Ethics panel clarifies Medicaid income rule
Posted on Saturday, May 17, 2008
State law doesn’t require lawmakers to disclose income received through Medicaid for sales to private citizens for health-care services or prescription drugs, the Arkansas Ethics Commission said Friday.
But the commission said state law requires lawmakers who are doctors or pharmacists to disclose payments exceeding $ 1, 000 under a contract with a state agency for services or prescription drugs to a particular group or type of patient. The agreement to provide services is between a health-care provider and an establishment of the state, the commission said.
Recent filings by certain lawmakers indicate “a possible misunderstanding” of what is and what is not required to be disclosed under Arkansas Code Annotated 21-8-901, the commission said.
The law requires lawmakers to disclose any goods or services sold during the previous calendar year valued at more than $ 1, 000 to an office, department, commission, council, board, bureau, committee, legislative body, agency or other establishment of the state by the lawmaker, his spouse or any business in which he or his spouse is an officer, director or stockholder owning more than 10 percent of the stock.
But the statute doesn’t require disclosure of income received through a third-party payment such as Medicaid, the commission said.
Last month, Sen. Percy Malone, D-Arkadelphia, amended his personal financial disclosure report to disclose that he is an officer of a corporation that owns pharmacies that last year sold prescription drugs to the Arkansas Medicaid program. The commission’s opinion suggests that he didn’t have to release that information, although the opinion doesn’t refer specifically to his case.
Malone filed the amendment after the Arkansas Democrat-Gazette questioned why he hadn’t disclosed on his personal financial disclosure report that one of his companies is being paid under contracts with the Department of Human Services and as a Medicaid provider.
Malone has said he disclosed the contracts on disclosure forms with the state Department of Finance and Administration and he thought that was sufficient.
He’s president and majority stock owner of W. P. Malone Inc., which owns Pharmacy Care of Arkansas. That company does business as Allcare Pharmacy, which has a $ 25, 000-a-year pharmacy services contract with three state human development centers and a $ 200, 000-ayear contract with the Arkansas Health Center in Benton, state officials said.
The firm was paid $ 2. 89 million last fiscal year to provide prescription drugs covered by Medicaid to about 4, 400 recipients, according to the department.
W. P. Malone also owns Pharmacy Care of Arkansas in Arkadelphia, which was paid $ 4 million in the last fiscal year by the Medicaid program, said Julie Munsell, a spokesman for the state Department of Human Services. Malone said Friday that state law was confusing about whether he had to report filling prescription drugs for private citizens whose drugs are paid through the Medicaid program.
“It will be helpful to have a clear indication [of what to report ]. Before, we had to guess about it,” he said. “As long as we all know the rules, we can abide by them. That’s the bottom line.” Rep. Eugene Shelby, D-Hot Springs, a doctor, also reported selling medical services to the Department of Health and the Arkansas Medicaid program last year.
Last year, the Health Department paid $ 6, 325 to Shelby for services to HIV-positive patients under the Ryan White program, according to the department.
In fiscal 2007, Shelby was paid $ 1, 044 by the Medicaid program, according to the Human Services Department.
Graham Sloan, the commission’s executive director, said the commission instructed the staff to prepare the advisory opinion during a recent meeting.
Commissioner Steve Bryant of Batesville, a pharmacist who is a Medicaid provider, said he asked the commission to clarify what lawmakers needed to disclose after he read an article in the Democrat-Gazette that raised the question.
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