Arkansas Legislative Council

December 16, 2022

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Rep Wardlaw: Members, if we would, keep the order. Before we go into today’s business, I’m going to recognize the chairs of Public Health, Senator Irvin and Representative Ladyman to make a special presentation. Members, you are recognized.


Rep Ladyman: Thank you, Mr. Chairman. I’d like to have Phil Price to join us down here at the table, if you would. Members and audience as well, Phil has decided to retire and take it easy for a while. So wish you well in that retirement, Phil, but we wanted to recognize your service to the state and especially to Public Health and other committees here. And we have a citation for you. It’s very well written, so I want to read this, if I might, Mr. Chairman. Whereas, Mr. Phil Price, now retires from the Arkansas Bureau of Legislative Research on December 31, 2022, after 40 years of dedicated service in state government. Whereas, Phil received his bachelor’s degree in history and political science from Hendrix College and received his master’s degree in public administration from the University of Arkansas. And whereas, Phil joined BLR in 1997. He served in multiple roles during his career, including special advisor for welfare workforce, administrator for committee staff services, and senior legislative analyst. He served as staff for many legislative committees, including Public Health, Welfare and Labor, Health Insurance Marketplace Legislative Oversight Subcommittee, Health Reform Task Force, Judiciary Committee, and Public Transportation Committee. You’ve done a lot of work, Phil, a lot of work. Whereas, Phil assisted countless legislators, agency professionals, and members of the public with participation in the legislative process. His devotion, institutional knowledge, and insight are invaluable to the committee staff section and to the Bureau of Legislative Research. And whereas, the House of Representatives of the 93rd General Assembly of the State of Arkansas takes great pride in recognizing Phil Price for his many years of service to the state of Arkansas and wishes him well in his retirement.


Rep Ladyman: Thank you, Mr. Chairman.


Rep Wardlaw: Thank you. And Phil, Public Health, will never be the same without you. So members, with that, we’ll take a motion for the approval of the minutes. Got a motion and a second. All those in favor say aye.


Committee members: Aye.


Rep Wardlaw: Ayes have it. Motion approved. With that, we’ll go to Dr. Silva for the November revenue report.


Monthly financial report

Silva (BLR): Okay. Thank you, Mr. Chairman. Carlos Silva, Bureau of Legislative Research, Legislative Economist. So today, we’re going to talk about item D on your agenda. That’s the November 2022 revenue report. So for gross general revenues, year to date, we have $3.372 million. There’s an increase of $195 million, which is 6.2% above last year collection of the fiscal year. As we start looking down, we’re going to see a net general revenue available for distribution at $2.927 million, which is 5.6% above distribution for November 2021. As we move to page number 2, we’re going to see the cumulative deviation from the DFA net general revenues available for distribution forecast. And I want to take a second so we can talk about this. As you look into this month, November, it doesn’t mean that there’s any money that has been lost. It just means that they reset the initial months, the initial four months. So as you look into the month of November, we are $12 million above the forecast. So as this moves forward, we’re going to be looking at this forecast for November 2022. From page 3 to page 5, you’re going to take a look at the total general revenues. And from page 6 to page 10, we’re going to have the selected special revenues. We are still following the trend of our nearby states when you look into the first five months of this fiscal year, and there’s no major changes. With that, I’ll take any further questions. Thank you.


Rep Wardlaw: Any questions from the members? Seeing none, thank you, Dr. Silva, for the report. So members, with today being the last meeting for some members, I’m going to recognize the president pro tem and the speaker to give a special recognition for members’ last meeting. Senator Hickey, you’re recognized first.


Sen Hickey: Thank you, Mr. Chair. If any of our senate members that are with us today, if they are not going to be with us during this next session, if they would, I’d wish, I’d ask for all of them to please stand at this time to be recognized. And just going to say a little word, just real short here. We started this with a motto in the Senate in the back room is iron sharpens iron. And what I’d have to say with all of these folks, we’ve been through a lot, and they’ve sharpened me to the point that some times I think they broke the edge off of me. But the thing is– this is not a political statement– I love each and every one of these guys, as does our other members, and we thank you. And if you all would please give them a round of applause.


Rep Wardlaw: Thank you, Senator. Speaker Shepherd, you’re recognized.


Rep Shepherd: Thank you, Mr. Chairman. And likewise, I would ask the members of the House who are leaving our body at the end of the year, if you’d stand at this time. And I would just echo Senator Hickey’s statements. One of the things that has become very apparent to me over 12 years here in the House is that you spend a lot of time with your fellow House members, and that you develop really close personal bonds with the members that you serve with, regardless of party or ideology. You spend a lot of time here. And as I look back, particularly on this group, and you think about the challenges that we faced during COVID over the past number of years and how things were kind of turned upside down, and we had numerous special sessions and many, many long meetings here in ALC, but ultimately, everyone here contributed to the betterment of the state of Arkansas. And each one here worked very hard on behalf of their constituents and all Arkansans. And so at this time, I would like to recognize them, thank them for their service, and wish them well in their future endeavors.


Rep Wardlaw: Thank you, guys. And with that, we’ll go to Senator Rice for the Executive Subcommittee report.


Sen Rice: Thank you, Mr. Chair. The ALC Executive Subcommittee met on Thursday, December 15, reviewed and approved emergency rules regarding school safety for the Department of Education. The subcommittee also authorized BLR to enter MOUs with institutions of higher education and EBD regarding data to be provided to the Segal Group for preparation of fiscal impact statements on legislation required by Act 112. And Mr. Chairman, I’d move for adoption of the report.


Rep Wardlaw: That’s a proper, motion. Do I have a second? Have any discussion on the motion? Seeing none, all those in favor say aye.


Committee members: Aye.


Rep Wardlaw: All those opposed?  Ayes have it. With that, we’ll move on to the standing committee reports. And with that, we’ll go to Rules first.


Assisted living rate adjustment

Rep Eaves: Eventually. Thank you, Mr. Chairman. The Administrative Rules subcommittee met on Thursday, December 15. The subcommittee filed a report of the ALC Medical Marijuana Oversight Subcommittee concerning its review of a rule concerning medical marijuana. The subcommittee approved two agency requests for the expedited repeal of rules not meeting the definition of a rule under the Arkansas Administrative Procedures Act pursuant to Act 65 of 2021. Pursuant to Act 1076 of 2021, the subcommittee reviewed a recommendation report from the House and Senate committees on Agriculture, Forestry, and Economic Development, relating to the review and sunset of state agency rules pertaining to milk and cattle production. The subcommittee voted to accept the agency’s final rule reports such that the rules therein shall remain in effect. And pursuant to Act 517 of 2019 and Act 595 of 2021, the subcommittee received agency updates on outstanding rulemaking. The subcommittee filed one December monthly written update pursuant to Act 595. And at the agency’s request, two rules by the Department of Human Services were pulled from consideration prior to the meeting. The subcommittee reviewed and approved one rule from the Department of Human Services, with a change by the agency to exempt federally qualified health centers. And all other rules were reviewed and approved as noted in the report. And I move adoption of the report.


Rep Dotson: Thank you, Representative. Before we move forward with this, Chairman Wardlaw has put a letter in disclosing that he is recusing himself from voting on this rule at the meeting of Legislative Council. It’s a proper motion. Before I take a motion– sorry. Before I take a motion, I have some questions, looks like. Representative Eubanks, you’re recognized.


Rep Eubanks: Thank you, Mr. Chair. I have a substitute motion.


Rep Dotson: Let’s hear your substitute.


Rep Eubanks: I move that we adopt the report with the exception of the DHS medical services rule regarding living choices waiver rate adjustment, which should be referred to the JBC Rules subcommittee next month.


Rep Dotson: Right. Looks like I’ve got some other questions in the queue. Before I take that motion, I’m going to take some other questions. Senator Hester, you’re recognized. Are there any questions, or?


Sen Hester: I was just seconding Eubank’s motion.


Rep Dotson: Okay. Representative Fite, do you have any questions?


Rep C Fite: Yes. Thank you, Mr. Chairman. To say that I’m frustrated by this motion is an understatement. We have been working on this for years with DHS to do a study with the assisted living providers and get their rates to a reasonable standard. And I would remind you that we’ve put special language in the DHS budget last session that called for an independent third-party to study the rates. They did. And this is the recommendation that was brought before you today. This is not something overnight. This is something that we have worked on for a long time. We have assisted living centers all over the state that are on the verge of closing. Most of these are in rural areas, in your areas. So I would ask you, please do not do this. Let this go forward. Some of the centers that are about to close have loans that are guaranteed by the ADFA. This is going to be a mess, so please reconsider.


Rep Dotson: Thank you, Representative. Senator Hammer, do you have a question? Okay, Senator Hammer, question on the report.


Sen Hammer: Just clarification, you’ve not taken the motion, correct?


Rep Dotson: There’s been no motions taken so far.


Sen Hammer: I’d like to ask Mark White then to come to the table for questions.


Rep Dotson: Mr. White, if you would state your name for the record.


White (DHS): Thank you, Mr. Chairman. Mark White, Secretary, Department of Human Services.


Rep Dotson: Senator Hammer, you’re recognized for a question.


Sen Hammer: Thank you, Mr. Chair. Just some timetable dates, if you would. When do you anticipate, or do you have any indication from CMS as to when they will approve the request involving the rate increase?


White (DHS): What we’ve heard informally from the regional staff that we work with is they are expecting an approval to come down any day now. Now, I will say there have been times when that regional staff have told us things that didn’t happen. But by and large, I think they probably have a relatively accurate estimate of that.


Sen Hammer: And what happens if this rule doesn’t get out of here? What’s that look like in the future as far as the rates? And we’re under the public health emergency. Just talk about that for a second, if you would, please.


White (DHS): Sure. And let me correct a statement that I made in Rules Committee yesterday, because after the committee, I learned I had some incorrect information. The appendix K, which is what currently has a temporary rate in place– and I say appendix K, that’s the procedure we use to get permission from CMS to temporarily pay that higher rate. It has some ambiguous language, but I think it’s fair to interpret it as meaning that temporary rate goes through December 31. We are confident that we can ask CMS to extend that, and we believe they would extend that at least through the end of the public health emergency, which we expect would be– at this point is looking to be April at the earliest before that expires. So I think if you all do not approve this rule today, then there’s two questions we’ve got to answer and determine. One is, do we ask CMS for permission to continue the temporary rate? And at this point, my expectation is we would do so. And the second is, do we ask CMS to hold off on approval of the higher rate? And that goes back to whatever the will of this committee is in terms of next steps.


Sen Hammer: And as far as the actuary that arrived at the rates, Milliman was the first one, and then there was a third-party actuary. Is there any reason for you to believe that the results of the actuary study that came up with recommended rates would have any inaccuracies to it?


White (DHS): None that I’m aware of. And I want to be cautious here, because one thing that I want members to understand is there are certain provider types, primarily hospitals and nursing homes, where we do have the authority to require those providers to turn over their costs to us. And so we can look at their books and see what they’re spending on. For all other provider types, including assisted living, we’re reliant on cost surveys where the providers voluntarily respond and give us information. And so I mention that because, based on the information we have been given, I’m not aware of any errors or any omissions or problems in the report of the actuary. But it’s subject to the quality of that data that was submitted by the providers, if that makes sense.


Sen Hammer: Which the participation rate on the second actuary study was higher than the first one, is that correct?


White (DHS): Yes, sir.


Sen Hammer: Okay. Mr. Chair, I’d like to make a motion to divide the chambers on the vote, please.


Rep Dotson: There’s not a motion on the floor just yet to divide the chamber–


Sen Hammer: At the appropriate time. Thank you.


Rep Dotson: At the appropriate time. All right. Representative Eaves, we’re back to you.


Rep Eaves: Thank you. Mark, so how did you come up with the temporary, I guess, pandemic rate of $80-something?


White (DHS): What we did is we– that was, we were having some negotiations with providers. And I don’t wanna get too deep in the weeds on this because this is a terribly complicated and long running issue. But with that said, we got some initial information from some providers about their costs. And our staff looked at it, came up with some numbers, and that’s where we came up with the $80.55, was looking at the cost they were reporting to us on labor and then taking the admin cost from some of the previous actuarial studies and applying an inflation adjustment to that.


Rep Eaves: Okay. And to go back to what you said earlier, are you very confident that come December 31, that these facilities won’t go back to the $60-something range?


White (DHS): I would say I’m very confident with that. I believe that CMS will work with us and we will have options to continue that $80 rate, if that is what is needed, and if that’s where the committee goes.


Rep Eaves: Okay. How soon will you know that they’re going to allow you to extend that? Yeah, I think yesterday what we heard was that the temporary rate would stay in effect as long as there was a federal emergency.


White (DHS): Right.


Rep Eaves: But then I think there’s language in there that says that it actually expires December 31.


White (DHS): Right, but the language is ambiguous. It does mention December 31 in there. What I would plan to do is, if the committee chooses to hold review of this rule, then my plan is this afternoon to reach out to CMS and immediately ask them to go ahead and grant us permission to continue that temporary rate. And I believe that we would hear from them fairly quickly.


Rep Eaves: Thanks, Mark.


Rep Dotson: All right, Senator Tucker, you’re recognized.


Sen Tucker: Thank you, Mr. Chair. Apologies if you said this and I missed it, Mark. But the first part of the question is, when did the temporary rate go into place? And the related question is, when was the last time there was a permanent rate increase?


White (DHS): Well, let’s see if this has the exact date in there. March 1 was when the temporary rate became effective. So it’s been in effect since March 1. I’ll just give a little brief history without getting, again, without getting too deep in the weeds. So the rate started at a significantly higher amount from where we are now– I’m sorry. In the range of $80 is where it was in 2018. Effective January 1, 2019, based on a rate study, we lowered it, but we did it in a series of stair steps so that rate cut would take effect gradually and not be all at once. As we were going down those stair steps, every six months, the pandemic hit. And based on conversations with the industry, we froze the rate at the stairstep it was at in the spring of 2020. And that was, I believe, $67.25.


Sen Tucker: It was still going down at that time?


White (DHS): It was still going to go down to $62.89 eventually. So we left it to $67.25 there in the spring of 2020. And then in March is when we came back and got the temporary rate to increase it.


Sen Tucker: Okay. Mr. Chair, when it’s appropriate, I’d like to ask Phyllis Bell, the Executive Director of the Assisted Living Association, to come answer a question or two as well.


Rep Dotson: Senator Tucker, it is the practice of this committee to only hear from the agency. I won’t be hearing from any outside entities.


Sen Tucker: If I may then, I’d just like to ask Mark if you know the answer to this question about how the facilities will be affected if this is put off a month, if any facilities will be closed, or if you have any information along those lines?


White (DHS): I’m not aware of any facilities that are at immediate risk of closure. None that I know that they have notified us of. And typically, if there’s a facility that is on the verge of closing, we will hear about it, because typically they have to find alternative placements for those residents, and they sometimes will reach out to us for help on that, but at this point, I’m not aware of any.


Rep Dotson: Thank you, Senator. Representative Gray.


Rep Gray: Thank you, Mr. Chair. I’m over here. So I guess my question would come to– because my question keeps changing as more questions get asked. But you alluded to back in 2018 when we started that stair step down. And then here we are essentially with, what, a 30% increase, taking us back to where we were in 2018. Why the large difference? This is some of my frustration. I’ve run the bill to essentially establish cost reports for assisted livings. Most everyone else with that institutional type has to do a cost report. We wouldn’t be in this situation had we had a cost report. So that’s something I would ask the committee to look at in the future is a cost report. So essentially, they submitted their data for the 2018 rate cut because the data they submitted justified that. Why is the data now so different, and how can you attest to the accuracy of that data being so significantly higher in these rate studies?


White (DHS): Sure. So the rate that we had in 2018, the origins of that rate go back a number of years. And essentially that rate had no actuarial basis, and that’s why CMS challenged it. And CMS told us that we had to change it. In fact, when we renewed the Living Choices waiver back in 2016, the CMS would not approve that until we put language in the waiver saying, “Yes, we will revisit this rate, and we will come up with a rate that has an actuarial basis.” And so that started that process. We’ve done all together now four cost surveys and four studies of the assisted living rate since that time. The first three were primarily looking at costs incurred either before the pandemic or in the initial months of the pandemic. This last one looked at data in the height of the pandemic when we started seeing those increased labor costs that were seen across in the healthcare industry. So that’s the chief reason for the difference in the rates that were arrived at then and what this rate was.


White (DHS): And I can tell you specifically, based on my calculations of going through the actuary’s report, those differences in staffing cost– again, this is what’s reported by the providers to us. What they reported to us, that accounts for $17.45 of that difference. In addition, differences in administrative costs account for another $1.12. And then the third component, this was probably the most significant back and forth between us and the industry over the last few years, was whether or not CMS would allow for us to pay for certain expenses related to meal preparation and meal planning. Our consultants we had at the time did not think that CMS was likely to approve that. We submitted that. I mean, at this point, it looks like CMS will approve it. We’ve made that very explicit so that CMS is clear on what it is they’re approving, but that accounts for $9.68 of the difference. So you add all that together, and that pulls you within a dollar or two of the gap between that earlier rate and this rate.


Rep Gray: Okay. Were we able to verify, I think it was $17.45, and the additional staffing, was that direct patient care? Was that verified that those increased salaries were directly related to what was allowed?


White (DHS): I don’t want to use the word verified because that was strictly based on the numbers reported to us by the industry. We do not have the means to verify those numbers.


Rep Gray: Okay. Hence the need for that cost report. And I guess one final question. I mean, this is a 30% increase for one specific industry type. Is DHS prepared to give everyone, every industry type, a 30% rate increase being as we go into session, being as all of their labor costs have increased?


White (DHS): Not without a significant increase in state general revenue that you all allocate to us.


Rep Gray: All right, I think if this passes that’s what we’re fixing to see is a lot of requests that every other industry type receive that same request. Thank you.


Rep Dotson: Thank you, Representative. Senator Hendren, you are recognized.


Sen Hendren: Yeah, thank you, Mr. Chairman. So as we look at this, we keep talking about reimbursement rate and all that. I guess what I want to know is you guys have studied this and I know you’re depending on the numbers that you get from the industry, but what is this likely to do to the average wage for the people out there providing the service– not the companies, but the dollar rate?


White (DHS): It’s possible that they may increase their wages. I suspect that the facilities are already paying higher amounts because they’re competing– just like I know that we are in our facilities. We’re competing with other employers in healthcare industry to get those employees in the door. And so it’s possible that they may pass that on to their employees, but I have no way of guaranteeing that.


Sen Hendren: So I guess that’s the part that is somewhat discomforting is that it’s kind of like when we increase foundation funding and teacher salaries don’t go up. If we increase reimbursements and wages don’t go up, all we’ve done is increase the bottom line and not really kept the workers competitive, as you said, with the employment market out there. How do we know that that’s going to happen if we increase this reimbursement rate? Because to be honest, over the last two years, a 30% increase in wage salaries is pretty normal across what I’ve been seeing in the market. But if we’re just going to do this and there’s not going to be any change in wages, then what have we accomplished?


White (DHS): Yes, sir. I would say that we have no authority or means to ensure that this will result in those wage increases. Once we pay these dollars out, that is entirely at the discretion of the providers.


Sen Hendren: And I guess to the point that Representative Gray said, I hope that the General Assembly in the future will require that. If there’s going to be a reimbursement rates, it seems fitting that the General Assembly should know, just like we know what teachers are getting paid at every school district, what the workers are getting paid at these facilities to see if the dollars are going to where they’re going. But right now we have no such assurance, correct?


White (DHS): That’s correct.


Rep Dotson: Thank you. Representative Fite.


Rep C Fite: Thank you, Mr. Chair. Mark, my figures show that 11 assisted living centers have closed since the big rate cut in 2019. Is that in line with what you have? And mainly in rural areas.


White (DHS): Representative Fite, I’ve heard different numbers on that. And in looking at those, I know some that have been told to me as being closed, I’ve checked and they have not closed. I know the last time that I checked it, I verified five facilities that had in fact closed. Others, they had changed ownership, they had changed their operations. And this was probably about three months ago that I checked last. But there are five that I know that have closed. If there are others, I’m not aware of those, but I don’t want to tell you absolutely they have not. I just know that I’ve verified five.


Rep C Fite: I have one at the edge of my district that serves people in my district that’s on the verge of closing. And I’m afraid that’s going to happen in the very, very near future if we do this.


White (DHS): Yes, ma’am. I mean, that is what some of the owners have told us and so we have heard that as well.


Rep C Fite: Well, you mentioned previously not knowing any that were about to close.


White (DHS): Let me be very clear. I’m not aware of any that are in immediate jeopardy of closing within the next few days or couple of weeks. If there are others that are on a track where they may have to close in the next few months, that I can’t tell you. And that we just don’t have the visibility to know exactly which facilities might fall in that category. But in terms of one that’s going to close by the end of the year, I’m not aware of any that are in that position.


Rep C Fite: And what happens to the people who live there when a facility closes?


White (DHS): When the facility closes, what we typically see is there are some that will move into a skilled nursing facility. There are some that will move into another assisted living facility, and there are some that will return home or return to family, and we see just a mixture of outcomes for those individuals.


Rep C Fite: So it sounds sad to me any way you look at it.


White (DHS): It’s certainly, anytime that a resident has to move out of facility, that can be a trauma and certainly can create– it is certainly a negative experience for that individual and can create other damage as well.


Rep Dotson: Thank you, Representative. Senator Irvin.


Sen Irvin: Thank you, Mr. White. The current rate that we’re paying, which is, I think $81 or $82, but then the rule one is a higher rate at $86 or so,– $85, $86 something–


White (DHS): Correct.


Sen Irvin: –around there. So what’s being proposed is about $96, $97. The current rate that we’re paying under the public health emergency, is that also an enhanced– is that under the enhanced FMAP that we’re receiving?


White (DHS): It is, yes. What we pay assisted living facilities does fallen in that 30-70 split. And so we are receiving 6.2% of enhanced federal funding for it.


Sen Irvin: Okay. Would it be fair to say that that allowed us to maybe pay a higher rate?


White (DHS): It did give us more room to breathe. Yes, ma’am.


Sen Irvin: Okay. But we know that that’s going to be till April and then the FMAP may change, right? If the public health emergency goes away, then our FMAP reduces. And so my concern is we actually have taken action within Legislative Council to hold some items, particularly in Personnel Subcommittee, because of their potential impact to the budget that maybe not knowing what that potential impact to the budget is. And so we’ve held some of those items out of respect for an incoming new administration. And so could you speak a little bit about the budgetary impact of what we’re looking at?


White (DHS): Yes, ma’am. Speaking just a little bit more broadly about the Medicaid budget in general. So you’re absolutely correct that when the public health emergency expires, the enhanced federal funding will end. It will increase what we as a state have to pay towards Medicaid. Now, that will begin the process of removing all of the ineligible individuals from the program, and certainly, that will create some savings. The big unknown is how many do we have? We have an idea of a range, but we have no way of knowing specifically are we going to lose 50,000, 100,000, 200,000 people. And so certainly if that number is on the lower end of that range, that’s going to create a higher obligation for the state in the next biennium. So our expectation is when that enhanced FMAP ends, we will need to start drawing down from Medicaid trust fund and continue that to make it through the next biennium. And so that will increase the obligations for state general revenue, not necessarily next fiscal year, but in the following fiscal years, yes.


Sen Irvin: Right. And so for me, I think holding it over would be a consistent policy choice and decision that this Legislative Council has actually already made in certain areas of personnel and those kinds of requests. So I don’t have a problem with allowing for that to be a consistent policy of how it affects our budget. And in my opinion, it’s a little dicier because we’re dealing with an enhanced FMAP. And if we have an increase on state general revenue because that enhanced FMAP goes away, that’s something we’re all going to have to understand very clearly and how that’s that’s going to impact our state budget overall because that just puts a larger demand on our state general revenue portion of it. And then my last question would be the meal preparation part of that. So when I ran the numbers and did the math, if CMS doesn’t approve that portion of it, it’s really actually almost the exact same rate that they’re getting under the public health emergency. I mean so it could be that we approve this, but then that portion doesn’t get approved by CMS and they’re actually maintaining the same– they would be maintaining the same rate that they’re actually getting right now under the public health emergency. So our action doesn’t depend on whether somebody’s going to close or not, I mean, because they’re going to be getting the same rate. And I’m a little concerned that if we publicly state– and I had this question with you in the subcommittee– if we publicly state that we’re going to pay this amount and that doesn’t get approved by CMS, my concern is that there will be a demand for us to make that up in 100% state GR, which would be very costly. So thank you for answering my questions.


White (DHS): Yes, ma’am.


Rep Dotson: Thank you, Senator. Senator Hammer, you’re recognized for a quick question.


Sen Hammer: Thank you, Mr. Chair. The other industries, have they received rate increases or decreases over the public health emergency, or do you know of any of them that have decreased?


White (DHS): So since 2019– and if you recall, the Governor did issue an executive order directing us to do a rate review process for every Medicaid provider type, and we were supposed to do that. And instead of rotating a four-year schedule, we are now closing out the final round of those rate reviews. And in that time, we have looked at every Medicaid provider type, and today we have had a few that have seen decreases. We’ve had many more that have seen increases in that time.


Sen Hammer: And when will this be filed with the Secretary of State because that, to me, is a critical component. Regardless of where we decide in here, if you are able to file it with the Secretary of State, that’s going to mean that CMS has approved the rate, which means that we wouldn’t have to worry about any claw back or audit findings. When will you file it with the Secretary of State so it would be official?


White (DHS): Our standard practice with any item that’s subject to CMS approval is that once you all review it, we hold off filing with the Secretary of State until we receive that CMS approval. So that if CMS wants something changed or they deny it, we can always bring it back to you to change to reflect those CMS changes.


Sen Hammer: And you don’t know how much ADFA was on the hook for financial repercussions of what we decide here today, do you? That’s not even in your wheelhouse or consideration, is it?


White (DHS): It is not.


Sen Hammer: Okay. Thank you.


Rep Dotson: Thank you, Senator. And Representative Gray. Sorry.


Rep Gray: No, thank you. I did that. Thank you, Mr. Chair. So I just want to kind of follow up to Representative Fite’s question, but kind of in a different way. I had a lobbyist send me the information months back, I’m not sure at what point, telling me that 10 or 11 assisted livings had closed. And so as I just started googling them, I found that, yeah, one of them, the owner was in prison, and another one, well, there had been a catastrophic flood and they just never reopened. So you said there were five that you were aware of that had closed. Can you tell me if any of those closed due to low reimbursement rates?


White (DHS): If you’ll allow me to double-check my notes before I answer that. I know of the five, there was one of the facilities that the– at least what the management told our staff. They said their issue was they could not get enough business in the door, and that was their problem. The other four, we don’t know for certain. I will say that one of the common themes among those four is– I’m fairly certain that at least three of them, and I think possibly four of them, they had been built with federal financing obtained through USDA or through other sources that required them to only serve low-income individuals. And for assisted living, that makes for a very difficult business model if you’re going to try and survive as a purely Medicaid facility. My supposition is that was probably the chief issue for those facilities.


Rep Gray: Okay, thank you. And I mean, that comes back to the business model chosen to achieve the financing and business decisions, not necessarily rate reimbursements, because they knew what they were getting at the time that they made application. So thank you.


Rep Dotson: Thank you, Representative. Members, here’s where we’re at. I got two more in the queue. I’m going to take these two questions, and then we’re going to start moving to motions. Senator Chesterfield.


Sen Chesterfield: I was about to start dealing with the motions.


Rep Dotson: All right, that one was fast.


Sen Chesterfield: I move the committee’s report.


Rep Dotson: I’m going to not hear that motion because I said I was going to take one more in the queue. I got one more after you.


Sen Chesterfield: We’re gonna have to talk to you, Mr. Chair.


Rep Dotson: Thank you. Representative Fite. The final question.


Rep C Fite: Thank you, Mr. Chair. Could we get someone from DFA or a financial person up to tell us what it would cost the state of Arkansas if some of these facilities that have loans guaranteed by ADFA do close?


Rep Dotson: I’m sorry. ADFA? Is ADFA here? Is there anyone from ADFA here that could–?  I don’t think there’s anybody from ADFA that–


Rep C Fite: Is there anyone here with expertise in this area?


Rep Dotson: As far as the agencies are concerned, I don’t think so.


Rep C Fite: Do you know?


Rep Dotson: Sorry.


Rep C Fite: Well, it’s not going to be cheap, but can anyone tell us approximately?


Rep Dotson: Does anybody from DFA want to venture any sort of guess? No, I don’t think they can answer that question.


Rep C Fite: Thank you.


Rep Dotson: They’re not prepared to answer that today. All right. Representative Eaves, we’ll start with you.


Rep Eaves: Thank you, Mr. Chairman. Based on what we’ve heard and on Representative Eubanks, I’d like to just withdraw my initial motion of adoption of the full report.


Rep Dotson: Okay. Representative Eubanks, let’s hear your motion again. Well, it’s been a while.


Motion: Keeps rate the same (failed)

Rep Eubanks: Okay, my motion is to adopt the report with the exception of the DHS medical services rule regarding Living Choices waiver rate adjustment, which should be referred to the JBC Rules Subcommittee.


Rep Dotson: That’s a proper motion.  Do I have a second?  Got a second. Any discussion on the motion? All in favor? Hold on. There was a request by Senator Hammer. Divide the chamber. I don’t see any other hands. I got one. I got two, three. All right, we’ll start with the House. All in favor, aye. All opposed? The motion carries. Senator Rice, do you want to call the Senate? The House passed.


Sen Rice: Members, we are going to have to do a Senate voice vote and then we’ll call for that. All in favor, Aye? Opposed? The no’s have it.


Rep Dotson: All right, that motion fails.


Sen Rice: Now, if you’re going to make your roll call.


Rep Dotson: I can see one hand, two hands, three hands. We got a roll call. All right, I’ve got a point of order. This may answer that question. This has already passed the House. I’m hearing this as a roll call on the Senate side. Okay, Senator Flowers, you’re recognized for your point of order.


Sen Flowers: So my understanding, the House voted in the affirmative. The Senate voted in the negative, so the motion failed. So why would we– I withdraw my motion for a roll call because, as I said, it’s failed. Why would you need to have any other vote on this motion?


Rep Dotson: So the body is questioning the calling that the motion passed in the Senate only, and so this is the way to verify whether or not my ruling was correct or not.


Sen Flowers: The motion, to my understanding, failed because one of the chambers did not vote in favor, and therefore, I made the motion for a roll call prior to that vote. But I would withdraw my motion for a roll call. I think it’s already been disposed of as having failed.


Rep Dotson: All right, Senator Flowers, the roll call is not a motion, it’s just a procedural request challenging the chair. So if you’re requesting to withdraw your hand from being one of the three, it would mean we would need another hand in order to do the roll call. I see more than three hands of the other members calling the roll call. Senator Flowers.


Sen Flowers: Yeah, well, I made the request, and I withdrew the request, so someone should at least procedurally make a request before you ask for–


Rep Dotson: I’ve heard it from several different members, so I see three hands. We’re going to call the roll on the Senate side.


BLR Staff: Senator Hammer.


Rep Dotson: Just for clarification of Senate members, this is to pass or fail Representative Eubanks’ motion to adopt the report with the exception of the one item that will be referred to the JBC Rules Subcommittee in January.


BLR Staff: Senator Hammer votes no.


BLR Staff: Senator Pitsch.


Sen Pitsch: No.


BLR Staff: Senator Pitsch votes no.


BLR Staff: Senator Leding.


Sen Leding: No.


BLR Staff: Senator Leding votes no.


BLR Staff: Senator Mark Johnson. Senator Mark Johnson is not here. Senator Clarke Tucker.


Sen Tucker: No.


BLR Staff: Senator Tucker votes no.


BLR Staff: Senator Ballinger. Senator Ballinger. Senator Fulfer is his first alternate. Senator Fulfer. Senator Hill.


Sen Hill: Yes.


BLR Staff: Senator Hill votes yes.


BLR Staff: Senator Davis.


Sen Davis: Yes.


BLR Staff: Senator Davis votes yes.


BLR Staff: Senator Wallace. Senator Wallace. Senator Garner. Senator Garner. Senator Blake Johnson.


Sen B Johnson: Yes.


BLR Staff: Senator Blake Johnson votes yes.


BLR Staff: Senator Flippo.


Sen Flippo: Yes.


BLR Staff: Senator Flippo votes yes.


BLR Staff: Senator Hester.


Sen Hester: Yes.


BLR Staff: Senator Hester votes yes.


BLR Staff: Senator Hickey.


Sen Hickey: Yes.


BLR Staff: Senator Hickey votes yes.


BLR Staff: Senator Stubblefield.


Sen Chesterfield: Yes.


BLR Staff: Senator Stubblefield votes yes.


BLR Staff: Senator Hendren.


Sen Hendren: No.


BLR Staff: Senator Hendren votes no.


BLR Staff: Senator Ingram.


Sen Ingram: No.


BLR Staff: Senator Ingram votes no.


BLR Staff: Senator English.


Sen English: Yes.


BLR Staff: Senator English votes yes.


BLR Staff: Senator Caldwell. Senator Caldwell. Senator Sample?


Sen Sample: No.


BLR Staff: Senator Sample votes no.


BLR Staff: Senator Dismang. Senator Dismang. Senator Flowers.


Sen Flowers: No.


BLR Staff: Senator Flowers votes no. Senator Rapert. Senator Rapert. Senator Chesterfield.


Sen Chesterfield: No.


BLR Staff: Senator Chesterfield votes no.


BLR Staff: Senator Teague. Senator Teague. Senator Elliott.


Sen Elliott: No.


BLR Staff: Senator Elliott votes no.


BLR Staff: Senator Bledsoe. Senator Bledsoe.  Senator Irvin.


Sen Irvin: Yes.


BLR Staff: Senator Irvin votes yes.


Rep Dotson: By a vote of 9 yes and 10 no, the motion has failed. Senator Hammer, are you still in the queue for–? Okay. All right. I have a motion to adopt the report by Senator Chesterfield and a second. Any discussion on the motion? Seeing none, all in favor, aye. Any opposed? The motion carries. The report is adopted.


Rep Wardlaw: All right, let’s go on to the Claims Review subcommittee. And with that Senator Hester, you’re recognized.


Sen Hester: The Claims Review Litigation Reports Oversight subcommittee met on Thursday, December 15, 2022, concerning litigation reports oversight. The subcommittee reviewed 16 litigation cases. The subcommittee also reviewed one proposed settlement submitted by the University of Arkansas System. Concerning Claims Review, the subcommittee affirmed the ruling of the Claims Commission as to 10 re-issuances of warrants, 1 awarded claim and 10 denied and dismissed claims. The subcommittee declined to consider one claim which was submitted outside the statutory time frame to appeal the Claims Commission decision under Arkansas Code Annotated Section 19(10)-(11)a. Finally, pursuant to the Arkansas Code Annotated 19-5-601e, the Treasurer of the State submitted a claim for additional general and special revenues that the City of Calico Rock should have received based on the census count. The subcommittee approved inclusion of this amount in the claims appropriation bill. I move adoption of the report.


Rep Wardlaw: This is a proper motion. Do I have a second? I have a second. Any discussion on the motion? Seeing none, all those in favor say aye. All opposed? The ayes have it. With that, we’ll move on to the Medical Marijuana Oversight Report. Senator Sample.


Sen Sample: Thank you, Mr. Chair. The Medical Marijuana Oversight Committee met on Wednesday, December 14. The committee discussed the following items. The Department of Finance and Administration presented rules regarding licensure for medical marijuana facilities, and the Arkansas Cannabis Industry Association expressed concerns regarding the state’s contract seed to sale software provider BioTrack and their quality of service. BioTrack provided a report with responses to prior complaints levied against them, as well as plans for future improvement of their services. And with that, I make a motion to approve.


Rep Wardlaw: I have a motion and a second. Any discussion on the motion?  Seeing none, all those in favor say aye. All opposed? The ayes have it. With that, we’ll go to the Performance Evaluation Expenditure Review. Representative Gray. You are recognized.


ARPA funds and held items

Rep Gray: Thank you, Mr. Chair. The Peer Subcommittee met on Tuesday, December 12. The subcommittee received reports, reviewed items, and approved requests for the following items: various temporary appropriations, American Rescue Plan Act appropriations, Infrastructure Investment and Jobs Act appropriations, and Restricted Reserve Fund transfers. Several items are noted in the report as being held in subcommittee. The subcommittee moved that all held items be referred to JBC due to the upcoming regular session. I move adoption of the report.


Rep Wardlaw: Senator Chesterfield, with a nod of your head, is this a question or is this discussion on the motion?  It’s a substitute motion.  So I’ll take that motion. Do I have a second on the motion from Representative Gray? I have a second. Senator Chesterfield, I’ll recognize you for a substitute motion.


Sen Chesterfield: Mr. Chair, I move to substitute and accept items 1 through 19 under item B of the American Rescue Plan Act Appropriation request.


Rep Wardlaw: That’s a proper motion. I have a second. Do I have any discussion this motion?


Sen Chesterfield: Yes, Mr. Chair, if I may.


Rep Wardlaw: I will recognize you for that.


Sen Chesterfield: Thank you, sir. We have held this and held this, and we were supposed to be getting information on top of information. That has not happened. These individuals were approved by the committee through the process that we had used for everything else. And it seems to me that the individuals who have made these requests have been vetted and that their needs are great, and I would appreciate a good vote.


Rep Wardlaw: Senator Irvin.


Sen Irvin: I don’t believe that’s actually a proper motion that this body can take up, can it?


Rep Wardlaw: It is. But her motion left out the adoption of the report, so we would have to add that in to make it–


Sen Irvin: I mean, aren’t those items already moved over to JBC?


Rep Wardlaw: This body actually makes that transfer with the adoption of the–


Sen Irvin: Of the report?


Rep Wardlaw: –report.


Sen Irvin: Okay.


Rep Wardlaw: Any further discussion on the substitute motion? Representative Irvin, you’re recognized.


Sen Irvin: I’m going to speak against the motion. I think I’ve said this time and time again what those items are. Yes, they’ve come before us. But this is, in my opinion, it was a very frustrating process on how these projects were put before us. There were winners and losers that were picked and submitted before this legislative body based on, in my opinion, just who had the greater influence. And this devolved into what is basically a General Improvement Fund grant program, a GIF grant program, that was not administered or the process was not brought forward for every single legislature to be considered in this process. And so I’m speaking against this motion because you are basically endorsing– if you vote for this motion, you’re endorsing the old GIF grant program, and you are endorsing projects that are in specific people’s districts and otherwise.


Sen Irvin: And I may have some in mine that are part of this, but it’s the process that I don’t think was appropriate, that I don’t think it was right, and I believe it was not fully vetted in that process. It was not intentional or focused. These are funds from the American Rescue Plan Act that are supposed to be prioritized for the response to COVID. It should have been prioritized for healthcare, in my opinion, and not for capital improvement projects at institutions of higher education or capital improvement projects in other areas. I’ve been very supportive of some of these projects, and I think it’d be great to have them done. But I’m not for building a student center with a theater and a bowling alley with these funds. And that’s what you’re going to vote for if you vote for that motion. So I would speak against the motion, and I would appreciate others to vote against the motion.


Rep Wardlaw: Senator Hill, you’re recognized.


Sen Hill: Can anyone tell us what this is going to cost the state?


Rep Wardlaw: Senator Chesterfield?


Sen Chesterfield: I don’t know the exact amount of this, but let me say this, every one of us in this place has had money sent to various areas of need. What these do, and I think it’s important, is that we have a huge shortage of nurses throughout this state–


Sen Hill: That’s not my question, Senator Chesterfield.


Sen Chesterfield: Well, Mr. Hill, I told you, I don’t know the answer to your question.


Sen Hill: Thank you.


Sen Chesterfield: And the tone and tenor of debate is important as well. The chair recognized me. I don’t have an answer to your question. I was dealing with the motion.


Sen Hill: Thank you.


Rep Wardlaw: Senator Hill, there is a slip in your packet that goes through each and every project. You would have to add those up to get to a total amount.


Sen Hill: Thank you, sir.


Rep Wardlaw: Yes, sir.  Representative Ladyman, you’re recognized for discussion or a question to the sponsor of the motion.


Rep Ladyman: Discussion. Thank you, Mr. Chairman. I have to agree with Senator Irvin. When I look at these and this is the recovery money for response to COVID to recover from the damage that was done. And some of these have no relationship to that subject. So I can’t vote for something that is not related to that because I just don’t think that’s right. And we don’t know there may be other things that we need this money for in the future. They talk about long-term COVID and other things. So if it’s not related, I can’t vote for it. Thank you, Mr. Chairman.


Rep Wardlaw: Senator Elliott. And before you start, Senator Chesterfield, I see you in the queue and I’m coming to you as a sponsor as last, as courtesy.


Sen Chesterfield: Thank you so much.


Rep Wardlaw: Sorry. Senator, you’re recognized.


Sen Elliott: Thank you, Mr. Chair. This process that we’ve been discussing is a process that was put in place that we’ve used for other awards. And I don’t really know at what point we can continue to engender people believing in our process if we continue to keep people on the agenda, string them along and keep voting on it or not voting on it, and to pick out one particular thing, maybe that is going to sound egregious enough that maybe it is not responding to what was asked of folks to submit. But the fact is they submitted their proposals and they’ve been waiting and waiting. And every time we’ve come to this list of, well, I guess you might say proposals, every time we’ve come to them, we found some reason not to vote on them. And I just think this is so incredibly unfair to people who submit what we ask them to. And because we can’t come to any kind of decision, we just string people along. I really think that’s very unfair. Whether we vote for or against these proposals to try to make it something the same as GIF because that will get people’s attention, yeah, it will. But this is what people were asked to do. They followed the process. And now we get to a point after months we just say no to them and I would ask you to vote for the motion. Thank you, Mr. Chair.


Rep Wardlaw: Seeing no further questions or discussion, Senator Chesterfield, would you like to close for your motion?


Sen Chesterfield: Mr. Chair, it is amazing to me that we still are picking and choosing what we define as GIF. 19 is approved and yet it goes to a specific county that is represented by a specific House member and a specific Senator. And yet these others that went through this process, it was not an easy process. They went through a process for two or three months trying to tone and get what is right for their constituents. And what is amazing to me is most of this is dealing with healthcare. It’s dealing with healthcare in underserved communities. And one of the reasons that you have the ARPA funds is so that you deal with individuals in underserved and minority communities. In looking at the monies that have been distributed over the state, I’ve not seen that that is the heart of the decisions that we made. So I just rather have an up-and-down vote. Just tell these folks no instead of sitting around pretending that we’re going to do something different at a later time. But we said when we accepted these funds that we would send them to underserved and minority communities, which is what the rules and regs say. They have been vetted. And if there’s one that’s egregious, fine. But we have a nursing shortage here, and the majority of these entities say we’re going to provide a program of nursing, whether it be CNA, LPNs, or RNs, to meet the needs of the people. Whether you vote yes or no, at least these people deserve a vote. And I’d appreciate a good vote. Thank you very much.


Rep Wardlaw: Members, with the Senator’s close to her motion, I will remind the committee one more time what we’re actually voting on. If you follow me in your packet to F.8, you will see item B 1 through 19. This vote does not include the adoption of the report, but it is only on items 1 through 19 on F8 in your packet. So with that, all those in favor say aye. All those opposed? The no’s have it. Motion has failed. So with that, we’ll go back to Representative Gray. I’ll let you restate the original motion.


Rep Gray: Thank you, Mr. Chair. I move adoption of the report.


Rep Wardlaw: That’s a proper motion. I have a second. I have Senator Hickey for discussion of that motion. Okay. He was just going to second. All those in favor say aye. All those opposed? The ayes have it. Report is adopted. With that, we’ll go to the Review subcommittee. Senator Flippo.


Sen Flippo: Thank you, Mr. Chairman. The Review Subcommittee met on Tuesday and reviewed the agenda items, including MOFs, grants, and contracts. They reviewed a timber sale for DHS and approved a disclosure for a lease for ABA. And I move adoption of the report.


Rep Wardlaw: That’s proper motion. I do have a second. Any discussion on the motion? Seeing none, all those in favor say aye. All opposed?  Ayes have it. With that, we’ll move on to the Personnel Subcommittee. Representative Hillman, you’re recognized.


Rep Hillman: Thank you, Mr. Chairman. The Personnel Committee met on December 14. The committee reviewed the requests and reports listed in items 1 through 12 on this report, and I would be happy to take any questions that anybody might have. Otherwise, I move for the adoption of this report. Thank you.


Rep Wardlaw: I have a motion. Do I have a second? I do. Any discussion on the motion? Seeing none, all those in favor say aye. All opposed? Ayes have it. With that, we’ll move on to Lottery Oversight. Representative Beck, you’re recognized. You got to hit your button.


Rep Beck: Thank you, Mr. Chairman. The Lottery Oversight subcommittee met Wednesday, December 14, in Mac B. The subcommittee heard testimony and review on the following items: number one, the Office of Arkansas lottery report; number two, the Arkansas Division of Higher Education invoice for reimbursement; number three, the Arkansas Division of Higher Ed recommendations for the Academic Challenge and Workforce Challenge programs. The Lottery Oversight Committee adopted the annual report to the Arkansas–and we adopted the annual report to the Arkansas Legislative Council, and I move for adoption of this report.


Rep Wardlaw: That’s proper motion. I have a second. Any discussion on the motion? Seeing none, all those in favor, say aye. All opposed? Ayes have it. With that, we’ll move on to the Highway Commission Review and Advisory. Representative McNair?


Rep McNair: The Highway Commission Review and Advisory Subcommittee met Tuesday, December 13, 2022. The subcommittee heard testimony and reviewed the following items: the quarterly land conveyances report, the annual expenditure of revenues report, the 2022 fourth quarter, and the 2023 first quarter report on the progress of each highway construction project of $10 million or more, September to December 2022 monthly updates of the ALC Efficiency Study recommendations rules for implementation, and proposed legislation for filing during the regular session, nd finally, the review of Act 789 report for 2023. I move for adoption of the report.


Rep Wardlaw: That’s a proper motion. Do I have a second? I have a second. Any discussion on that motion? Seeing none, all those in favor, say aye. All opposed? Ayes have it. With that, we’ll go to the Employee Benefits Division Oversight. Senator Hammer, you’re recognized.


Sen Hammer: Thank you, Mr. Chair. The Employee Benefit Divisions Oversight subcommittee met on Wednesday, December 14, 2022. The subcommittee heard and reviewed the Employee Benefit Division contract amendment to add employee assistant program and actuary service, Amendment 4 presented by Jake Bleed, director of the Employee Benefit division. Mr. Chairman, I move for the adoption of this report and would like a request at the end on behalf of the committee after we take the vote.


Rep Wardlaw: That’s a proper motion. Representative Crawford, do you have a question or a discussion on his motion? Okay, Senator Hammer, I’m going to let you hold that motion. We’ll take this question from Represent Crawford.


Rep Crawford: Thank you, Mr. Chair. Would it be possible to get Jake Bleed up to the table?


Rep Wardlaw: I think if you would wait just a second, when we finish the report, we’re getting a report from Jake Bleed to full council.


Rep Crawford: All right, thank you.


Rep Wardlaw: So, with that, we’ll go back to Senator Hammer’s motion for the adoption report. Do I have a second? Any discussion on the motion? Seeing none, all those in favor, say aye. All opposed? Ayes have it. With that, Senator Hammer, you’re recognized to have Jake Bleed come forward.


Sen Hammer: Thank you, Mr. Chairman.


Bleed (EBD): Jake Bleed, Employee Benefits Division.


Rep Wardlaw: Thank you. And if you would, from the subcommittee the other day, if you don’t mind, we’ll let you kind of open up and we’ll go into questions from the members.


Opt-out process for Medicare Advantage plan

Bleed (EBD): So the question that was asked during the subcommittee meeting was an updated report on the opt-out process for the Medicare Advantage Part D with prescription drug plan. As you all know, the opt-out process began officially in November. Although we started taking forms in October, we continued to process those. At this point, we have processed 11,457 opt-out forms. That leaves 20,073 individuals who will be enrolling in the MAPD plan. That’s about 36.3% opt-out rate and a 63.6% enrollment rate. However, those numbers are certainly not final. We continue to receive opt-out forms. We continue to work with our members and be as accommodating as we can. We continue to hear from folks that they didn’t know they needed to opt-out. They weren’t aware that they had a decision to make. And we will continue to accept opt-out forms through January. So my expectation is we will probably land around 60% enrollment in the MAPD.


Sen Hammer: Question, Mr. Chair.


Rep Wardlaw: You’re recognized.


Sen Hammer: Thank you. The rate at which you’re processing the opt-out forms, can you talk about that and what your expected goal is and what you’re doing to try to handle those in as timely a manner as possible?


Bleed (EBD): So we had designed a process where the month of November was devoted to the opt-out process. Of course, the same staff that handles all of our members were in October open enrollment. They’re very busy, usually our busiest time. They rolled right over and went into the Medicare Advantage enrollment period. Everybody that we had enrolled at that point was moved over en masse. However, we have some flexibility with CMS, the federal agency that reviews Medicare and Medicaid, as well as with UnitedHealthCare, our partner, to manually key in, in affect, everyone who wants to opt-out but for whatever reason was enrolled in the UnitedHealthCare plan. So we’re still working person by person, form by form, to get through everything and do everything we can to make sure that everybody has a true decision in this process.


Sen Hammer: And then as far as the sustainability of the program, the numbers that I hear you saying, did that align with what UnitedHealthCare anticipated on the front end? And there’s no threat of the viability of the program regardless of the dropout opt-out rate?


Bleed (EBD): I don’t see this as a threat at all. I think that this is a major policy shift for our program. I’ve certainly been reminded of the last few weeks that our members, our retirees, have never had to make a decision before. This is new for them. So I don’t think it’s at all surprising that a lot would have questions, a lot would be very skeptical of it. So very early on in this process, we took the position that this is a marathon and not a sprint, that this is a multi-year engagement. Our hope is that this becomes really the norm. So we look forward in the long haul to growing into the program and taking the time that we need to really make it successful.


Sen Hammer: And no member will have lost any coverage of any insurance while we’re in this transitional period? There was a question of whether somebody, they were automatically enrolled even though they had opted out. Those concerns should not be concerns because either way, through this transitional period, they’re going to have coverage if they have a medical event. Is that accurate?


Bleed (EBD): Absolutely. And even if something were to happen where, for whatever reason, some provider won’t recognize their card or won’t accept their billing, we will absolutely reach out to that provider and clarify that that coverage is intact. I think it’s important to understand that either coverage, either the traditional AR benefits or the MAPD plan are excellent coverage plans. Both have the full backing of the state and my office, and we are working every day to make sure that people understand that they have our back.


Sen Hammer: All right. Thank you.


Rep Wardlaw: Director Bleed, yesterday we had Executive Subcommittee, and no one from your office showed up. And we were talking about the MOU between you guys and us over the impact statements going forward into the next General Assembly. We instructed as the Executive Committee and adopted that report earlier today that you guys enter into that MOU, or we enter into that MOU with you guys by 5 p.m. today so we can be prepared for the session coming forward. Do you guys plan on getting with the Bureau today and making a good-faith effort on getting that MOU signed?


Bleed (EBD): As we’ve pointed out, that MOU is an open-ended agreement which would bind the hands of the next administration in a way that I’m not comfortable doing at this time. We have made the incoming administration aware of the MOU, but unless and until they approve of its terms, I can’t and I won’t sign that MOU.


Rep Wardlaw: Okay.  Representative Crawford, you’re recognized.


Rep Crawford: Thank you, Mr. Chair. Jake, since I’ve talked to you the other day, I’ve had three more phone calls. And I hear what you’re saying, that people are upset and concerned. Some of the things that are happening is they say that they sent the information in to opt-out, but yet they’re being disqualified anyway and being put out of the plan. And when that happens, they lose their drug coverage. I’ve heard that from three different groups, not just individuals. Okay. And the other part is a person who is in, just for an example– let me find my note here– they’re in a rehab facility, and they have been told they have to leave by December 31. Now, they opted out, but it didn’t get seen in the system. So they’ve told them that they are now on Medicare Advantage and beginning January 1, they would have to leave because of that change. So what are we going to do to take care of the issues that are happening when people actually opt-out, but there’s some kind of misfunction in the system to where it is going ahead and signing them up for the Medicare Advantage plan?


Bleed (EBD): So for the past week, we’ve been really working– each one of these cases is very specific. There’s something going on with that provider. There’s something going on with that member. There’s something going on with the form that they submitted. So we’ve created some teams internally at EBD. We’ve also had multiple conversations with United to get additional resources and teams from them to really begin tackling each one of these individual cases, reach out to the member, make sure that they know that we’re working on it, and make sure that their issues are being resolved. And that’s something that we’re working with United very closely on. And we’re deploying, to use a word, more resources directly to combat that.


Rep Crawford: Okay. And I was just wondering if the Segal Group– I know they were really good in going out to the community to inform people what they needed to do, which is why they opted out. Do they have a workforce ready to help you with all that you need, or are you on your own?


Bleed (EBD): I mean, one of the terms of the contract with the United Team is that they would handle the implementation. And so we’re relying on them and pushing them pretty hard to be responsive to these needs.


Rep Crawford: Okay. Thank you.


Rep Wardlaw: Representative Vaught, you’re recognized for a question.


Rep Vaught: Thank you, Mr. Chair. Mr. Bleed, yesterday morning, I received a call from one of my retired teachers in my district who got her form turned in on time. Got a letter back saying that she had opted out. And yet she’s got a letter this past week saying as of December 31, she was going to be on this new plan even though she opted out of going there. From what I understand, it’s a entire group of retired teachers. She used to teach in the Pine Bluff area. And I understand it’s an entire group, and these people actually took these and did it in person even, to the office to try to opt out. And as of December 31, they’re pretty much screwed unless you all figure out a way to fix this so that they can get back on their regular where they were at because they’ve opted out. So I need some reassurances on what you all are going to do and how you’re going to fix this problem of an entire group of teachers that opted out. Somehow there’s been some kind of glitch in the system, which is very scary to me since this is kind of all new. We should be on top of this, and this should not be happening. So what are we going to do to help these teachers? And I don’t know all the teachers in Pine Bluff. This one just happens to live in my district. So I need some assurances these people are going to get an extension where they are back on what they asked to be on whenever they opted out.


Bleed (EBD): So as my response to that earlier question, we are moving more people over. We’re handling it on a piece by piece, person by person basis. We’ve been working with our IT programs to do some reprogram to make sure we’re combing all of the records, to make sure everybody is where they wanted to be. That said, no one in this process will be screwed.


Rep Vaught: As of right now, they are.


Bleed (EBD): Well, I can’t imagine a circumstance under which either way, they would be. Keep in mind, the MAPD program, in my opinion, is better than the traditional insurance. I’d also point out that this is a major shift, it is a major change for our members. They have never previously been required to do anything. It’s always been a passive enrollment. Now we’re asking them to make a decision that’s very complicated. They’re being told it is a decision with lots of consequences. They are understandably very, very concerned about it. We’ve recognized that. It’s one of the reasons that we went really, I think, all out all year trying– or over the last six months trying to really roll out and implement this program as quickly as possible. We did ask to delay implementation until calendar 2024, as you know. We did ask to have a full 12 months to roll this out to make sure that our communication, our implementation was effective. We were told quite clearly, no, we needed to do this now. We have been acting on an expedited basis. I think in a lot of ways we’ve succeeded in that, but it’s not hugely surprising me that at the end of it, we have problems. So for example, we recognized early on that if we place rules, if we say, “You have to give us a form in this month and only this month. It has to be provided to us in this fashion. It has to be done X, Y, and Z. Otherwise, you’re out,” we’re going to create more problems for ourselves in the end. So we’ve really tried to be as accommodating as possible. We’re still accepting forms, even though it’s not November. We accepted forms through any means that people could get it to us. The good news is, I hope, we’ve been able to accommodate people with some peculiar or different needs. The bad news is we’ve got all kinds of forms. We’ve got forms that aren’t filled out correctly. We’ve got forms that are signed but are not complete. We’ve got forms that have been submitted five different ways from five different people with the wrong Social Security numbers. All of those are things that we’re working through piece by piece, person by person, and we’re trying, if not, more than anything, to contact the member and reassure them that their benefits and their health care will be met.


Rep Vaught: Thank you, sir.


Rep Wardlaw: Representative Eaves.


Rep Eaves: Thank you, Jake. How much time are you going to give people who didn’t realize they needed to opt out or who opted out and then discovered that it’s not the same coverage, that they don’t have the same access to their doctors and there’s doctors, hospitals that don’t take UnitedHealthcare because they’re so difficult to deal with? How much time are we going to give these folks to get back to where they were?


Bleed (EBD): Well, so they’ll have until through January. So they’ll have a month of that experience, and then there’ll be an opt-out period again coming up next fall. And I’ve heard that there are a lot of doctors and hospitals that don’t take it, but then when I contact United and ask, “Hey, what’s going on? Why isn’t this doctor or this hospital in your network?” because, of course, our RFP required a very broad network, they will show me where that doctor or hospital is absolutely seeing United patients and is billing United appropriately.


Rep Eaves: Why would they tell the patient that they don’t take UnitedHealthcare?


Bleed (EBD): I don’t know the answer to that. My guess is that United has a lot of different networks, a lot of different insurance coverages. They’re not all the same, just like the Medicare Advantage plan. One of the challenges we’ve had from the get-go is that our group, MAPD plan, is totally different than the plans you see advertised on TV. Not all Medicare Advantage plans are the same, but I think there’s so many, frankly, bad Medicare Advantage plans out there. There’s so much advertising that goes into them that it’s hard for folks to recognize, “Wait a minute. That’s the good plan. This isn’t.”


Rep Eaves: So back to what you said earlier, next fall, if they don’t like the plan that they may have inadvertently entered into, they can opt out next fall?


Bleed (EBD): Yes, sir.


Rep Eaves: And get back to where they are a month ago?


Bleed (EBD): Yeah, yeah. I mean, my expectation is that individuals would be able to move back and forth for the foreseeable future.


Rep Eaves: All right. Thanks, Jake.


Bleed (EBD): And if I can just add on that, we’re literally working individual by individual. And I’m responding to emails. I’m taking walk-ins and calls. So if there’s people that you want me to call or you want us to reach out to or you want us to look at, obviously we’re really busy, but like I said, we just arranged for a whole bunch more UnitedHealthcare people to come in, and we’re going to gang-tackle this. So let me know if there’s somebody you want me to reach out to.


Rep Wardlaw: Senator Hammer. You’re recognized.


Sen Hammer: Thank you, Mr. Chair. Jake, to that point, let me ask you, because I honestly don’t remember, the anticipated opt out rate was going to be somewhere in the 40%. Is that what you said a minute ago, give or take?


Bleed (EBD): We were budgeting around– I think our projections are at 50 is what we’ve been presenting to the committees.


Sen Hammer: What did we do to– what did we do to staff up or to help you prepare for a 50% opt-out rate? Or was that part of UnitedHealthcare’s responsibility to bring any extra help? Because if you didn’t hire up any more help, we didn’t give you the opportunity to hire up any more help– we knew this was going to be a major shift– we’ve kind of positioned you to be piled on as far as being able to handle a 50% opt-out. I just want you to speak to that and give you that platform.


Bleed (EBD): Well, certainly, so in retrospect, our staffing situation is built for the work that we do in the past, right? All state agencies tend to be run on a shoestring, and we tend to be built around whatever the workload was like two years ago. Our retirees don’t have to contact us traditionally. They get enrolled in the retiree insurance, and it’s good. They never have to do anything. They don’t have to do open enrollment. They don’t have to do any of that. So I think what we’re realizing is they never called us. Now through the MAPD with the opt-out process, they are calling us many times a day. They are long conversations, and the workload is dramatically more than we had anticipated. If you add that to the open enrollment period, which, of course, we just went through in October, definitely some challenging times. We have a number of extra help positions we added to help process forms. There are people all throughout the Department of Transformation and Shared Services that are not EBD employees that are pitching in and helping. In addition, we, as part of our broader reorganization, really made clear to our folks that we only deal with one piece of the puzzle, which is the eligibility piece, and everything else, benefits, everything else, goes to United. So we tried to divide it up like that. That said, it is a lot of work, and we suffer from the same staffing challenges that I think any employer today does.


Sen Hammer: Does UnitedHealth charge any extra for staffing up, or is this just part of teamwork trying to get through this phase to where we get transition?


Bleed (EBD): It was part of the deal, and they have every reason to want this to be successful.


Sen Hammer: And are you looking at having to, next fall, staff up any additional help to deal with those that are going to want to opt in, having opted out, or are going to want to opt out and have to opt in? Or at least I would just say this: before we get into session, we need to take an honest look at your staffing capabilities as far as those that are qualified to handle this and have that honest conversation.


Bleed (EBD): I would certainly encourage looking at creating positions specifically designed for our retiree population. Their needs, their questions, their benefits, everything about that program is different than in our actives. So I would certainly look at creating something that can help those folks out. Of course, in order to do that, we would need a budget, and of course, none of the positions, including the one I’m in now, are in next year’s budget.


Sen Hammer: All right, thank you.


Rep Wardlaw: Seeing no further questions, thank you for the report. Members, if you follow me to G, it’s Reports of Interim and Special Committees. Without objection, the committee will accept all the reports. If anybody has any questions on the reports, I will recognize them for the questions at this time, so I’ll give a second.


Rep Ladyman: I think I’ll make a comment on that.


Rep Wardlaw: You can make it.


Rep Ladyman: I’ll make a comment.


Rep Wardlaw: Yeah. I’ll recognize Representative Ladyman for a comment on his report.


Rep Ladyman: Thank you, Mr. Chair. I just wanted to comment, hopefully briefly here, but I wanted to thank Michael Grappe, the Arkansas Energy and Environmental Department, and John Warmack for the work that they did on this project. For the past two years, the team that we formed made many trips to Washington, DC to meet with members of Congress and the Department of Energy. We also attended many national legislative meetings to present this project. This bill has been adopted as a model policy by the Southern States Energy Board, which represents 16 southeastern states. I want to thank Representative Beck for presenting that bill to that organization. The American Legislative Executive Council, a national organization made up of legislators from all 50 states, have also adopted this bill as a national policy. More work is needed to solve this nuclear waste problem. I will be bringing legislation to the next session to move this work along and help solve a national, even an international, problem. Thank you, Mr. Chairman.


Rep Wardlaw: Senator Hammer.


Sen Hammer: Thank you. All I want to say on the PAN and PANDAS is to make members aware that we are participating in a $30 to $35 million big pharma trial study regarding the treatment of PAN and PANDAS. There’s been about 150 that have been through the clinic over there. And so if you encounter any of your constituents that are dealing with this or unique, we’ve sent out information to all the pediatric clinics, and we’re doing a big push on that, but just be mindful that Arkansas is at the table for a $30 to $35 million pharma trial on the treatment of this disease. And so if you get approached by a constituent, get them to the Center of Excellence so that they could maybe be considered to participate in that. Thank you, Mr. Chair.


Rep Wardlaw: Senator Elliott.


Sen Elliott: Mr. Chair, I just had a question and perhaps a request, but it’s not related to these reports, so I will wait if I need to do that.


Rep Wardlaw: That would be the proper thing. Representative Fite.


Rep C Fite: Thank you, Mr. Chair. I would just encourage members to take the G2 report and read that. A lot of work has gone into it in how to reduce the number of children in foster care, reduce the need, and a lot of people have worked hard on this, so please take that and look at it. Thank you.


Rep Wardlaw: Thank you. So without objection, the committee adopts these reports. Senator Elliott, is there–?


Future of held ARPA items

Sen Elliott: Thank you, Mr. Chair. My question is on the ARPA funds and those proposals. So I want to know, one, is there anything we need to– any information we need to give, can give, for folks who have proposals that have not been adopted? And I’m not talking just about those today but those that have not even been presented to the committees. I don’t know what to tell folks who have submitted their proposals and nothing has happened with them. Will they be handled at some point somewhere? And for those that were before us today, for example, is there anything else they need to know or do? And the–


Rep Wardlaw: The reports that were on hold in the Peer Committee have now been adopted to be sent to the JBC Committee for further options.


Sen Elliott: Yeah, but I’m sorry, there’s nothing else that we need to– they will go as they are? There’s nothing else that the folks who presented them–


Rep Wardlaw: That’s my understanding.


Sen Elliott: Okay. All right. And for those that have not been approved or unapproved by the ARPA Committee, that would send them to Peer. Is there anything we can tell those people, anything they need to do? Because these are the questions I’m getting, and I don’t have any answers.


Rep Wardlaw: I would guess that those answers lay in the new administration.


Sen Elliott: I’m sorry?


Rep Wardlaw: Those answers would lay with the new administration.


Sen Elliott: Okay. And then last thing, are all of the proposals, and I’m thinking mainly about those that have not been presented yet to Peer, are they online someplace, or is there some place we can– are they somewhere easily accessible so we can see which ones have not even been heard by the ARPA Committee?


Rep Wardlaw: I’m being told you can–


Sen Elliott: I see a nod here. They’re on your website? Okay. I don’t know if anybody else wants them, but I’d like to know if– okay, somebody else does want them. Okay, thank you. Thank you, Mr. Chair.


Rep Wardlaw: Thank you. Senator Ingram, you’re recognized for a question.


Sen Ingram: It’s not a question. It’s sort of a follow-up on Senator Elliott. As a member of the ARPA Steering Committee, I guess, I had written to the governor. And there were certain things that cut across every Senate district and every House district of the state, one being broadband. That was easy for us to all agree on to do that. Water and sewer, we all know we’ve got far greater needs than the amount of money that we’ve recommended to address water and sewer issues in the state. And the third thing that we did with the money, of course, this group, everybody, was to reimburse hospitals for COVID, and that was what the money was used for. But I had urged the governor, and I do the same with this body, that next year, with the remainder of the money that is available, that health care is the most important thing, I think, in this state. It affects everything we do. It has a tremendous cost impact to our budget and that we could do something within a 30-day period bringing together UAMS, DHS, Department of Higher Education that could look at everything from prioritizing nursing, how many nurses do we need to put out a year, where we need to teach this, how do we do this most effectively, to just what UAMS believes the priority is to get our citizens healthy. And there’s none any worse than the citizens of the Delta. And we have a tremendous disparity of a child that is born in the Delta probably has a seven to eight-year different lifespan than a child born in Northwest Arkansas. So I would urge that we have a one-time opportunity to spend a great amount of money. And one thing that cuts across every district in this state is health care, and I would urge this group to take a look at prioritizing how we begin a program to make our population as healthy as we possibly can. Thank you for some leeway there, Mr. Chair.


Rep Wardlaw: You’re welcome. And so with that, committee, we still have business. So let’s go to H1A. I need a motion for review. I have a motion. I have a second. All those in favor say aye. All opposed? Ayes have it. I need the same motion for item 1B. I have a motion. I have a second. All those in favor say aye. All opposed? Ayes have it. So follow me along to 3C. I need a motion for approve on 3C. I have a motion. Do I have a second? I have a second. All those in favor say aye. All opposed? Ayes have it. With that, members, we have no new business and no further business. We stand adjourned. Merry Christmas.