Managed care to start March 1 as planned, judge rules

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LITTLE ROCK, Ark. – A judge denied a request Wednesday for a delay in the state’s transition to a managed care system. 

It will go live Friday as planned.

The system changes how Medicaid is billed for services to 40,000 Arkansans with severe mental illness or developmental disabilities.

A state law passed in 2017 created provider-led Arkansas shared savings entities, known as PASSEs, that operate like managed care companies. Starting March 1, three of them will be responsible for paying for members’ Medicaid services.

Some providers are concerned that the deadline would be too rushed because they don’t have the necessary information from the PASSEs, like logins, to be able to bill Medicaid. During a hearing Wednesday, attorneys argued it creates a domino effect: providers wouldn’t be paid for services rendered and then over time, they wouldn’t be able to offer them, which they said would mean this vulnerable population would have nowhere else to go but the streets, jail or a hospital.

The Arkansas Department of Human Services asked Pulaski County Circuit Judge Chris Piazza to dismiss the case, arguing there’s no irreparable harm since there’s no evidence the new system won’t work and providers won’t be paid.

DHS also noted these providers voluntarily entered into contracts with the PASSEs. 

After the nearly eight-hour hearing, Judge Piazza sided with DHS, agreeing there’s no irreparable harm because nothing has happened yet. Even though he denied the temporary restraining order, Piazza wants to keep the case open for six months in the event that the state “runs into a disaster.”

DHS delayed the system’s rollout from Jan. 1 to March 1. During that time, a fourth PASSE dropped out, leaving about 2,500 patients to be split up between the three remaining PASSEs. 

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