The director of the state Department of Human Services said Thursday that it is exploring options to help the state’s community health centers, which contend that they will take a financial hit when the state’s Medicaid program is expanded next year.
Plans are to add about 250,000 low-income adults to Medicaid rolls through coverage that the program will purchase in private insurance plans.
“We do not want to harm these entities, but we do want to be as consistent as possible with the thinking behind the private option,” Department Director John Selig said, referring to the method the state plans to use to expand Medicaid.
Selig made the comments at a joint meeting of the state House and Senate public health committees in which lawmakers also questioned community health center officials about their claims that the state’s plans for Medicaid expansion will force them to lay off employees and close clinics.
Operating 83 clinics, the state’s 12 community health centers receive federal grants to provide health care in areas that lack other providers or where people lack insurance or have a high incidence of health problems.
Under the Prospective Payment System, created by Congress in 2000, the health centers have received an enhanced reimbursement rate for treating Medicaid recipients, who make up about 28 percent of the centers’ patients in Arkansas.
Starting next year, however, people who become eligible for Medicaid under the expansion of the program will receive coverage through private insurance plans, with their premiums paid by Medicaid.
The Human Services Department’s plans call for the companies offering the plans to be allowed to negotiate rates with the centers.
The centers predict that those rates will cover only about 59 percent of their costs for treating the patients.
The Prospective Payment System rates, on the other hand, cover about 80 percent of the centers’ expenses, center officials said.
“Welcome to the private-pay world,” said Sen. Missy Irvin, R-Mountain View.
Questioning whether the centers could be more efficient, she noted that privately funded clinics manage to survive with commercial reimbursement rates.
Kathy Grisham, director of the Community Clinic in Springdale, said the centers’ expenses include the cost of providing services such as case management and patient education that not all privately funded clinics provide.
“This is what we do, and these are the services the PPS rate is designed to provide,” Grisham said.
During more than two hours of discussion and debate, some other lawmakers also questioned the need for the enhanced rate.
Noting that the centers’ costs include administrative expenses, Sen. Jonathan Dismang, R-Beebe, asked for a list of the salaries of the centers’ directors.
Rep. John Burris, R-Harrison, the House committee chairman, noted that some newly eligible Medicaid recipients will be classified as “medically frail” and assigned to the traditional fee-for-service program, which will continue to pay the centers in accordance with the enhanced rate.
The remaining recipients will likely be healthier and less expensive to treat, he said.
Rep. Reginald Murdock, D-Marianna, said the Human Services Department should reconsider its plans.
He said he was assured during this year’s legislative session that the private option wouldn’t hurt the Lee County Cooperative Clinic, a health center in Marianna.
“I really think we need to hear what the people are saying,” Murdock said.
The expansion, approved by the Legislature this year, will extend Medicaid coverage to adults with incomes of up to 138 percent of the poverty level - $15,860 for an individual or $32,500 for a family of four.
Federal law requires Medicaid to pay the centers in accordance with the enhanced rate, but the department plans to seek a waiver from the requirement as part of its application to the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services to implement the private option.
The public comment period on a draft of the waiver application ended at midnight Wednesday. The Human Services Department plans to submit the application by Aug. 2.
While they would be paid negotiated rates by private health plans covering Medicaid recipients, the centers would continue to receive the enhanced rate for patients in the traditional Medicaid program, which covers about 680,000 people. The Human Services Department expects to eventually transfer some people served by the traditional program to the private option, however.
Selig said Gov. Mike Beebe “does not want to see undue harm to the community health centers.”
The department is considering seeking federal approval to set up a fund that would use federal Medicaid money to help the centers if they need it, he said.
However, he said, the centers are “in a good position to negotiate a reasonable rate with the insurance companies,” since some of them are the only medical-care providers in a community.
Front Section, Pages 1 on 07/26/2013