Notice of Rule Making

September 6, 2018
News | Notice of Rule Making

The Interim Director of the Division of Medical Services (DMS), Arkansas Department of Human Services (DHS), hereby issues the following proposed medical assistance rule(s) under one or more of the following chapters or sections of the Arkansas Code: 20-77-1701 et seq.

DMS, a division of the Department of Human Services (DHS), is hereby giving this notice of changes to the Provider-Led Arkansas Shared Savings Entity (PASSE) model of service delivery, implemented pursuant to Ark. Code Ann. § 20-77-1701 et seq. (Act 775 of 2017). Under this new Manual the PASSE model will shift from Phase I, where PASSE entities provided care coordination to attributed beneficiaries in a fee for service system, to Phase II, where PASSE entities assume full-risk for providing services to beneficiaries. The PASSE entities are responsible for integrating the physical health services, behavioral health services, and specialized developmental disability services for approximately 30,000 individuals who have intensive levels of treatment or care needs due to their behavioral health diagnosis or developmental or intellectual disability. These vulnerable Arkansans will benefit from the provision and continuity of all medically necessary services in a well-organized system of coordinated care.

Populations affected by this notice are: clients receiving behavioral health services in a licensed Outpatient Behavioral Health clinic, clients receiving behavioral health services in an inpatient setting, clients enrolled on the 1915(c) Community and Employment Supports (CES) Waiver, clients on the waitlist for the CES Waiver, and clients receiving services in a private Intermediate Care Facility for Individuals with Intellectual and Developmental Disabilities; as well as providers of those services and PASSE provider entities. DHS will be holding several public hearings and will accept public comments on all issues raised in this notice, as described below.

In Phase I of the PASSE Model, known as the Arkansas Provider Led Care Coordination Program, PASSEs provided care coordination to each member attributed to the PASSE, but all services were still provided on a fee for service basis. This Phase began on October 1, 2017, with readiness review of the PASSE entities and drafting of the PASSE Provider Agreement. Care coordination began on February 4, 2018.

Effective January 1, 2019, the Department of Human Services Division of Medical Services (DMS) is proposing the following updates and/or changes to the PASSE program, as reflected in the PASSE Program Provider Manual:

  • PASSE entities continue to provide care coordination as that is defined by Act 775 of 2017. The four essential “case management” functions (independent assessment, plan development, referral for services, and service monitoring) must be performed in compliance with the CMS conflict-free case management rules. While this has been in place under Phase I, Phase II provides more detail on the conflict free case management rules. Additionally, under Phase II, the care coordinator is responsible for development of the Person Centered Service Plan (PCSP).
  • PASSE entities become responsible for the provision of all services under Phase II, including all CES Waiver services and Medicaid State Plan services, including all home and community based services (HCBS) provided through the 1915(i) state plan amendment. The only services excluded from payment by the PASSE are:
    1. Nonemergency medical transportation in a capitated program;
    2. Dental benefits in a capitated program;
    3. School-based services provided by school-employees;
    4. Skilled nursing facility services;
    5. Assisted living facility services;
    6. Human development center (HDC) services provided to clients fully admitted to an HDC; or
    7. Waiver services provided to adults with physical disabilities through the ARChoices in Homecare program or the Arkansas Independent Choices program, or any successor waiver for the frail, elderly, or physically disabled.
  • Individuals will no longer be “attributed” to a PASSE based on their claims history and/or provider relationships. Instead, individuals will be “auto-assigned” to a PASSE using a round-robin methodology. PASSE’s may be pulled out of auto-assignment if they are not in good standing or if they reach a certain percentage of market share (53%).
  • The PASSE entity will receive a Per Member/Per Month (PMPM) global payment to cover all needed services for each assigned member. The PMPM will be based on historical utilization.
  • The Network requirements were enhanced to reflect that PASSEs are now responsible for providing all services. These network requirements now include distance requirements, time-frame requirements, and provider to member ratio requirements. This now includes requirements for use of out-of-network providers.
  • Each PASSE is now required to develop an internal appeal process, in addition to the grievance process, and the beneficiary must exhaust that appeal process before appealing to the state Medicaid agency.
  • The PASSE entities will now be required to submit monthly encounter data so that service utilization can be tracked. This will be in addition to the quarterly reports that were submitted in Phase I, which will continue in Phase II. These will be used to monitor and improve quality of the PASSE program under the enhanced quality provisions of the PASSE model.
  • The PASSE will now be responsible for credentialing all network providers, including Home and Community Based Services Providers, that provide services to their enrolled members.

The proposed rule is available for review and inspection as follows: (1) at the DHS Division of Medical Services, Office of Policy Coordination and Promulgation, 2nd Floor, Donaghey Plaza South Building, 700 Main Street, P.O. Box 1437, Slot S295, Little Rock, Arkansas 72203-1437; (2) on the Arkansas Medicaid website (, which may be downloaded from the “Proposed Rules for Public Comment” section of the website’s general menu; and (3) in a different format (such as large print) by contacting DHS at (501) 320-6429.

All comments must be submitted in writing to DHS, at the above address, or by email to Becky Murphy (, no later than close of business on September 12, 2018.

Three Public hearings will be held starting at 5:00 PM on:

  1. Monday, August 20th at the Central Arkansas Library System, Darragh Center Auditorium, 100 Rock Street, Little Rock, AR.
  2. Thursday, September 6th at Hempstead Hall, Blevins Suite, University of Arkansas at Hope, 2500 South Main Street, Hope, Arkansas

A third public hearing will also be held. As soon as the information is available on the time, date, and location it will be posted on the DHS website, and can be found by going to or to the Arkansas Medicaid website at

The Arkansas Department of Human Services is in compliance with Titles VI and VII of the Civil Rights Act and is operated, managed and delivers services without regard to religion, disability, political affiliation, veteran status, age, race, color or national origin.4501809667 EL

Tami Harlan
Interim Director
Division of Medical Services