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A second managed-care company has dropped out of a state effort designed to reduce the cost of providing medical care and other services to Arkansas Medicaid recipients who are developmentally disabled or mentally ill.

The decision by Forevercare came after the state Department of Human Services rejected the firm's request to delay the implementation of the second phase of the initiative for a second time, to July 1 instead of March 1.

"The chief consideration that we always place is on our commitment to delivering the highest quality of services to our members and our provider network," Marian Dezelan, a spokesman for Pittsburgh-based Gateway Health Plan, one of Forevercare's owners, said Wednesday.

"Based on our assessment of a number of outstanding issues with the state's implementation timelines, we felt we would not be able to continue to uphold that commitment to our members."

Under the initiative's first phase, which started last year, Forevercare and three other companies have been coordinating the care for about 40,000 Medicaid recipients in exchange for monthly payments of $173.33 per recipient.

The second phase calls for the companies to 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.

Total spending on the recipients by the state's Medicaid program now totals about $1 billion a year, state officials have said.

The second phase had been scheduled to start this month. The Human Services Department announced in November that it would delay the start date to allow more time for the companies to prepare and for the department to provide information to recipients and their families.

In a letter to state Human Services Director Cindy Gillespie dated Tuesday, Forevercare President Mike McCabe said the company had decided "with much reluctance" not to enter the second phase.

"Internal requirements" prevented it from being able to take full responsibility for recipients' care on March 1, he said, adding that the company also believes "there are Program operational issues which need to be resolved."

Dezelan declined to say what those operational issues are.

The other three companies, Arkansas Total Care, Empower Healthcare Solutions, and Summit Community Care, have "signed agreements and have chosen to move forward to the next phase of implementation," the department said in a news release Wednesday.

A fifth company, Arkansas Advanced Care, was approved by the Arkansas Department of Insurance to participate but dropped out before the first phase started, Marci Manley, a Human Services Department spokesman said.

Amy Webb, another department spokesman, said in an email Wednesday that the department has been working with the remaining companies to "complete system testing, train providers in billing and expand provider networks."

The 7,600 Medicaid recipients who have received care coordination from Forevercare will be assigned to other companies next month, Webb said. They will then have 90 days during which they can switch to another company.

Loretta Cochran of Pottsville said that the state is losing what she considers to be the best of the four managed-care companies and that she's worried the remaining companies won't be ready for March 1.

She's the guardian of a 27-year-old man with autism who was assigned to Forevercare for care coordination, and she has a 17-year-old son with autism who was assigned to Arkansas Total Care.

"Foevercare had a chance to really impress the socks off me" while helping her with a health care issue with the 27-year-old, she said.

Act 775, passed by the Arkansas Legislature in 2017, requires the companies to be at least 51 percent owned by health care providers, to contract with providers across the state and to have at least $6 million in reserves.

In addition to Gateway Health Plan, Forevercare's owners were listed by the Insurance Department as including Community Service Inc., a Morrilton-based nonprofit that provides counseling and other services for children in 11 Arkansas counties; a company formed by the Rehabilitation Network of Arkansas, which represents physical, speech and occupational therapy clinics; a company formed by the Arkansas Pharmacists Association; and Ouachita County Medical Center in Camden.

State officials have said the managed care effort will save the state money by better coordinating recipients' care. Through the state's insurance-premium tax, the state will also be able to recoup 2.5 percent of the payments to the companies, officials said. That will 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 will keep all of the premium tax, according to officials.

The 2017 law calls for at least half of the tax revenue to go toward reducing the number of Arkansans with developmental disabilities who are on a waiting list for home-based services. About 2,900 people were on the list as of December 2017. Webb said she didn't have updated information Wednesday on the number of people on the list.

NW News on 01/18/2019

Print Headline: Managed-care provider leaves state's program

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