Under Arkansas’ healthcare payment overhaul, Medicaid will likely begin paying nursing homes more for caring for patients with greater medical needs - something the program doesn’t do now, the state’s Medicaid director said Tuesday.
“It’s going to be a significant change,” said Andy Allison, director of the state Department of Human Services’ Medical Services Division.
Allison spoke Tuesday at a meeting in Little Rock of nursing-home representatives and other health-care providers to update them and gather feedback on the state’s effort to change the way it pays for long-term services for the elderly and disabled.
Currently, Allison said, payments to nursing homes are tied to the facility’s costs, which “don’t tend to relate to the level of need” of a patient.
“We did find that there are a number of patients in settings which would appear to be more intense than they need,” Allison said. “Paying appropriately, we think, will lead to a better match between a patient and the level of services that they need.”
Medicaid also will change the way it pays providers of supportive services to the elderly, including adult day care, housekeeping and home-delivered meals.
The changes, set to begin next summer, are part of the state’s Health Care Payment Improvement Initiative, which seeks to financially reward providers who provide care at low cost and seek reimbursement from those whose costs are deemed excessive.
Altogether, Allison said, nursing-home care and home- and community-based services for the elderly make up about 20 percent of Medicaid’s annual spending, which totaled $4.68 billion in the fiscal year that ended June 30.
How the new payment system for such services will work hasn’t been determined, he said.
One option for home- and community-based services would have Medicaid pay a lead entity a lump sum for an array of services, instead of paying each provider individually as is current practice.
Another option is a method similar to the one the state is using for other “episodes of care.”
Under that model, Medicaid still pays providers for each service they provide, but it also identifies a “principal accountable provider” who is responsible for directing most of the care.
After tracking claims for a year, Medicaid will tally each principal accountable provider’s average costs for providing an episode of care. Those providers whose costs fall below a threshold deemed acceptable will receive extra payments, and those whose costs are above the threshold will owe money to Medicaid.
The state began tracking claims for the first three episodes - upper-respiratory infections, maternity care and attention-deficit hyperactivity disorder - in October and expects to report early next year on the first payments and penalties associated with those episodes.
Donna Freel Childress, director of the Arkansas Health Care Association, which represents the nursing-home industry, and the Arkansas Assisted Living Association, said in an emailed statement that the groups have a “major concern” with how tying payments to a patient’s level of need could affect nursing homes’ ability to maintain staffing levels, which are based on regulations and not patients’ level of need.
She said the current payment system allows nursing homes to care for a variety of patients.
“This is important in rural Arkansas where there is limited access to long-term care in general,” Childress said.
Elaine Eubank, chief executive of Central Arkansas Area Agency on Aging, also known as Carelink, said she hopes the new system will help better coordinate the services that elderly people receive in their homes.
The North Little Rock based nonprofit provides housekeeping and other services to people in Faulkner, Lonoke, Monroe, Prairie, Pulaski and Saline counties.
Most people the agency serves also have services provided by at least two other providers, she said, which can be confusing for the client.
“All they know is, Debbie didn’t come,” Eubank said. “They don’t even know who Debbie works with, her employer, what service she was providing - they’re really just overwhelmed by the parade of people who all work for different places who are in their homes now.”
Herb Sanderson, the associate director for advocacy for AARP Arkansas, said he hopes the new system will allow more people to receive care in their homes, instead of in a nursing home.
“The majority of people who need long-term care would prefer to receive it in their home or community,” Sanderson said. “The current system is heavily weighted toward institutional care.”
Arkansas, Pages 9 on 07/31/2013