through 2016. The private option uses federal Medicaid dollars through the Affordable Care Act to purchase private insurance for Arkansans with household incomes below 138% of the federal poverty line.

The state is in the middle of verifying income eligibility for about 590,000 recipients of Medicaid and the private option. It’s being done hurriedly after problems with the verification system caused the state to fall behind schedule. Selig said the department is on track to complete the process by the federally imposed deadline of Sept. 30.

Recipients whose incomes appear to have changed through Department of Workforce Services data are sent a letter requesting they verify their incomes. If they don’t respond within 10 days, a process begins that results in them losing their insurance, which they can then appeal.

Stephen told legislators that “the 30-day notice is what we feel through our discussions with (the federal government) is probably appropriate in terms of the language … of the statute.”

As part of an amicable exchange, Selig immediately responded that a standard redetermination is 30 days but usually requires recipients to complete a form that is not required this time. He said DHS has had a 10-day notice for at least 20 years.

“We’re on at least weekly calls with the federal government, and they are not raising a concern about our 10-day notice,” he said.

Selig said about 400,000 redeterminations have begun. Of those about 70,000 have been renewed. As of Aug. 18, 48,987 recipients have received notices of termination or have been terminated. However, 2,077 of those have been reinstated, leaving a total of 46,910. Most of those were terminated because they did not respond in time.

Selig expects a greater percentage of future redeterminations to be renewed because many involve children and many recipients are on the Supplemental Nutrition Assistance Program and therefore clearly are eligible for the private option.

Gov. Asa Hutchinson on Wednesday guessed that about 220,000 Arkansans will remain on the private option, a decrease from the high of 259,000 Arkansans that were determined to be eligible before the income verifications began. Selig guessed that 70,000 eventually will receive notices of termination but many will be renewed, making the governor’s number as good an estimate as any. “But it could swing wildly from there,” he said.

Selig told legislators that if the request for income verification is returned to DHS as undeliverable, the agency will try to make contact if it has information in the case file. Otherwise, clients’ eligibility will be terminated because it’s their responsibility to inform DHS that they have moved.

MANAGED CARE
Legislators asked the consultants about the possibility of managing the private option using a managed care model, where a private company would be contracted to manage the program rather than it being administered directly by a state agency.

Stephen said that New Hampshire started its version of the private option using a traditional model and then moved to managed care. Iowa started out with a hybrid model where individuals in households with incomes of 100-138% of the federal poverty level were in a managed care program and the rest administered traditionally. Now, all will be administered by managed care.

He said that DHS recoups premium payments sent to private insurance carriers if it learns that payments have been sent for participants who have died, moved out of state or requested removal from the private option rolls. There are times when a participant will say they no longer wish to be on the private option but then still access medical care. He said he is not aware of any insurance carriers that have tried to recoup costs from medical providers in those cases.

Stephen told legislators that his consulting firm has met with the state’s private option carriers to learn what they are doing to promote wellness.

Ambetter participants are given a card with cash credits added for activities such as visiting a primary care physician and immunizing children. That money can be used to purchase heath care-related goods.

Stephen Palmer, a senior consultant with The Stephen Group, told legislators that the state’s “episodes of care” have cost an average of $3.5 million each to develop, producing savings in each between $600,000 to $1.5 million annually.

That means the state recoups its investment between 2.5 and 5.5 years, not counting operation costs. Under the episodes of care model, medical providers face financial rewards or penalties based on how cost-effectively they treat certain “episodes” such as knee and hip replacements.