The state Department of Human Services (DHS) is currently reviewing responses from stakeholders regarding the DHS "Bending the Curve" Medicaid Cost Reduction Strategies proposed to help address looming cuts in the program that provides health services to the poor and handicapped.

 

Initially the state expected to have $100 million less appropriated for Medicaid in fiscal 2011. That amounts to a $400-million cut overall because the state receives a federal match of three dollars for each dollar spent. But now that shortfall will be reduced because of an Attorney General (AG)'s lawsuit settlement. 

 

Julie Munsell, DHS director of communications, said the AG settlement with Eli Lilly and Company that is slated for restitution for the state share of the Arkansas Medicaid program should total $16.5 million.

 

"But we have not actually received these funds as of today, and are not sure when we will," Munsell said.

 

The DHS asked stakeholders including physicians, hospitals and other healthcare providers, to respond to a DHS menu of strategies for reducing Medicaid costs, indicating which options are favored.

 

The options are:

1. Reduce the number of individuals covered.

2. Limit the types of services covered.

3. Reduce the utilization of services covered.

4. Reduce provider reimbursement.

5. Increase consumer cost sharing.

6. Reduce the cost of administration.

7. Increase Arkansas Medicaid revenues.

8. Reduce fraud and abuse.

 

Munsell said DHS is in the process of reviewing those responses.

 

Elisabeth Wright Burak, health policy director, Arkansas Advocates for Children & Families, said funding cutbacks need to be considered in light of the economic impact to the state economy and the need to invest today to save tomorrow.

 

"ARKids First was born as a result of the exact challenges we face today—questions about how to curtail rising Medicaid costs," Burak said. "We have cut the rate of uninsured children in half in our state, saving costs for Medicaid spend-down associated with emergency room visits by children. Cutting eligibility of services across the board does not, in our view, lay the foundation for quality care and costs saving in the long run.

 

"Rather, looking for ways to provide coverage to more vulnerable residents—by continuing with the planned ARKids First expansion or substances abuse, for example—could save Medicaid in emergency room and critical care costs, especially when combined with strengthened health literacy and education efforts."

 

Other recommendations made by Burak include maximizing the use of quality, community-based services over community care whenever possible; minimizing out-of-pocket spending for families; purchasing quality services that lead to positive outcomes; and moving toward a community-based care management model using Arkansas-based providers and infrastructure.

 

Another suggestion was to consider potential savings from expirations of brand name patents since between 2010 and 2014, nine of the top 15 drugs will be moving 'off patent', which could provide significant savings to the state.

 

The Arkansas Nurses Association (ANA) recommends strengthening the use of Advanced Practice Nurses (APNs) to reduce costs and improve care. Studies have shown that using APNs can reduce inpatient admissions by 5.5 percent, outpatient visits by five percent, emergency room visits by 10.9 percent and surgeries by 7.2 percent.

 

Jean K. Zehler, president, ANA, said their proposal submitted to the state includes data projecting that the state could save more than $200 million by the use of APNs as primary care providers.

 

"My biggest concern is that APNs are not identified as primary care providers," Zehler said. "We've seen a lot of articles on the need for more primary care physicians. What we haven't seen in those articles is the proposal to use more APNs to alleviate the shortage of primary care providers. We are underutilizing and being inefficient in the use of APNs by not having them identified as primary care providers. That could lessen the burden on the physician, while eliminating the problem of patients having inadequate access to primary care."

 

About 60 to 70 percent of nursing home residents use Medicaid and hospitalizations could potentially be reduced with care from an APN.

 

"Several studies show hospitalizations among nursing home residents have been reduced where a Geriatric Nurse Practitioner was the primary provider," Zehler said.

 

Zehler also recommends optimizing provider resources by having psychiatric APNs practicing to the full level of preparation and licensure in order to prevent fragmentation and unnecessary expense of mental health treatment.

 

Rita M. Taunton, writing comments for the Bending the Curve proposals endorsed by the Community Developmental Disabilities Provider Network, questioned the overall impact of deep cuts at this time.

 

"It has been reported numerous times that Arkansas is in better financial position than practically all of the states," Taunton said. "Therefore, the urgency to move forward with cuts without completing the assessment of the impact on human life, the economic impact of job loss, leading to decreased state income taxes, increased Medicaid rolls, and fewer dollars in the economy, seems unfounded."

 

Taunton said there seems to be a direct relationship between Medicaid growth and unemployment. Eliminating $100 million in state Medicaid expenditures would amount to a total loss of state revenues of $400 million because of the federal matches.

 

"According to calculations from Families USA, this would result in the loss of 20,520 jobs reducing revenues from income taxes as well as making even more people eligible for Medicaid," Taunton said. "This would be a loss of $760,000,000 in salaries and wages and a loss of $2,068,000,000 in business activity. With unemployment already a concern in our state, why would we take steps to make it worse while Arkansas is eligible for the 3:1 federal match and the enhanced FMAP (Federal Medical Assistance Percentages)?"

 

There are about 9,500 children about 6,221 adults currently being served by the Development Disabilities Day Treatment Clinic Services (DDTCS) in Arkansas.