Arkansas Gov. Mike Huckabee's effort to join the Medicaid reform bandwagon has rolled into a barrage of sniper fire from providers in the state.
Having set a goal of trimming $230 million from the state's Medicaid budget in the 1998-99 biennium, Huckabee and the state's Department of Human Services have invited hospitals, physicians, nursing homes and other providers to help figure out how to attain the savings without cutting services.
But the state's trade and professional associations are raising a ruckus and trying to strip the veil away from what they think is an abrogation of state responsibility.
"I have said to the governor and anybody who would listen, `We're going to fly a 747 from Little Rock to Washington on one gallon of fuel,' " said Jim Teeter, president of the Arkansas Hospital Association. "There's no way spending reductions of that magnitude would not result in reduced services and elimination of services."
At the Arkansas Medical Association, Director of Government Affairs Lynn Zeno said: "There is sufficient funding to fund the state Medicaid program (as it exists now). The governor has said we're going to attempt to hold all state government spending to a 2.9% increase, and of course the Medi-caid budget increases at about 6% a year."
The program's administrative costs run only 4% of t otal program costs, Zeno said, and a recently enacted gatekeeper program for physician services has saved $30 million in 18 months.
"We think the program is very good right now," Zeno said.
Ben Salewski, executive director of the Arkansas Health Care Association, a nursing home group, said the governor's goals are "unrealistic in scope. . . . I'm not sure there's enough fat in the system. I don't think any provider group represented there in the work group would agree that we can cut that much out of the Medicaid budget without harming the recipients of Medicaid services."
Administrative costs are so low, Salewski added, that any efficiencies to be found are probably not of a magnitude to solve the budgetary problem.
In Arkansas, $1.3 billion is being spent this year to cover 350,000 Medicaid recipients, including 26% of residents under 21. The state contributes 24% of that; the federal government pays the rest. Medicaid also pays for 75% of nursing home care in Arkansas.
"The governor has asked us to look into ways to stop the growth in Medicaid," said Joe Quinn, director of communications for the Arkansas Department of Human Services. Among measures under consideration, he said, are a small copay-"something that a Medicaid recipient could handle, that's not unreasonable." Also, the state is thinking about stiffening prior authorization requirements. Now, a four-day hospital stay requires authorization. That could be changed to a two-day stay.
The state also will look at more ways to integrate competitive bidding into the financing of Medicaid.
The department is holding hearings around the state to solicit views from providers.
That doesn't mean they like what they're hearing. If Medi-caid is going to be made subordinate to budget politics, the hospital association's Teeter said, there are a few more things to be done. The group endorses extending the 7% copay requirement to all providers, enacting a cap on payments for all providers and reconsidering funding optional services.
"The hospitals' burden in Medicaid is-always has been-disproportionate. It's to the point now that it doesn't approach fairness," he said.
The medical society's Zeno said he was unfamiliar with the spending cap idea, but if the state wants to put a copay on medical services, "then we need to call it what it really is: a reduction in Medicaid payments. The reason these people are on Medicaid is they can't afford to pay. So the provider community eats that reduction in reimbursement."
For nursing homes, Salewski said, "the copay argument is irrelevant. We'd be happy with a 7% copay because in the nursing home industry the copay is 100% of all income, minus a $30 personal need allowance."