$616,500 to insurer to fix state baby glitch

The Department of Human Services expects to pay the state's largest insurance company $616,500 to offset the medical costs associated with the deliveries of 137 babies whose mothers were inadvertently allowed to enroll in the private option last fall, a department spokesman said Monday.

The mothers are among more than 63,000 recipients of the Supplemental Nutrition Assistance Program, also known as food stamps, who enrolled after receiving notices in September notifying them that they were eligible for coverage under the state's expanded Medicaid program.

The private option allows eligible recipients -- adults with incomes of up to 138 percent of the poverty level -- to sign up for a private plan on the state's health insurance exchange and to have their premiums paid by Medicaid.

Pregnant women are normally not eligible for the private option because they qualify under an older, fee-service program that covers expenses related to pregnancy and childbirth for women with incomes of up to 200 percent of the poverty level.

But because of an oversight, the notices sent to food stamp recipients did not ask them if they were pregnant. Insurance companies learned that some pregnant women had enrolled after they began receiving claims for pregnancy-related medical expenses.

To avoid a disruption in the women's coverage, the U.S. Department of Health and Human Services' Centers for Medicaid and Medicare Services agreed to allow the women to stay in the private option, with the federal government paying the full cost of their premiums as it does for other private-option enrollees, state officials have said.

Meanwhile, the state Human Services Department notified insurance companies earlier this year that it would reimburse them $4,500 for each child born to the women through June 30.

Human Services Department spokesman Amy Webb said Monday that the department paid Arkansas Blue Cross and Blue Shield $234,000 on May 2 in connection with 52 children born to private-option recipients enrolled in plans with the company or its national affiliate, the Blue Cross and Blue Shield Association.

The department expects to make a second payment to Arkansas Blue Cross this week for $382,500 in connection with an additional 85 births, she said.

St. Louis-based Centene Corp. also has requested reimbursement for a smaller number of births, Webb said. The request was still being reviewed Monday, she said, adding that she didn't have any additional details.

Little Rock-based QualChoice Health Insurance, which also offers plans on the exchange, had not submitted a request for reimbursement for any births as of Monday, Webb said.

Webb said that state officials expect the federal government to cover the full cost of the per-birth payments.

Under the traditional Medicaid program for pregnant women, the state pays about 30 percent of the costs, with the federal government covering the rest.

Webb said previously that the payments would count toward the per-person cost of the private option, which is capped under the terms of a Centers for Medicare and Medicaid Services waiver authorizing the program.

But she said Monday that the payments are not expected to count toward the per-person cost.

As long as the state's spending stays below the caps, the federal government is expected to pay the full cost of covering the state's newly eligible adults, including those in the private option, until 2017, when the state would begin paying a portion of the cost.

The monthly cap for 2014 is $477.63 per person. That limit rises to $500.08 in 2015 and $523.58 in 2016.

If the state's spending for the private option exceed the caps during the three-year demonstration period, the state would owe the difference to the federal government. However, the terms of the waiver allow the state to ask for the caps to be adjusted if the state has information that caps "may underestimate he actual costs of medical assistance for the new adult group."

Rep. David Sanders, R-Little Rock and a sponsor of the law creating the private option, has called the supplemental payments a reasonable way to fix a glitch in the private option's first year.

He said Monday that the payments that have been made so far show that the number of pregnant women who were enrolled is small compared with the total number of people enrolled.

As of May 31, more than 152,000 people were enrolled in the private option, while more than 20,000 other newly eligible adults had been assigned to the traditional Medicaid program because their health needs were considered exceptional.

"A lot of this is, you have to be flexible," Sanders said.

Enrollment under the state's expanded Medicaid program began Oct. 1 for coverage that started in January.

The income cutoff of 138 percent of the poverty level translates to $16,105 for an individual or $32,913 for a family of four.

A household income of 200 percent of the poverty level is equivalent to $23,340 for an individual or $47,700 for a family of four.

Webb said that the application used to determine eligibility for the private option and Medicaid asks whether the applicant is pregnant.

As of early April, 8,330 women were in the program for pregnant women, which covers medical expenses for 60 days after a child is born. After those 60 days have passed, the women who were covered under the program can apply for coverage under the expanded Medicaid program, including the private option.

Women who become pregnant after enrolling in the private option can continue receiving coverage through the private option or switch to the program for pregnant women.

A Section on 07/08/2014

Upcoming Events