Bid fails to block managed-care shift

A judge Wednesday declined a request by owners of residential care facilities to temporarily block the transition to managed care — planned for Friday — for about 40,000 Arkansans with significant mental illness or developmental disabilities.

After a hearing that stretched for about 7½ hours, Pulaski County Circuit Judge Chris Piazza said the facility owners hadn’t shown the start of the program would cause them the “irreparable harm” needed to justify such an order.

“We’ve got a system that may or may not work, but [state officials] think it’s going to, and it’s what the Legislature ordered,” he said.

Piazza said he would keep the case open for six months so the plaintiffs could renew their request “if we run into a disaster.”

Ashley Hudson, an attorney for the residential care facilities, said her clients hadn’t decided Wednesday evening whether to appeal.

The shift to managed care is the second phase of an initiative, approved by the Legislature in 2017, aimed at reducing the cost of caring for Medicaid recipients who have serious mental illness or developmental disabilities.

Under the first phase, which started last year, managed-care companies began coordinating patients’ care in exchange for monthly payments of $173 per recipient.

In March, the companies are scheduled to take responsibility for all of the care recipients receive in exchange for monthly payments ranging from $998 to $12,671 per person. Care includes medical expenses, counseling and help with such things as finding housing and performing daily living tasks

The payments vary according to whether a recipient is a child or adult, the severity of a person’s disability and the region of the state where the recipient lives.

The shift to the second phase was originally scheduled to start Jan. 1, but was delayed to March 1 to allow more time for the companies to prepare and for the department to provide information to recipients and their families.

One company, Forevercare, dropped out last month after the Human Services Department rejected the provider’s request to delay the start of the second phase until July 1.

At the hearing, care facility representatives said many residents who have been assigned to one of the managed-care companies have yet to receive membership cards, which the facilities will need to bill the companies.

The facility representatives said they also hadn’t been able to access companies’ Internet portals that they will use to submit the claims.

Ed Holman, chairman of the Arkansas Residential Living Association’s board and the owner of two residential care facilities, said the managed-care companies’ contracts with providers give the companies up to 45 days to pay claims, creating a potential financial crunch as providers wait for payment.

“It would be a cash problem in my facility, and probably most of the other facilities across the state,” he said.

By comparison, the regular Medicaid program pays claims within about a week, he said. Providers have been told that the managed-care firms will continue to pay Medicaid’s rate for at least 60 days, he said, but the providers don’t know what the rates will be after that.

The facilities receive up to $37 per day from the Medicaid program to help residents with daily living tasks, such as dressing and bathing.

The residents also pay $750 a month for room and board.

In affidavits, leaders of the three managed-care companies still participating in the program said they mailed membership cards to beneficiaries within the past week.

Paula Stone, a deputy director of the Human Services Department’s Medical Services Division, said each of the companies has an administrator with experience paying claims and that the companies all passed a “readiness review” conducted by a consultant last month.

The department and each of the companies has set up “command centers” to respond to queries from recipients and providers, Stone said.

“No system rolls out perfectly,” she said. “There are always bumps.”

“It would be a cash problem in my facility, and probably most of the other facilities across the state.” — Ed Holman, chairman, Arkansas Residential Living Association’s board