State licenses care provider, fourth OK'd under PASSE program

State officials licensed a fourth company to provide medical care and other services to the nearly 50,000 Medicaid beneficiaries with significant behavioral health needs or developmental disabilities, according to a Tuesday announcement.

CareSource PASSE has been approved for a license by the state Department of Insurance to participate in the Provider-led Arkansas Shared Savings Entity, or PASSE program, and will become a new option for Arkansans with complex behavioral health issues and individuals with intellectual and developmental disabilities, the company announced Tuesday.

The firm will have an office in Little Rock and will employ local, community-based care coordinators statewide, according to CareSource.

CareSource PASSE will have to go through a review, "which is where we go in and verify that they have all the systems and protections in place to serve the beneficiaries and to make sure that beneficiaries' health and safety is protected," said Mark White, chief of legislative and intergovernmental affairs for the Arkansas Department of Human Services.

The three groups currently operating under the state program are Arkansas Total Care, Employer Healthcare Solutions and Summit Community Care, White told the House and Senate Public Health, Welfare and Labor committees at a Tuesday meeting.

The Provider-led Arkansas Shared Savings Entity is the model of organized care created by Act 775 of 2017, White said.

Each PASSE organization is a partnership between Arkansas Medicaid providers, and providers must own at least 51% of each group, he said. Each PASSE also can include partnerships with organizations that perform administrative managed-care functions, such as claims processing and membership enrollment, he said.

The CareSource PASSE includes James A. Zini D.O., P.A. and the Zini Medical Clinic; Chenal Family Therapy PL; Ashley County Medical Center; Rehabilitation Network Outpatient Services; Acadia Healthcare Company Inc.; and CareSource, a multistate health plan, the company said in its news release.

The state Department of Human Services pays a monthly flat fee for each beneficiary assigned to each PASSE to provide care coordination and various services to the beneficiary, White said.

But Sen. Kim Hammer, R-Benton, said that "we were led down this path thinking that it was going to be a cost savings."

"But ... it seems like the cost continues to go up each year and, when you do the comparison of quarters, it seems to be a little bit of fluctuation," he said. "I don't see the trend going down. I see the trend going up."

Hammer asked for an explanation from the state Department of Human Services and the program participants regarding the costs.

White said that PASSE is a new concept that started in 2019, "so it has been a learning process."

"As we go through and get those services up and running to those beneficiaries, I think we have seen savings," he said.

The total PASSE savings totaled $81 million from March 2019 through the second quarter of fiscal 2021 based on the Medicaid Transformation Savings Scorecard, the Department of Human Services said in a written response to a question from the legislative committees.

White said the state Department of Human Services generates the scorecard and that the savings are measured against the baseline established by the Arkansas Healthcare Reform Task Force of 5% a year based on health care inflation.

The PASSEs have a higher population than originally projected, and that could be reflected in costs, he said.

Hammer said he has constituents who work for PASSEs and that one of them sent out an email that said, "Y'all need to find a job by the end of the year," and then that "message seemed to get retracted."

He asked whether this PASSE's employees are going to lose their jobs between now and the end of this year or whether that issue had been rectified.

Mitch Morris, chief executive officer of Empower Healthcare Solutions, said the firm is going through "a small change" in its ownership and organizational structure, "so one of our primary service contractors did send that communication to a number of employees."

"[But] I can tell you that is not the case," he said. "All those employees that received that ... have received confirmation ... that their employment will continue, and so that should not be any question at this time."

With a fourth PASSE planning to operate in Arkansas, Hammer questioned what happens if one of the other groups goes out of business and the population has to be be picked up by the remaining organizations.

Elizabeth Pittman, director of the Department of Human Services' Division of Medical Services, said any PASSE must provide 120 days' notice to end its contract with the state, and there would be transition for the beneficiaries of the PASSE.

Rep. Josh Miller, R-Heber Springs, asked about an email from one of the PASSEs about its plan to cut reimbursement rates nearly in half to the providers that the PASSEs purchase from. He said the email prompted providers to tell their customers that they are not sure that they can sell them parts for equipment such as wheelchairs because they weren't sure if they'd be able sell them for the rates that they would be reimbursed.

John Ryan, president and chief executive officer for Arkansas Total Care, said, "I will take accountability for our organization having said that in an email that you are talking about."

"We did very quickly retract that and did not move forward with that," he said.

Miller pressed Ryan on why the PASSE planned to cut its reimbursement rates so much.

"I think that in that specific instance, we did have providers that we did reimburse at the lower level and trying to maintain the consistency in the market for that reimbursement level was the answer to your question," Ryan said.

Miller said he wanted to make it "crystal clear" that if something like that happened again, then legislation would be filed to eliminate the PASSE program.

"There are some of us out there who are in touch with providers and in touch with the people that y'all serve and know and hear about some of the crap that is going on," he said.

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