Fed up with slow-to-arrive Medicaid payments and a “dysfunctional” managed care system, one Arkansas provider has struck back.

Its attorneys filed suit in late April against the state, aiming to halt payment to Arkansas’ managed care insurers. 

Little Rock, AR-based Home to Community Living is seeking class-action status for the complaint, with 40,000 Medicaid recipients who have significant mental illnesses or developmental disabilities affected by the delayed payments since March 1.

“A catastrophic failure of major proportions began on day one and has interrupted care to tens of thousands of recipients and hundreds of providers on a state-wide scale,” Attorney Luther Sutter said in the lawsuit.

Sutter also is asking a judge to declare the managed-care system too “unprepared and dysfunctional to adequately provide services to Medicaid beneficiaries in this state.”

The lawsuit noted that Home to Community Living had provided more than $100,000 in services to its clients since March 1. But the provider said it was paid only $31,000 by managed care. 

No checks were received during all of March and HCL was forced to miss payroll because of the “tremendous financial hardship” placed on the provider. Sutter claims that the managed care companies’ goal is to reduce the number of providers in Arkansas by restricting payment “until some cannot survive.”

In late April, the Arkansas Department of Human Services also announced that it was delaying for six months the initial open enrollment period for the state’s new Medicaid managed care program.

Health officials said that the extra time was to managed care companies more time to stabilize and grow their network of providers.

Officials with the three managed care companies said in May that they were working to alleviate issues that had prevented providers from successfully submitting claims.