Editor's Note: This is the third in a three-part series examining Arkansas' new Medicaid work requirements. Parts 1 and 2 appeared in the Saturday and Sunday editions.

The Center for Budget and Policy Priorities, a liberal-leaning D.C.-based think tank, warned that exemption categories to Arkansas' new Medicaid requirements would inevitably confuse beneficiaries.

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"These policies are so inherently complex that even if they try to put in exemptions and exceptions, they're still hard to implement and hard for people to take advantage of," Jennifer Wagner, a senior policy analyst with the CBPP, said in a recent conference call.

The confusion may be exacerbated by the fact that the Arkansas Department of Human Services, in an effort to minimize expenses, intends to administer the requirement without hiring any new employees.

"Arkansas has tried to do it in a way that hasn't increased staffing costs," Wagner said. In pursuit of a fully automated system, DHS expects all beneficiaries to report through the web portal, an unusual policy feature that required approval from federal CMS.

DHS Director Cindy Gillespie has said the online-only reporting requirement is an effort to save money. "If you implement it in the old-fashioned way of 'Come into our county office,' we would have to hire so many people," she said in March, soon after the waiver was approved.

Gillespie said the agency's long-term goal was to make all of its communications electronic. She also framed the portal as a means of pushing younger beneficiaries to gain computer literacy skills. "We need to help them get an email (address) and learn how to deal in that world, or they will never be successful," Gillespie said.

But the Urban Institute analysis of 2016 Census Bureau data found that among the 69,000 beneficiaries likely to be subject to the requirement, more than a quarter had no Internet service at home or regular cellphone service. More than half lacked broadband access. An online-only requirement is "a curious thing to do in Arkansas, which has the second-lowest internet access (rate) in the entire nation," said Anuj Gangopadhyaya, lead author of an Urban Institute study on Arkansas Works published in May.

Marquita Little, health policy director for Arkansas Advocates for Children and Families, noted that DHS hasn't built a dedicated system to handle the complex new requirements.

"It's the same Access Arkansas page that people have always used," she said. "We've kind of piecemealed the IT part of this. ... I think it would have cost more to build a system that was more user-friendly."

Joan Alker, executive director of Georgetown University's Center for Children and Families, pointed out DHS has had serious IT problems in the past.

"Arkansas does not have a great history in terms of its eligibility and enrollment systems working well to begin with," she said. In 2015, tens of thousands of beneficiaries were kicked off of Medicaid because of changes in the state's income verification process — a mess that took months of work to resolve.

In a monitoring plan DHS submitted to federal CMS in May, the agency noted another detail: "The portal will be available daily between 7 a.m. and 9 p.m. except for times when it is necessary to take the portal offline for system upgrades." That suggests the system could be unavailable for up to 10 hours out of every day. Asked why the portal would be offline so often, DHS spokeswoman Amy Webb said by email that "this is the time when the system does updates, maintenance, and handles batch processing, etc."

State Sen. Jim Hendren, R-Gravette, admitted this part of the rollout could be rocky.

"There's no question there may be some problems we'll have to solve in regards to people with limited Internet access or those IT problems at DHS," he said. "But that does not mean you just do nothing and abandon the effort to continue to help people find employment and job training."

Computer systems may also help explain why Arkansas has kept its implementation costs much lower than that of Kentucky, which intends to begin implementing its work requirement in July. DHS says it has spent about $7.6 million on the work requirements this fiscal year. The figure includes $6.8 million spent on the IT system changes, 90 percent of which were paid by federal funds.

In contrast, the Louisville Courier-Journal reported in February that Kentucky increased its administrative budget for Medicaid by about $187 million for the fiscal year. Dustin Pugel, a policy analyst with the Kentucky Center for Economic Policy, a think tank in Berea, said most of that amount is expected to go toward IT contracts and workforce services administration.

"We already had an online application system and we just expanded that functionality to accommodate the reporting of activities," Webb wrote in an email when asked about the discrepancy in costs between the two states.

Like Arkansas, Kentucky is trying to avoid bringing on new staff to administer the requirement. "(Kentucky Gov. Matt Bevin) has said more than once they don't plan on hiring a single person to help administer this waiver," Pugel said. (Kentucky's work requirement is being challenged in federal court by a group of beneficiaries who say the Trump administration overstepped its legal authority when it approved the state's waiver, a case that could have ramifications for Arkansas.)

In Arkansas, the other $800,000 spent by DHS paid for a contract with the Arkansas Foundation for Medical Care to place phone calls to beneficiaries. DHS has also sent letters to enrollees and made a series of informational web videos. But informing 69,000 people of a complex new requirement will take a massive outreach effort, and DHS is expecting much of that task to fall to other outside parties: commercial insurance carriers.

In Arkansas, most Medicaid expansion beneficiaries are covered by private plans sold by insurers on the state's health insurance marketplace, rather than regular fee-for-service Medicaid. That unusual approach to expansion — dubbed "the private option" — means carriers have a financial stake in preventing the work requirement from eroding coverage gains.

Max Greenwood, a spokeswoman for Arkansas Blue Cross and Blue Shield, the largest carrier in the state, said the company is already contacting Arkansas Works members subject to the requirement. DHS will send each carrier a weekly list of their members who are exempt and those in danger of losing coverage.

"We've also reached out to all our agents, our brokers, our customer service teams, our provider partners and our retail stores to help provide additional support and direct member engagement," Greenwood said.

However, many beneficiaries rarely communicate with their insurance carrier. Providers such as hospitals typically won't be able to see when a patient is in danger of losing coverage.

"Hospitals will be helpful, and most hospitals do have Wi-Fi access or the ability to find someone a computer terminal," the AHA's Ryall said. "But, we don't have the in-depth information to identify someone who comes into the hospital and says, 'You need to enter this information.' Our people will certainly be asking those questions, but it will be up to the patient to let us know if they need assistance."

The requirement will indeed create much work — for beneficiaries logging their hours, for DHS staff vetting paperwork, and for insurers, providers and advocates helping thousands of enrollees navigate a new layer of bureaucracy. It is less clear whether the policy will lead to either significant gains in employment or reductions in coverage. But in the view of Hendren and other Republicans, the work requirement is a vital part of keeping Arkansas Works manageable.

"I want you to understand, the purpose is not to take away health insurance for people. The purpose is to make the program sustainable," Hendren said.

"We know we're always going to have people who get into a bind, and we certainly know that it helps to provide health care to folks in those situations," he added. "But we also know that there's no free lunch and money doesn't grow on trees, and we have to do our best to manage the program so that it doesn't become unsustainable and we have to make dramatic cuts."

This reporting is made possible in part by a yearlong fellowship sponsored by the Association of Health Care Journalists and supported by The Commonwealth Fund. It is published here courtesy of the Arkansas Nonprofit News Network, an independent, nonpartisan project dedicated to producing journalism that matters to Arkansans. Find out more at arknews.org.