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Ark. Medicaid faces 'significant' cuts in services

Associated Press Modified: November 14, 2012 at 12:22 am •  Published: November 13, 2012

LITTLE ROCK, Ark. (AP) — Arkansas would stop paying for thousands of seniors in nursing homes, eliminate an insurance program for low-income workers and cut rates for providers to fill a $138 million shortfall in the state's Medicaid program, even if lawmakers support a proposal to boost funding, an official said Tuesday.

Department of Human Services Director John Selig told members of the Joint Budget Committee that the cuts are needed to make up for a deficit in the state share of its Medicaid program, which serves nearly 800,000 Arkansans. The shortfall grows to $460 million, when factoring in the amount of federal funding the state receives through a match.

Gov. Mike Beebe has proposed $160 million in new state money for the program, with $90 million coming from general revenue and $70 million from the state surplus to help. A lower than expected growth in the program's costs and other savings kept the shortfall lower than officials initially expected, Selig said.

The budget proposal also factors in $15 million that DHS says Medicaid will save next year through an effort to curb the program's costs by changing the way it pays for services.

"The good news is we have made some significant progress on our Medicaid shortfall," Selig told the panel as it opened its hearing on the department's budget. "We've still got quite a ways to go, and we're facing some very significant reductions in Medicaid."

The biggest cut would be eliminating the lowest level of nursing home care the state pays for seniors in nursing homes. The reduction would affect 10,000 to 15,000 seniors and would save the state $35 million.

The agency proposed eliminating ARHealthNetworks, which was created in 2006 to provide health insurance to low-income workers through their employers. About 17,000 workers are enrolled in the program, which is funded by a combination of state and federal funds under Medicaid.

Selig said that many of the workers enrolled in the program could participate in a health insurance exchange that will be set up through the federal health care law or under the expansion of Medicaid eligibility that Beebe hopes lawmakers will approve. DHS also proposed eliminating all non-emergency dental services for adults under Medicaid.

Combined, the service eliminations or freezes are expected to affect roughly 75,000 people who are on Medicaid in the state.

DHS's proposal also called for freezing the rate hospitals, nursing home and other facilities receive from Medicaid, while other providers will see a 3 percent cut form the program. The Department is also proposing placing other parts of Medicaid under more scrutiny. For example, families will have to receive state approval to fill more than 6 prescriptions a month for their children under the ARKids First insurance program.

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