Lawmakers continue probe into unpaid Medicaid claims under new managed care system


LITTLE ROCK, Ark. – After the 92nd General Assembly adjourned sine die Wednesday, many lawmakers stuck around for a packed meeting at the Arkansas Capitol involving all the key players in the state’s new managed care system.

It changes how Medicaid is billed for services to about 50,000 clients with significant mental illnesses or developmental disabilities.

Three companies, known as PASSEs, pay providers with funds from the Arkansas Department of Human Services (DHS). However, providers have told lawmakers they have billed claims and not been paid.

“They [PASSEs] are certainly all capable,” Stephanie Smith, the COO of Easterseals Arkansas, told lawmakers. “They are national insurance companies.”

St. Sen. Kim Hammer informed the room the PASSEs have received nearly $270 million in payments from DHS.

After hearing testimony from providers, lawmakers literally brought everyone to the table involved with the system from PASSE to DHS leadership to officially swear in and explain the problems. 

The director of DHS, Cindy Gillespie, said the money has not made it to some providers mainly because of a software issue.

“These are not large providers who can go for months carrying large, unpaid claims,” Gillespie said. “For those reasons, it becomes problem number one.”

The PASSEs said they have come up with temporary solutions that should be in place by the end of the week, but lawmakers want a permanent fix as providers continue to extend lines of credit and some clients remain unsure about their services.

“That’s the problem nobody’s talking about here is the fact that patients suffered because they couldn’t get seen by their doctors anymore,” said St. Sen. Missy Irvin, R-Mountain View. 

The PASSEs, DHS and a group of providers will meet again next week.

The new system took effect on March 1 after DHS pushed back its original January start date. A lawsuit tried to delay the rollout, but a judge ultimately decided to put a pin in the issue to see how everything pans out over the next six months.

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