The House and Senate Public Health committees yesterday approved new rules that would reduce retroactive eligibility for Medicaid expansion beneficiaries from 90 days to 30 days.
Currently, enrollees in the program are retroactively covered for any medical expenses arising in the three months before enrolling. In 2016, the Obama administration granted a waiver of Medicaid rules requested by Governor Hutchinson that would allow the state to eliminate 90-day retroactive eligibility and begin coverage only once a beneficiary was enrolled. However, the Obama administration attached certain conditions for the state to prove that it would protect continuity of coverage for beneficiaries. The state found this requirement irritating and once Trump was elected, Hutchinson asked that the administration remove those conditions and allow the state to eliminate retroactive coverage immediately. Team Trump signed off.
The new rule would limit that retroactive coverage to 30 days for those eligible for the Medicaid expansion program — known in Arkansas as the private option or Arkansas Works — which covers adults who make less than 138 percent of the federal poverty level. The initial idea to eliminate retroactive coverage altogether was apparently revised under pressure from the state’s hospitals.
The purpose of retroactive eligibility is to provide a safety net for people who are eligible for Medicaid but are not yet enrolled (in the case of traditional Medicaid, not impacted by this rule change, that would include elderly people who suddenly have to transition to long-term care in a nursing home, or new babies from lower-income families still awaiting an eligibility determination from the state). In some cases, people may not become eligible for the program until a traumatic event happens. Or they may not realize they were eligible, may still be awaiting approval of an application, may have difficulty enrolling, may get caught in a bureaucratic delay, or may simply not sign up for the program as soon as they’re eligible for whatever reason. Determining Medicaid eligibility can be a cumbersome, daunting, and time-consuming process (even more so if the new enrollee has just suffered a health crisis). Under the current rules, a Medicaid-eligible person who suddenly had a catastrophic health event could be covered even if for whatever reason they had not yet been enrolled in the program.
This system of retroactive eligibility also protects the hospitals and medical providers, who would otherwise be slapped with uncompensated care costs, holding the bag for uncollectable bills on poor, uninsured patients.
The state’s waiver request half-heartedly made some dubious assertions that the request is somehow a special form of streamlining related to the state’s unusual “private option” approach, which uses Medicaid funds to purchase private health insurance for beneficiaries. In fact, this is about cost-shifting, plain and simple. The change will save the state some money (a projected $1.3 million in the next fiscal year according to the Department of Human Services), while hospitals and providers will see uncompensated care costs go up and poor Arkansans will be slapped with bills they can’t possibly pay. The federal government, which pays for most of the costs of the Medicaid expansion, projects to save about $19.5 million, according to the DHS. In addition to the mild government cost savings, the change has the more important purpose of allowing GOP politicians to vaguely opine on personal responsibility.
That nearly $20 million that the feds save will likely be borne by hospitals and medical providers in Arkansas, a point made by Rep. Deborah Ferguson. Andy Davis at the D-G reported on yesterday’s meeting:
“We’re saving 1.3 [million dollars], but in order to save 1.3 [million dollars], we’re actually costing the state 20 million [dollars] in federal funds that would go to hospitals and providers, is that right?” Ferguson asked.
Bo Ryall, chief executive of the Arkansas Hospital Association, said the 30-day period is an improvement over the reduction the state initially proposed — the first day of the month an application is received — but it will still leave hospitals with more unpaid bills.
During the public comment period last month, Disability Rights Arkansas raised objections to the change. From its letter:
A reduction in the retroactive eligibility period accomplishes nothing but increasing the financial burden on those who are already struggling with expensive and unforeseen medical emergencies. Additionally, it increases the financial burden on healthcare providers and the state by increasing the amount of uncompensated medical care costs in the state. Healthcare costs are already a significant driver of debt and bankruptcy, both in this state and nationwide, and it makes little sense to roll back protections meant to protect disadvantaged Arkansans.
DRA also points out that if the state actually wanted to streamline the eligibility process, it could enact a presumptive eligibility system — allowing certain entities to make an immediate, temporary eligibility determination. Implementing that system had been part of the Obama administration’s conditional approval for the state’s previous request to roll back retroactive eligibility.
Instead, for the sake of a little grandstanding, the state will just shift a fraction of health care costs back to hospitals and poor people.
The change, slated to go into effect on May 1, now awaits final approval later this month from the Legislative Council’s Rules and Regulations subcommittee and the full Legislative Council.
p.s. Here’s more on the issue from a report earlier this year by Arkansas Advocates for Children and Families:
Medical emergencies are unpredictable and costly. The current 90-day retroactive eligibility policy helps ensure that low-income families don’t incur burdensome medical debt that they are unable to pay. It covers any medical debt incurred three months prior to enrollment in Arkansas Works. Health care providers and the state also benefit from retroactive eligibility. Doctors and clinics are not left with unpaid bills for treatment they’ve provided. This means providers and the state both save money in reduced costs of uncompensated care.
A similar request to waive retroactive eligibility was part of the waiver request from 2016. Arkansas received conditional approval to eliminate retroactive eligibility for Arkansas Works enrollees, contingent on changes to Arkansas’s process of determining eligibility. One of these changes is the implementation of “presumptive eligibility,” a state policy option that allows qualified entities to make temporary eligibility decisions based on, among other criteria, an assessment of family income.
Presumptive eligibility allows states to enable established community-based providers to make on-the-spot decisions regarding eligibility. Some agencies that other states currently certify to conduct presumptive eligibility checks include Medicaid and CHIP health care providers, elementary and secondary schools, and Head Start programs. In Arkansas, presumptive eligibility currently only exists for pregnant women. This should at least be expanded to the Arkansas Works population before any elimination of retroactive eligibility occurs.