Judge Rejects Request To Delay Arkansas’s Transition To Managed Care For Mentally Ill

Feb 28, 2019

Ed Holman, chairman of the Arkansas Residential Assisted Living Association, on the witness stand Wednesday while being questioned by plaintiff's attorney Ashley Hudson.
Credit Michael Hibblen / KUAR News

Arkansas will transition as planned Friday to a managed care system for treating the state’s mentally ill. After more than seven hours of arguments and testimony, Pulaski County Circuit Judge Chris Piazza refused on Wednesday night to issue a temporary restraining order requested by a group of residential care facilities.

Debate centered on whether three managed-care companies are ready to assume responsibility for about 43,000 Arkansans with varying degrees of mental illness.

"I think it’s very easy to get down into numbers and faces and forget that we’re talking about the very real harm to people, to Medicaid beneficiaries, who are some of our most vulnerable residents in the state that the plaintiffs in this case are providing services for because no one else will," said plaintiff’s attorney Ashley Hudson. "If they have to go without services for two weeks, three weeks, four weeks, you will hear testimony that it will shut these providers down and then we will have a real mental healthcare crisis."

An attorney for the Department of Human Services, which was the defendant in the lawsuit, said the legal action was premature and there is nothing to show that the transition won’t be a success. He also argued the judge didn’t have the authority to stop action approved in 2017 by the Arkansas General Assembly. The change is the second phase of an initiative designed to reduce the cost of treating Medicaid recipients with serious mental illness or developmental disabilities.

Ed Holman, chairman of the Arkansas Residential Assisted Living Association, was the first witness called to the stand. He testified that providers are unnerved by what seem to be a lot of uncertainties.

"Mental health is in a disaster right now because so many people are falling through the cracks. We’re trying to ask and get clarification about who would be covered."

Holman said members of the association also haven’t gotten assurances in writing on what they’ll be paid to provide services or how quickly they’ll be reimbursed. He testified that facilities have tiny profit margins and the financial strains could cause some to close.

"We’re concerned about payments. We don’t know what we’ll get paid after a certain amount of time. We hear 60 days or 90 days, but after that we don’t know, and one of the first things you do as a healthcare provider is you have to know the rate you’re going to be paid," Holman said.

Linda Short runs S&B Professional Management which operates five residential care facilities in western Arkansas. She testified that there’s great confusion because they can’t access online portals for billing and haven’t received membership cards for many clients that they treat. She was extremely critical of DHS.

"They’ve discriminated against the chronically mentally ill, and even though they may say they’ve tried hard, and maybe they have, I don’t know, but they haven’t tried hard enough because if 34 hours before the day you’re ready to go those cards are not in your possession, the pharmacy hasn’t been notified, the mental health provider hasn’t been notified, the resident is not secure that they might not get services and that they’re going to hallucinate, something is bad-wrong with the system. It’s not ready," she said.

DHS Attorney Rich Rosen countered to the judge that concerns by the plaintiffs aren’t justified.

"We’re here to show you that we are ready, that the PASSEs are ready, we have affidavits which your honor has read from the leaders of each of these three statewide PASSEs that said they passed readiness review, network adequacy, the portals are up, or will be March 1, membership cards are out," Rosen said.

Paula Stone, deputy director of innovation at DHS, said while there may be some problems, she insisted they are ready.

"No system rolls out perfectly. There are always bumps, and as many people have state today, until you begin the system, sometimes you don’t know what those bumps are going to be."

She testified that final steps have been taken over the last week ahead of Friday’s transition.

"So we’ve built in all those protections for beneficiaries. I know that there are going to be providers out there, this is 43,000 people, there will be providers out there that may not understand how to bill, but I believe, we’ve set up a command center, we’ve set up systems, we have people ready to help individuals," Stone said.

At about 8:30 p.m., Judge Chris Piazza denied the plaintiff’s request for a temporary restraining order.

"I don’t see irreparable harm here because nothing’s happened. We’ve got a system and it may or may not work, but they think it’s going to and it’s what the legislature ordered," Piazza said. "And I agree we’ve got a problem with a court trying to overturn a legislative action."

While he denied the request to delay the transition to managed care, Piazza suggested that plaintiffs keep the case open, "and if, in six months we run into a disaster, come back, do an amended complaint and we’ll take up the issue."