Behavioral health providers to merge

Groups would link 44 state communities

Four Arkansas behavioral-health providers plan to merge, creating a nonprofit system spanning 41 of the state’s 75 counties.

Officials at Ozark Guidance, Professional Counseling Associates, Midsouth Health Systems and Counseling Associates have signed a letter of intent to combine and form a new entity named Arisa Health, the group announced Wednesday.

The proposed group would connect offices in 44 municipalities, including six central Arkansas cities and towns, with the aim of integrating and expanding behavioral-health services.

Laura H. Tyler, the Ozark Guidance chief executive who will serve as the proposed group’s CEO, said that combining the organizations will help them remain “sustainable and viable” in the vicissitudes of the health care sector.

“We cannot fail to be there to take care of the clients,” she said. “The whole reason we want to do this is to ensure we are there.

“As we’re seeing changes come at us in the payer environment, the compliance environment, [we were] wanting to look for ways we can get some scale and

efficiency, and be prepared for the future.”

The merger needs regulatory approval before it’s finalized, but if approved, the combined entity would bring in around $85 million in annual revenue — more than many of the state’s hospitals.

That size matters, said Ozark Guidance organizational marketing director Kyle Gibson, in terms of negotiating contracts with other health care entities and vendors, and has the potential to streamline services for patients.

“If you live in Jonesboro and you’re a client, and you’re up in Northwest Arkansas visiting and you have some need for services, you can walk into our office in Springdale or Fayetteville, and that’s the same company,” he said.

All four groups hold annual contracts to serve as community mental health centers, providing care for people with low incomes supported by funding administered by the state Department of Human Services.

Under those contracts, the centers provide treatment to Arkansans living in poverty and with severe mental illness. Tyler said the merger won’t affect that role, with entities continuing to be overseen by local boards.

Wednesday’s announcement comes after the September folding of decades-old Little Rock Community Mental Health Center, whose sudden closure interrupted therapeutic services for more than 2,000 clients.

That group’s administrators attributed its collapse to money problems, linked in part to state behavioral-health policy changes that some mental-health providers have criticized since the rules’ implementation.

New payment models and a managed-care system rolled out last year have eroded revenue, some providers say, while the Human Services Department has said the moves improve access and cut away barriers to care.

Tyler said that those policy changes were “certainly a factor” in the decision for the four groups to reposition themselves. As one entity, they also will be able to buy tools and technology the providers couldn’t afford on their own.

Buster Lackey, executive director for the Arkansas office of the National Alliance on Mental Illness, said he’d heard varied feedback from colleagues regarding the groups’ announcement.

Some advocates he’d spoken with were “skeptical that bigger is better,” he wrote in an email, and clients and patients may not be sure what the merger means for them.

From the alliance’s perspective,

“the staff and employees will have a much larger pool of resources to pull from,” he wrote.

“We believe that there will be better outcomes for clients and patients, it may not be seen immediately, [but] over time patients and clients should see the difference.”

Behavioral-health services are a consistent weak spot in the fabric of local care, with more than 1.2 million Arkansans living in a “mental health professional shortage area,” according to a Kaiser Family Foundation analysis.

A team of University of Michigan public-health researchers also has found that Arkansas has the nation’s lowest ratio of psychiatrists to population, with just eight doctors in that specialty for every 100,000 people.

Officials hope the proposed health system will expand services that are available now in just one or a few areas around the state, such as school-based services or a residential program for teen girls now only offered in Conway.

But Tyler acknowledged that the proposed new company’s large footprint could turn into a problem, were it to become insolvent or stop doing business, saying the group would “pivot and be prepared” should that look like a danger.

“I think it’s a very fair question, because if we were to fail, that would create a terrible risk,” she said.

As of the fiscal year that ended in July 2018, the four nonprofits looked financially secure, according to their most current tax forms and audits available on public databases.

The providers that wish to merge offer treatment and therapy under a variety of models, including individual and group outpatient services. Mid-South Health Systems, with a presence in 13 northeast Arkansas counties, is the largest.

Administrators from that group, Professional Counseling Associates in North Little Rock and Counseling Associates in Conway didn’t immediately return calls about the merger Thursday.

Tyler said she didn’t have a head count of the proposed group’s population base, but Springdale-based Ozark Guidance served more than 20,000 patients last year.

All 1,275 of the four providers’ employees will keep their jobs, and a meeting next week will initiate approval processes that include getting the Human Services Department’s blessing and combining Medicaid numbers.

With the relevant approvals, the group expects to begin doing business under the Arisa Health name in 2020.

“It’s going to put us in a better place, as far as size,” Gibson, the marketing director, said. “Obviously the name of the game for us is serving clients, serving needs.”