LITTLE ROCK — Ideas that Republican legislators have proposed for addressing a nearly $300 million Medicaid shortfall, such as reducing waste and making recipients pay co-payments or take drug tests, would not be enough to eliminate the looming deficit and could backfire, Arkansas’ surgeon general said Tuesday.
Republican legislative leaders maintained their ideas can be part of the solution to the shortfall.
Surgeon General Joe Thompson addressed the GOP proposals during a talk on Medicaid at the University of Arkansas Clinton School of Public Service. As he has previously, Thompson expressed support for a mostly federally funded expansion of the state Medicaid program, the creation of a state-run insurance exchange and Gov. Mike Beebe’s plan to revamp the state’s system for paying health care providers.
The government health program for the poor, the elderly and the disabled is projected to see a $298 million shortfall in the fiscal year that begins July 1, largely because of a decline in the matching rate of federal Medicaid funding to Arkansas. Because Arkansas’ per capita income has increased, the federal government has lowered its matching rate to the state from 78 cents on the dollar to 70 cents.
Some state lawmakers have suggested saving Medicaid dollars by creating a system of co-payments that would give Medicaid recipients an incentive not to seek unnecessary treatments. Thompson expressed concerns Tuesday about that approach.
"(There is) a false sense that fraud and abuse is rampant in our Medicaid program and that co-payments would somehow reduce that. I don’t doubt that we have some fraud and abuse and we need to actively search that out and eliminate it in a targeted drone-like strike," he said. "But to carpet-bomb the whole system to get those specific issues is kind of the wrong thing to do."
Thompson said the federal government tends to be restrictive against applying co-payments to lower-income people. He noted that when co-payments are applied to preventive services, people tend not to use those services.
"The last thing we want to do with a relatively unhealthy population is make them use preventive care less," he said. "So we don’t want to put broad co-payments on."
Thompson also said that when a patient cannot receive a service and cannot afford to pay a co-payment, it is the provider who loses.
"It’s essentially a cost shift to the provider," he said.
Some GOP legislators have suggested requiring drug testing of Medicaid recipients. Thompson had qualms about that idea as well.
"If the issue of drug testing is to identify someone with a problem, get them into care and get them treatment so they no longer have an issue, then I think that’s something that is a potential benefit," he said. "If the issue is to be punitive and to say, ‘Because you have a problem you therefore do not get a benefit,’ that to me seems to be shortsighted."
Talking to reporters after his speech, Thompson said reducing waste, creating co-payments and requiring drug tests could save money if they are implemented in a way that secures healthier outcomes for Arkansans, but "they are not going to generate immediately a savings that fills the budget shortfall."
Incoming Senate President Pro Tem Michael Lamoureux, R-Russellville, said Tuesday he agrees with Thompson that the ideas legislators have suggested would not solve the shortfall on their own, but he said he believes they can be part of the solution.
"You can either be focused on defending the status quo or you can be focused on how you’re going to improve it. I think that our focus is trying to reach an agreement, a bipartisan agreement, that improves the system," Lamoureux said.
Republican House Caucus leader Bruce Westerman, R-Hot Springs, said he believes co-payments and drug testing can be implemented in a beneficial way.
"Somehow you’ve got to get skin in the game with the beneficiaries," he said.
Regarding drug tests, Westerman said a one-time offender should get help and should not be denied services, "but you wouldn’t want habitual offenders on it either."