Arkansas Teams Up With Private Insurers To Overhaul State Medicaid Program

Continuing the post-Obamacare trend toward efficient cooperation between governments, private insurers, and care providers, Arkansas is kicking off a first-of-its kind Medicaid reform program. The state will partner up with its two largest insurers, Blue Cross Blue Shield and QualChoice, in an attempt to provide medical cost transparency to practitioners, increase the efficiency and quality of care for the state’s low-income residents, and hopefully stave off a projected $400 million deficit in the program.

As Kaiser Health News reports, the new plan — dubbed the Healthcare Payment Improvement Initiative — hopes to lower costs by providing doctors with up-to-date data on the average cost of treating Arkansas’ most common medical conditions, as well as creating an incentive structure for doctors’ Medicaid reimbursements:

The Health Care Payment Improvement Initiative is a shared-savings plan that begins to move the state and private insurance market away from a traditional fee-for-service payment system, to one in which providers are paid based on how well they deliver care and manage their costs. But it isn’t a move toward managed-care, either. Instead, it’s taking the health care delivery system that is already in place and adding new incentives and accountability. […]

“It’s actually been very gratifying,” [Arkansas Department of Health and Human Services Director John M.] Selig said. “We’ve had providers call us and say, ‘Can you tell me what these other services cost that I’ve been ordering because I’ve never really worried about that.’ Now they are seeing their reports and some of them are saying, ‘I actually want to understand these costs and if I can manage those costs better and still provide good care, I’m happy to do that.’”By collaborating with the private plans, Medicaid is able to accomplish changes on a scale it may not have been able to do alone, said Selig. The goal, he added, is not to set prices. Instead, he said, “we are all just trying to give consistent signals to the providers,” so they can monitor their spending.


“It’s a work in progress,” Governor Mike Beebe told Stateline news service. “It could be that we need to tweak it and make changes as we see the need. We don’t in any way want to direct doctors or hurt their ability to deliver quality care.” But doing nothing, he says, is not an option.

The Healthcare Payment Improvement Initiative tackles a major source of medical inflation and health care inefficiencies — namely, the lack of transparent information in the medical field. Simply by consistently releasing information about care costs, Arkansas may be able to goad its medical practitioners into cutting costs while maintaining the flexibility to provide quality care. If successful, this effort could go a long way towards fortifying the state’s Medicaid program, which currently insures over a fourth of the state’s residents.