State fines company more than $300,000 for Medicaid failure

Months after an Arkansas agency fired a company it had hired to provide rides to Medicaid recipients, the state fined the replacement firm more than $300,000 over similar issues, state officials told lawmakers Monday.

Atlanta-based Southeastrans was fined $500 for each of the 645 rides it had failed to provide to Medicaid recipients in recent months, said Janet Mann, director of the state Department of Human Services’ Division of Medical Services.

In February, Southeastrans took over a contract to provide nonemergency medical transportation to Medicaid recipients in 32 counties after the state fired St. Louisbased Medical Transportation Management, which had also failed to provide hundreds of trips.

The state assessed a larger amount of damages — $3.7 million — against that company over issues that also included failing to submit required records on its drivers and equip its vehicles with cameras.

During a meeting Monday of the state House and Senate public health committees, Sen. Ronald Caldwell, R-Wynne, said he heard from a constituent who missed three appointments for chemotherapy because of Southeastrans’ failures.

“That’s why you’re here today,” Caldwell told company representatives at the

meeting. “It really is a life-and-death situation.”

Rob Zachrich, Southeast-rans’ chief operating officer, said its subcontractors have struggled to hire drivers amid the “competitive labor market” in northwestern Arkansas.

Some subcontractors have also dropped out of Southeast-rans’ network altogether or reduced their fleet sizes due to new requirements, such as cameras and increased inspections, and rising vehicle insurance rates, he said.

To fill gaps, Zachrich said, his company has increased what it pays to providers, made $118,300 in interest-free

loans to some of them to help with expenses, and has been adding its own vehicles and drivers.

The company expects to have a fleet of 67 vehicles in the state by the end of this month, he said.

“Our goal is to find people who want to be entrepreneurs, who want to start with one vehicle or maybe two vehicles, and hand those vehicles off over time,” Zachrich said.

He said the company successfully completed 99.5% of the 71,000 trips scheduled by Medicaid recipients each month and “will not rest” until the rate reaches 100%.

Medical Transportation Management was originally awarded the contract for a four-region area in northern, central and eastern Arkansas, including Pulaski County, after submitting the lowest bid. Its contract called for it to be paid about $21 million a year.

Southeastrans had submitted the second-lowest bid for the same area.

Medical Transportation Management blamed its problems in part on the refusal of the Area Agency on Aging of Western Arkansas, which had previously served much of the area, to enter into a contract with it. Zachrich said his company has a contract with the agency on aging.

Mann said after Monday’s meeting that Medical Transportation Management hasn’t yet paid the $3.7 million penalty.