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State Capitol Week in Review from Senator Larry Teague

 

August 5, 2016

LITTLE ROCK – In a transaction that was termed “unique” by the governor, the state Health Department sold its in-home care operations to a private corporation based in Kentucky for $39 million.

The Health Department set up the in-home care program in 1968, when fewer health care options existed in rural Arkansas. Now, about 13,000 patients receive some form of care in their homes. That number is down about 28 percent over the past five years.

The Kentucky company is based in Louisville and is called Kindred Healthcare, Inc. Under the terms of the sale, it acquired the Health Department’s licenses to provide home health, personal care and hospice services. It agreed to retain all current employees for a year and to continue providing services to current patients.

The Health Department operated its in-home care program in 69 counties and Kindred will operate in 70. The Department’s Maternal and Infant Home Visiting program will not be sold to Kindred.

A key factor in the state’s decision to sell the in-home care program was that it competed against private sector companies. That was not the case when it was first established.

Another factor was that it was becoming a drain on tax revenue. Over the past five years revenue had dropped from $71.5 million to $58.5 million. Its costs have gone up while its revenue declined and therefore it could not be sustained over the long term, according to Department officials.

Arkansas was one of a very few states that operated an in-home health program. Kindred was one of six companies that put in a bid to buy the program, and one reason it was chosen was that it agreed to maintain services for patients in rural areas for at least a year.

About 300 Department employees in the program will be able keep their jobs for a year. It also hired about 1,500 contract employees last year. In 2011 it hired about 3,000 contract employees.

Kindred and its subsidiaries operate in 2,700 locations in 46 states. They have about 102,000 employees and annual revenues of about $7.2 billion.

Patient Care Initiative

Arkansas is one of 14 regions in which primary care physicians may qualify for incentives from the federal government if they adopt new models for treatment and billing.

The federal Centers for Medicare and Medicaid Services announced that physicians in Arkansas can apply until September 15 for the incentives, which are designed to encourage new and different billing and treatment practices, rather than strict fee for services methods.

The incentives encourage preventative care and 24 hour availability to care, especially for patients with chronic illnesses. It also provides incentives for the primary care physician to more actively coordinate a patient’s care with specialists, hospitals and rehabilitation clinics.

Primary care physicians who participate will receive a monthly fee for keeping patients healthy. They will be encouraged to improve communications with patients and their families, so that patients take more responsibility for health and life style decisions.

The new incentives are meant to build on a 2012 primary care plan by the federal CMS to change the traditional fee for service method of billing for treatment.

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