(a) A risk-based provider organization shall:

(1) Be authorized to conduct business in the state;

(2) Hold a valid certificate of authority issued by the Secretary of State;

(3) Have an ownership interest of not less than fifty-one percent (51%) by participating providers; and

(4) Include within membership of the risk-based provider organization:

(A) An Arkansas licensed or certified direct service provider of developmental disabilities services;

(B) An Arkansas licensed or certified direct service provider of behavioral health services;

(C) An Arkansas licensed hospital or hospital services organization;

(D) An Arkansas licensed physician practice; and

(E) A pharmacist who is licensed by the Arkansas State Board of Pharmacy.

(b) A risk-based provider organization that meets the requirements of subsection (a) of this section may include any of the following entities for access to and coordination with direct service providers and to facilitate access to flexible services and other community and support services:

(1) A carrier;

(2) An administrative entity;

(3) A federally qualified health center;

(4) A rural health clinic;

(5) An associated participant; or

(6) Any other type of direct service provider that delivers or is qualified to deliver healthcare services to enrollable Medicaid beneficiary populations.

(c) A risk-based provider organization may provide healthcare services directly to enrollable Medicaid beneficiary populations or through:

(1) A direct service provider that is a participating provider in the risk-based provider organization;

(2) A direct service provider subcontracted by the risk-based provider organization; or

(3) An independent provider that enters into a provider agreement or business relationship with a direct service provider.

(d) (1) Except as provided in subdivision (d)(2) of this section, reimbursement rates paid by a risk-based provider organization to direct service providers shall:

(A) Be determined by mutual agreement of the risk-based provider organization and direct service provider without regard to Medicaid provider rates established by the Department of Human Services; and

(B) Assure efficiency, economy, quality, and equal access to enrollable Medicaid beneficiary populations in the same manner as to individuals who are not covered by the Arkansas Medicaid Program.

(2) The reimbursement rates established by a risk-based provider organization shall not be subject to any administrative review by the Insurance Commissioner.

(3) A risk-based provider organization may contract with the Community Pharmacy Enhanced Services Network to provide enhanced pharmacist services to manage complex patients at a mutually agreed upon rate schedule.

(e) (1) Except as provided in subdivision (e)(2) of this section, all policies and procedures regarding the provision of healthcare services by a direct service provider shall:

(A) Be determined by mutual agreement of the risk-based provider organization and the direct service provider without regard to Medicaid provider rates established by the Department of Human Services; and

(B) Assure efficiency, economy, quality, and equal access to the enrollable Medicaid beneficiary population in the same manner as individuals who are not covered by the Arkansas Medicaid Program.

(2) A direct service provider that is delivering services to the enrollable Medicaid beneficiary populations shall:

(A) Meet any licensing or certification requirements set by law or rule; and

(B) Not otherwise be disqualified from participating in the Arkansas Medicaid Program or Medicare.

(f) Upon licensure by the commissioner, a risk-based provider organization shall perform the following functions:

(1) Enroll members of enrollable Medicaid beneficiary populations into the risk-based provider organization and remove members of enrollable Medicaid beneficiary populations from the risk-based provider organization;

(2) Ensure the following:

(A) Protection of beneficiary rights and due process in accordance with federally mandated regulations governing Medicaid managed care organizations;

(B) Proper credentialing of direct service providers in accordance with state and federal requirements;

(C) Care coordination of members enrolled into the risk-based provider organization; and

(D) A consumer advisory council consisting of consumers of developmental disability services and behavioral health services, including substance abuse treatment and services;

(3) Process claims or otherwise ensure payment to direct service providers within time frames established under federal regulations for goods and services delivered to the enrollable Medicaid beneficiary populations;

(4) Maintain the following:

(A) A network of direct service providers sufficient to ensure that all services to recipients are adequately accessible within time and distance requirements defined by the state; and

(B) A reserve of six million dollars ($6,000,000) and an additional amount as determined by the commissioner at the initial licensure based upon the risk assumed and the projected liabilities under standards promulgated by rules of the State Insurance Department;

(5) Comply with all data collection and reporting requirements established by the commissioner;

(6) Provide the following:

(A) Financial reports and information to the commissioner as required by the commissioner in rules applicable to risk-based provider organizations; and

(B) Practice and clinical support to direct service providers; and

(7) Manage the following:

(A)

(i) Global capitated payments and the attendant financial risks for delivery of services to the enrollable Medicaid beneficiary populations.

(ii) The Department of Human Services shall develop actuarially sound capitated rates for a defined scope of services under a risk methodology that may include risk adjustments, reinsurance, and stop-loss funding methods; and

(B)

(i) Incentive payments received from the Department of Human Services when quality and outcome measures are achieved.

(ii) The Department of Human Services shall develop rules, in consultation with direct service providers for individuals with behavioral health needs and individuals with intellectual and development disabilities, establishing criteria for quality incentive payments to encourage and reward delivery of high-quality care and services by a risk-based provider organization.