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Rules allowing the state to pay managed-care companies to provide services to about 40,000 mentally ill or developmentally disabled Medicaid recipients cleared the Legislature's public health committees on Thursday.

The rules would implement the second phase of an initiative, authorized by the Legislature last year under Act 775, aimed at reducing the cost of caring for certain Medicaid recipients who have expensive health needs.

This year, the five companies began coordinating the recipients' care in exchange for monthly payments of $173.33 per recipient.

Under the second phase, which would start next year, the companies would receive larger payments in exchange for paying for all of the recipients' care, including medical expenses, counseling and help with needs such as finding housing and performing daily living tasks.

According to information submitted to the House and Senate public health committees, the initiative would reduce state and federal Medicaid spending on the recipients, which now totals about $1 billion a year, by about $47 million next year.

Paula Stone, deputy director of the state Department of Human Services' Medical Services Division, said the bulk of the savings would come from keeping recipients out of "high cost settings" such as hospital emergency rooms and psychiatric wards.

For instance, she said, the companies will be required to ensure a provider is available to respond to emergencies at a recipient's home.

"Instead of them getting in an ambulance and going to a hospital, if there's a mobile crisis service, then someone can go to their house, and a lot of times you can have some stabilization there in a community setting," Stone said.

Through its premium tax, the state would be able to recoup 2.5 percent of the payments to the companies. That would generate revenue for the state because 70 percent of the funding for the payments to the companies would come from federal Medicaid funds, but the state would keep all of the premium tax.

The tax would generate an estimated $23.1 million next year. Half of that would go toward reducing the number of Arkansans with developmental disabilities who are on a waiting list for home-based services, such as help with daily living tasks.

About 2,900 people were on the list as of December 2017.

Human Services Department spokesman Amy Webb didn't respond to requests on Thursday for an update on the number of people on the list and information on how many people could be removed from it using money from the premium tax.

The recipients who would be assigned to the companies include about 32,000 with severe mental illness and 8,000 with developmental disabilities, Robbie Nix, the Medical Services Division's director of organized care, said.

Act 775 requires the companies, known as provider-led shared savings entities, or PASSEs, to be at least 51 percent owned by health care providers and to contract with providers across the state.

Thomas Grunden, director of Little Rock Community Health Center, which has a small ownership stake in one of the companies, said after the meeting that he's skeptical the initiative will end up providing better care.

"I support the PASSEs," he said. "I hope they work out and that everything is achieved. But at the same time you have to remember what the PASSEs are coming from. They're coming from trying to manage costs and reduce costs."

With no members objecting, Rep. Jeff Wardlaw, chairman of the House public health committee, declared the rules reviewed.

They will go to the Legislative Council's Administrative Rules and Regulations subcommittee on Monday and the full council for final approval on Oct. 19.

Metro on 10/12/2018

Print Headline: Managed-care Medicaid rules pass committees

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