Will insurance companies save the day on the Medicaid verification mess? | Arkansas Blog

Will insurance companies save the day on the Medicaid verification mess?

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***UPDATE: DHS has confirmed. See this post. There is one important wrinkle, however: only pharmacy coverage is immediately reinstated. In other words, if beneficiaries try to get medication, they will be able to. If someone turns out to be eligible, the insurance companies will pay for all claims, both pharmacy and non-phamaracy (and DHS will reimburse via paying back the August premium). If someone turns out not to be eligible, the insurance companies will cover pharmacy costs but not non-pharmacy claims. In that scenario, the provider would bill the patient for non-pharmacy services (again, this would only come up if it turns out that the patient is found not Medicaid eligible). ***

Original post: 

The Times has heard from numerous sources closely involved in the process, both in and out of state government, that at least two of the major insurance companies covering private option beneficiaries will reinstate policies cancelled during the last month because of the state's troubled Medicaid verification system.  

After negotiations with state officials, Blue Cross Blue Shield and Centene (selling in Arkansas as Ambetter) would unilaterally reinstate beneficiaries who had plans cancelled on August 1 or later due to failing to reply within the 10-day deadline to income verification letters, sources say. The private insurance companies would pick up the tab, without asking for reimbursement, for any claims by these beneficiaries if they are not determined eligible or if they never respond at all. DHS would reimburse the insurance companies for the August tab if in fact they are determined eligible. (Here's where the details get murky, but the reimbursement would likely be for the cost of the August premium if there was a claim, not for the claim itself.)

Insurance companies, presumably, wouldn't agree to this deal unless they were confident that the overwhelming majority of those with coverage terminated were in fact eligible. This is precisely what we've been reporting is likely the case, and establishes the dire stakes for a troubled system and policy that led to a vast wave cancellations

The major concern for state officials: gaps in coverage for people that need vital medication. Federal law gives a 90-day window for beneficiaries to respond with income verification paperwork and get reinstated after having coverage terminated for failure to respond in time — so there's reason to hope that most of the eligible beneficiaries kicked off will be able to get back on and get retroactive coverage. But that's cold comfort to beneficiaries suddenly unable to get needed medication now, a scenario with potentially tragic consequences. That's where this deal, if it comes together, could help to save the day. 

Qual Choice, the other carrier selling plans to the private option, has been resistant to the deal, sources say. 

Note: this would only impact the private option, as opposed to people covered by the traditional Medicaid program. The private option uses Medicaid funds to purchase private plans, so in this scenario the private companies are essentially choosing to offer the plans for the month of August without charging upfront premiums at all to the Medicaid program. They'll take on the risk of paying claims for anyone who turns out not to be Medicaid eligible. The overwhelming majority of beneficiaries who had plans cancelled are private option. But there would still be a subset of folks at risk even if this plan comes to fruition — those covered by the traditional Medicaid program. 

I have asked representatives from Blue Cross, Centene, and QualChoice for comment, as well as DHS, and will update if I hear back. 


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