At a public comment hearing Monday in Little Rock, several assisted living providers told officials from the Arkansas Department of Human Services that a planned 21.7 percent cut to their daily Medicaid reimbursement rates will lead to layoffs, reduced quality of care and the closure of facilities around the state. The rate cut will go into effect in January if approved by a legislative committee later this year.

Assisted living facilities are residential facilities that are a step below nursing homes in terms of the level of care they provide. The DHS pays between $70.89 and $85.35 per day for a Medicaid beneficiary in assisted living. That would decrease to a flat $62.89 next year if the rule change was approved. Mark White, the DHS deputy director for Aging, Adult and Behavioral Health, said in an interview earlier in October that the current rates aren’t backed up by any actuarial study, as required by federal Medicaid authorities.

The current rates, White said, “were negotiated several years ago with the industry. [The federal Center for Medicare and Medicaid Services] has made it clear they want an actuarial study to support these rates, to show they’re appropriate. … So we had our contracting actuary do a study. They looked at provider costs, and this is the recommendation they came back with.”

Assisted living providers dispute the findings of the actuary and say the study didn’t properly consider overhead. The $62.89 per day figure “is an arbitrary number,” according to Michelle Joyner of Village Park, a facility in Conway. Joyner spoke at the Monday hearing.

Assisted living providers are being asked to sell their services “at cost,” she said. “The only explanation is that Medicaid and [the DHS] are considering driving assisted living waiver businesses out of business.”

The assisted living rate is just one of several proposed rule changes coming to Arkansas’s Medicaid programs that provide “long-term services and supports” to the elderly and people with physical disabilities. The DHS also plans to adopt a new method of allocating attendant care and personal care hours for ARChoices, a Medicaid waiver program that allows beneficiaries to receive services in their own home. (The current allocation method is the subject of a lawsuit brought against the state by ARChoices beneficiaries who said the DHS unjustly cut their care hours.) It’s switching to a new assessment tool to be used across all such programs.

The providers and family members who spoke at Monday’s public comment hearing were affected by different components of the proposed changes, but all expressed anxiety about the direction these services were heading. Most said they were concerned the new rules and rate cuts would result in disabled and elderly people losing their options for independent living.

“DHS says they want to avoid people having to go in nursing homes. It seems in these programs they’re doing everything they can to force people into [them],” Bobbie Riffle of Sherwood said. Riffle’s daughter is now in an assisted living facility, but she was previously on the ARChoices program until a decrease in her care hours made it too difficult for her to keep living at home.

“We have struggled, really struggled over the past two years,” Riffle said.

Demand for assisted living appears to be high: White said there’s a waiting list for the state’s waiver program that allows Medicaid to pay for assisted living for qualified beneficiaries. There are only 1,300 slots available. In addition to Medicaid beneficiaries, many facilities also serve “private pay” residents — individuals who pay costs out of pocket.

Lenora Riedel runs Countryside Assisted Living, a facility in Huntsville that serves 92 residents, 56 of them on Medicaid. She said at the Monday hearing that the reduced rate would force her to cut back her 48-person workforce by 25 percent. That means nursing staff would be required to pick up housekeeping, laundry and other duties, she said, while also handling a significantly larger patient load.

Riedel said the actuarial study indicates a facility should have 19 staff for 50 residents. She said that’s not enough to deliver “the quality of service that we want to provide.” But, she added, “if we do not cut staffing by 10 to 14 people — which is what the standards say that we should do to survive the 21.7 percent cut — we would close down. That will force 92 people into a facility — or into a home where they cannot take care of themselves.”

When asked whether the DHS was concerned about assisted living facilities closing, White acknowledged that some providers are struggling, but he said the cause was less clear.

“There have been a number of facilities that have been built in recent years … as private-pay facilities,” White said. Some of those struggled to find enough private pay business to make ends meet, he said, and therefore have tried to access Medicaid, only to find there’s a limited number of potential residents due to the cap on the waiver. “We don’t know how much that’s a Medicaid issue and how much that’s an issue on their private pay side,” he said.

White said in an email that the proposed fiscal impact of the rule change package as a whole is a savings of $9.27 million to the state for the current 2019 fiscal year and $13.92 million for the next fiscal year.

The Monday hearing was the fourth in a series of five hearings on the proposed long-term services and supports rule changes. The final hearing is in Jonesboro on Nov. 7.

This reporting is made possible in part by a yearlong fellowship sponsored by the Association of Health Care Journalists and supported by The Commonwealth Fund. It is published here courtesy of the Arkansas Nonprofit News Network, an independent, nonpartisan project dedicated to producing journalism that matters to Arkansans. Find out more at arknews.org.