LITTLE ROCK — A legislative task force voted Thursday to adopt a report recommending measures its authors say could save the state as much as $963 million in Medicaid costs over five years.
The Health Reform Legislative Task Force adopted, with no objections, the report by The Stephen Group of Manchester, N.H., a consulting firm that has been meeting with the panel for the past two years.
Last year, the task force endorsed Gov. Asa Hutchinson’s plan to seek approval from the federal government to make changes to the state’s Medicaid expansion program and find ways to save at least $835 million in the overall Medicaid program to cover the state’s share of the cost of the expansion program.
Commonly known as the private option, the Medicaid expansion program will be renamed Arkansas Works under Hutchinson’s plan, which received federal approval last week. The program provides government-subsidized private health insurance to more than 300,000 Arkansans with incomes up to 138 percent of the federal poverty level.
The Stephen Group calculated estimated savings by comparing a 5 percent annual growth rate in Medicaid over five years to projected costs over the same period if reforms are implemented.
At a 5 percent annual growth rate, total Medicaid costs would increase from $7.1 billion in the current fiscal year to $9.1 billion in fiscal 2022, according to the report.
The report estimates that changes that have been proposed or are already being implemented would cause Medicaid costs to increase only to $8.9 billion in 2022, for a total savings over five years of $963 million.
Among the changes recommended in the report are caps on therapy for the developmentally disabled; reforms aimed at reducing the number of people being treated in psychiatric hospitals; reforms aimed at reducing pharmacy costs; and the use of managed-care companies to provide dental benefits.
The report estimates that the state could save $1.3 billion over five years if it allowed managed-care companies to provide services to the developmentally disabled and the mentally ill. The report stops short of making a recommendation on the issue, which has divided legislators.
The task force put a few finishing touches on the report Wednesday before approving it Thursday. Co-Chairman Rep. Charlie Collins, R-Fayetteville, told reporters Wednesday that at the beginning of the process, he was concerned that the effort to identify at least $835 million in savings would come up short.
“What we’re seeing is, there are some elements that are now not only not coming up short but maybe even doing more than we thought we were going to originally be able to get,” he said.
Asked if the state’s Medicaid recipients should be concerned about cuts in services, Collins said that on the contrary, “they should breathe a sigh of relief that the governor and the Legislature in Arkansas has their back to make sure that we have a sustainable program to take care of the truly needy.”
With the adoption of the report, the task force has completed its mission and is not expected to meet again.