Kentucky’s largest provider of drug and alcohol treatment continues to cut staff and expenses, citing “significant reimbursement reductions” by some private insurance companies that handle state Medicaid payments.

Addiction recovery careor ARC, last week cut its workforce by 105 employees, Matt Brown, ARC’s director of administration, said in an email Sunday. Another 300 staff members “received adjustments to their compensation, job duties or both,” Brown said.

Two previous rounds of hires stepped in September and October brings the number of laid-off workers to 323 — nearly a quarter of its former statewide workforce of 1,350, Brown said.

Addiction care provider sues managed care company for reduced Medicaid payments

The cuts come as ARC, founded by CEO Tim Robinson, remains in the spotlight an FBI probe in possible health care fraud. The ARC said it stands by its services and is co-operating with the investigation.

Meanwhile, the Louisa-based for-profit company also closed some programs and facilities and reorganized others to deal with what it described as discounts of up to 30 percent from some of the insurers known as managed care or MCOs that have contracted with Kentucky. to manage its $16 billion-a-year Medicaid program.

“This reduction in force and realignment of staff is a direct result of several layers of significant reimbursement cuts to addiction and mental health service providers like ARC,” Brown said. “The reduction in force is not a decision that was taken lightly, but one that was taken out of necessity.”

Under their contracts with the state, MCOs are paid a flat rate for each member enrolled in their health plans. In turn, they have a great deal of freedom to set the rates they agree to pay health care providers.

Brown did not identify the MCOs that made the cuts, but other providers identified one of them as Wellcare, the largest of the six MCOs. Wellcare oversees the care of approximately 418,000 Kentuckians.

Wellcare did not respond to requests for comment.

A spokesman for the Kentucky Association of Health Plans, an industry group, said in a statement last month that insurers are committed to working with “quality and trusted providers of behavioral health and substance use disorder treatment services of substances”. … Health plans use many tools to monitor outcomes so they reward high-performing providers who deliver strong results.”

Medicaid is a major source of funds for addiction treatment in Kentucky, spending about $1.2 billion last year. ARC received approximately $130 million in Medicaid funds.

Robinson, a lawyer and recovering alcoholic, founded the company that became ARC in 2008 with a single halfway house for women affected by alcoholism. It has become the state’s largest single provider, with Robinson and his companies becoming prolific, well-connected political donors — contributing about $570,000 over the past decade.

The Lantern reported that donations were split between Republican political causes and those of Kentucky Gov. Andy Beshear, a Democrat who praised Robinson’s company for its work in addiction treatment.

Although ARC has been forced to cut costs, it remains committed to its mission of providing alcohol and drug addiction treatment, Brown said.

“We remain very committed to our nearly 1,900 patients and our remaining employees,” he said.