Beebe gets federal nod to pursue medicaid changes

Editor’s note: Roby Brock, with our content partner Talk Business, wrote this report. He can be reached at roby@talkbusiness.net

Gov. Mike Beebe's spokesman Matt DeCample said that federal officials have given Arkansas "conditional permission to proceed" with proposed changes to its Medicaid program.

DeCample said that U.S. Health and Human Services representatives have given "preliminary word" that the state can pursue altering its "fee-for-services" system of Medicaid payments.

"We've gotten strong indication of support from them to pursue the course we started," DeCample said. He added that state officials are waiting for a formal letter to confirm details.

Beebe wants to change Medicaid's "fee-for-service" model and move to a more holistic approach to managing health care through the entire system. He contends that changing the system could corral costs and produce better health outcomes. The Governor has warned that the state could be facing an $87 million budget shortfall by FY 2013 if changes are not made.

In a recent radio address, Beebe noted that the current health care payment system emphasizes treatment over results.

"If you are a health care provider, you are compensated based on the volume of tests, treatments and referrals you can administer," he said. "In Arkansas, we want to put greater emphasis on results, to base more payments on making patients better, not just treating them as much as possible."

One of the major reforms Beebe wants to try involves the creation of "medical homes" or "health homes." These "homes" would create care-taking teams throughout the state. Their efforts would stress more comprehensive, holistic health care treatments versus the battery of tests and referrals now deployed throughout the system.

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But how much could be saved if the pay model was overhauled? That's a question that no one — not even the Governor — is sure of.

"What we're trying to do is change the whole paradigm for the way we pay for some of this stuff, to get some more predictability in it, and to also address some of the shortfalls of the 'fee for service' model. I think 'fee for service' is an obsolete concept that this country can no longer afford," Beebe said in March.

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