Federal Medicaid officials are now reviewing and possibly amending Arkansas' waiver application for a Medicaid "private option" -- and as last minute changes to the waiver proposal show, the policy is evolving.
Designed to cover some 225,000 low-income Arkansans with subsidized private insurance in lieu of Medicaid, the private option policy waiver application received a fair amount of comments from providers, insurers and other industry stakeholders -- prompting the Arkansas Department of Human Services (DHS) to change some proposals.
In designing reimbursement policies for federally qualified and rural health clinics treating private option enrollees -- Arkansans earning up to 138 percent of the federal poverty level -- DHS initially proposed replacing prospective payments with a system for qualified health plans to pay FQHCs and RHCs at negotiated market rates.
But after some commenters suggested keeping prospective reimbursement, DHS decided to take a somewhat different path over the long term -- working with FQHCs and RHCs to develop an alternative payment methodology for private option enrollees.
While that system is crafted in 2014, if CMS approves the waiver, qualified health plans will have to reimburse FQHCs and RHCs at commercial rates "consistent with Arkansas law and market dynamics, with supplemental payments made by the Arkansas Medicaid," DHS officials wrote.
Another issue of interest has been drug formularies. Several Arkansas stakeholders said they were concerned DHS's proposal to let insurers limit drug formularies in private option health plans could leave some enrollees with limited access to drugs they may be currently taking, especially speciality biologicals.
In response, citing recently clarified federal Medicaid rules, Arkansas DHS said the state "will no longer need to request a waiver to limit private option enrollees to their QHPs' formularies."
Under Medicaid, an alternative benefit plan "may include a closed formulary of drugs, based on the formulary of the reference plan," the agency wrote -- so since Arkansas will be using the same plan to define the benefit packages of QHPs and the alternative benefit plan, "the formularies for the Alternative Benefit Plan and QHPs will be subject to the same requirements, and thus a waiver is not required."
Several commenters also asked DHS to clarify whether private option enrollees will be required to pay deductibles for silver tier health plans. DHS thanked the commenters for "flagging this ambiguity," and said that the final waiver application more explicitly outlined their plan: Arkansas Medicaid "will wrap the deductible" for private option enrollees, reducing some of their cost-sharing.
And in response to concerns about enrolling some of Arkansas' poorest residents in a private health plan, DHS clarified that parents with incomes below 17 percent of the federal poverty level will be enrolled in traditional Medicaid, not private option health plans.
Likewise, children from low-income families -- up to 138 percent of the federal poverty level -- will continue to be covered through CHIP. "Prior to enrolling children in the private option, the state will issue a notice of its proposed changes," the agency said.