Some Disabled Arkansas Children Might Lose Medicaid Benefits Under New Interpretation of Eligibility Rules

Arkansas officials this week confirmed that a new interpretation of eligibility requirements for a Medicaid program called the Tax Equity and Fiscal Responsibility Act, or TEFRA, could disqualify some severely disabled children from receiving benefits, the Arkansas Democrat-Gazette reports (Shurley, Arkansas Democrat-Gazette, 10/10). TEFRA, which covers approximately 3,000 Arkansas children with severe disabilities, has cut 270 children from the program since July 1 as a result of state budget reductions. Parents of 241 children have received notices giving them 30 days to illustrate why their child should continue to receive services through the program (Kaiser Daily Health Policy Report, 9/10). Since then, most of the families have had their benefits reinstated, but only if they provide additional medical information to confirm eligibility. In late June, administration of TEFRA was switched from the Division of Developmental Disabilities Services to the Division of Medical Services -- both within the Human Services Department -- prompting a re-examination of how eligibility rules are interpreted. A review of the rules found that children with disabilities must "presently require institutionalization" to receive TEFRA benefits. However, some children currently enrolled in the program do not require institutionalization. As a result, program officials have denied benefits to children who have been enrolled in the program for some time. To prevent the program from dropping the children, DHS officials have submitted a waiver to CMS that would permit a "more inclusive interpretation of eligibility guidelines," the Democrat-Gazette reports. The waiver would also require parents to pay premiums based on income, ranging from 1% of annual income for those earning $25,000 per year to 2.75% of annual income for those earning $200,000 per year. The Democrat-Gazette reports that CMS is still in talks with the state about the waiver (Arkansas Democrat-Gazette, 10/10).