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DHS releases sustainability report detailing options for delivering Medicaid services

03/29/2024

(LITTLE ROCK, Ark.) — Today the Arkansas Department of Human Services (DHS) is releasing a comprehensive analysis of the Medicaid system that details a variety of different service delivery options for controlling spending while maintaining or improving Medicaid services in the coming years.

The Medicaid Sustainability Review report has been posted on the DHS website and is available by clicking here. DHS will now collect feedback from legislators, stakeholders, providers, beneficiaries, and others about the options included in the review.

“Medicaid provides health care to more than 850,000 Arkansans, and we have a responsibility to ensure that it is optimally structured and financially sustainable so that these services continue well into the future for those who rely on them,” said DHS Secretary Kristi Putnam. “We appreciate the chance to discuss different paths laid out in this report and look forward to working with our many partners to determine which options make sense, and which don’t.”

The review, which was conducted by a contracted vendor between March 2023 and March 2024, was commissioned by DHS to identify potential ways to address concerns about a steady increase in the cost of operating the Medicaid program. Between State Fiscal Year 2018 and State Fiscal Year 2023, the annual cost of operating the Medicaid program increased by 41 percent.

The report also takes into account an impending decrease in the federal match rate. The percent of federal funds that pay for Medicaid services will fall from 72 percent to 71.14 percent on October 1, which means state general revenue funding will have to pay a higher share of the cost.

The review included assessments of DHS data and documentation, interviews with agency officials and partners, and scans of national leading practices. It focused on possible program modifications, but not individual provider rates. Focus areas included: the Arkansas Health and Opportunity for Me (ARHOME) model; Provider-Led Arkansas Shared Savings Entities (PASSEs); inpatient and outpatient services, payment types (supplemental payments, cost settlements, and access payments); long-term services and supports; pharmacy benefits; non-emergency medical transportation services; and more. A full list of these focus areas is available on page 4 of the report. 

Each option outlined in the report includes an overview, the potential estimated cost savings, the steps and timeline to implement, and information from other states. The options are a broad array of possible paths but are not recommendations by the vendor or DHS. No determination has been made to move forward on any specific option.

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