DHS says Medicaid transformation has met five-year savings goal; committee probes details

Department of Human Services officials presented quarterly scorecards showing that Arkansas has met and exceeded the Medicaid transformation target set by the Healthcare Task Force.

"We have exceeded the $835 [million] with two quarters yet to go," Dennis Smith said, summarizing the department's figures and telling members that, through the period shown, reduced spending compared with baseline projections totaled roughly $1.172 billion. DHS cautioned that their numbers represent reduced spending relative to a projected rate-of-growth baseline rather than a separate cash "savings" account.

Officials highlighted savings across several categories: developmental disabilities, behavioral health, long-term services and supports, pharmacy (which exceeded a target of $250 million, DHS said), dental, and the capitated PASS program. They described how PASS converts many services into a per-member-per-month capitated payment with a managed-care risk corridor and said settlements had been used to meet medical-loss-ratio targets.

Members asked for detail on whether savings reflected quality improvements versus service reductions, how PASS rates and community investment dollars are being used, and whether ARWorks budget neutrality remains intact. DHS said the savings tracked against the Task Force baseline and that Arkansas Works PMPM remained below its budget-neutrality threshold for the year.

DHS agreed to provide follow-up documents on revenue recognition, the distribution of community investment funds by pass, and further detail on the calculations behind reported PMPM figures.

Provenance: DHS transformation scorecard presentation and Q&A (SEG 2674'SEG 3072).