Update on the Effects of Arkansas’ Private Option Plan

May 21st, 2014 | By admin | Category: Community

White County Medical Center (WCMC) is projected to experience a $66 million decrease in Medicare reimbursement over the next six years due to the Affordable Care Act and sequestration. The Medicaid Private Option Program, approved by the Arkansas Legislature and Governor, offers greater coverage for uninsured Arkansans through commercial insurance carriers. This expansion in covered lives provides WCMC with $15 million in increased revenue over the next six years.

“The funds gained from the expansion certainly do not make up for the cuts to Medicare reimbursement, but it is critically important for our hospital and the patients we serve,” said WCMC President/CEO Ray Montgomery.

In the first four months of the Private Option Program, there has been a 50 percent reduction in uninsured visits to the Emergency Department. Also, during the same period, inpatient admissions of uninsured patients have dropped by 50 percent. Both commercial insurance and Medicaid showed corresponding increases. This early trend provides evidence that the program is working the way it is intended. As of April 2014, enrollment in Arkansas’ Medicaid Private Option Program has increased to 166,107 citizens.

“We have seen WCMC’s service area cover 11,108 additional lives. White County has enrolled 3,924 qualified individuals,” Montgomery stated. “We serve many working poor in our region. Over the past two years, the hospital has provided $10.7 million and $11.6 million in charity care. Additionally, across the state 50 percent of personal bankruptcy debt is due to medical bills.”

The Common Wealth Fund, based at the Institute for Healthcare Improvement in Cambridge, Mass., recently reported a scorecard on state health system performance for 2014.  The report shows, in summary, that Arkansas is in the bottom quartile ranking at 50th, dropping from 49th in 2009.

“The Private Option Program offers health coverage for the poorest in our state who currently have no health insurance,” Montgomery said. “This gives Arkansas the best opportunity to move up in these rankings. Access and affordability, as well as preventative health and wellness care offers the most viable strategies for improving the quality of life for Arkansans. This results in the most cost effective manner in which this ranking can improve.

Hospitals are desperately trying to address the expected decreases in reimbursement. A number of hospitals have reported employee layoffs this past year. What has not been reported are the vast majority of hospitals that are cutting back on employees or Full Time Equivalents (FTE’s).  WCMC has reduced its staff by 20 FTE’s in the past year through attrition. In other words, these positions were not replaced after people left.

“I am disappointed to hear from a small, but vocal group of candidates who are running for Legislative offices across the state who claim to understand the issues. What they are getting support for is being against ‘Obama Care’. They do not realize they are really fighting against a Private Option Program that improves care for our needy citizens, provides insurance coverage through existing ‘Private’ commercial insurance avenues, and protects hospitals and jobs. As long as the Affordable Care Act is the federal law, our state is working hard to make lemonade out of a lemon,” said Montgomery.

ABOUT WHITE COUNTY MEDICAL CENTER

As the leading healthcare provider in a six-county area, White County Medical Center associates strive to improve the quality of health and well being for the communities it serves through compassionate care. White County Medical Center is the largest employer in a six-county area with more than 1,750 associates. The facility has a combined total of 438 licensed beds and a medical staff of 150 physicians that specialize in various areas of healthcare.