LITTLE ROCK — Arkansas officials have identified nine areas of medical care that they want to focus on as they look at changing the way Medicaid pays for services, Gov. Mike Beebe told federal health officials in a letter released Monday.
The state in May was given initial approval to move forward with developing plans to switch from a fee-for-service model that Medicaid uses. The state instead hopes to pay partnerships of local providers for “episodes” of care rather than each individual treatment.
The areas targeted are pregnancy and neonatal care, attention deficit hyperactivity disorder, type 2 diabetes, back pain, cardiovascular disease, upper respiratory infections, developmental disabilities, long term care and prevention, according to an Aug. 10 letter Beebe sent to U.S. Department of Health and Human Services Secretary Kathleen Sebelius.
“Rather than make the deep program cuts seen in other states, our goal is to align payment incentives to eliminate inefficiencies and improve coordination and effectiveness of care delivery,” Beebe wrote. “We will do this, in large part, by moving away from a fragmented, volume-driven, fee-for-service system to one that pays teams of providers for episodes or bundles of care.”
The letter was first reported Monday morning by conservative blogger Jason Tolbert. In it, Beebe wrote that BlueCross and BlueShield of Arkansas — the state’s largest insurer — agreed to provide initial funding to use the consulting firm McKinsey and Company to help in developing the proposed changes.
Beebe’s office on Monday said that any changes are still subject to approval by the federal government.
BlueCross and BlueShield has given $1.5 million for the contract with the firm, and there will also be federal matching dollars available, according to the Arkansas Department of Human Services.
Agency director John Selig and Arkansas Surgeon General Joe Thompson plan to discuss the letter with officials from the U.S. Department of Health and Human Services during a meeting Friday in Washington, state Human Services Department spokeswoman Amy Webb said.
Webb said the nine areas were chosen because officials determined that they would be the best for addressing inefficiencies. She said the list could change as discussions continue.
“Ultimately our goal is to do this well, so we may have to pare down or revise our plans in order do that,” she said.
State Human Services officials have cautioned that the changes won’t eliminate a projected shortfall of at least $60 million that Arkansas’ Medicaid program faces in the budget that begins July 1, 2012.
State Human Services Director John Selig last month said officials earlier this year decided to scale back their original plans to move toward the partnership model throughout Medicaid and instead wanted to use it for selected, high-priority areas.