After another round of layoffs, Addiction Recovery Care has cut nearly a quarter of its workforce. • Kentucky Lantern

Kentucky’s largest drug and alcohol treatment provider continues to cut staff and costs, citing “significant cuts” by some private insurance companies that administer the state’s Medicaid payments.

Addiction recovery careARC, or ARC, reduced its workforce by 105 employees last week, Matt Brown, ARC chief administrative officer, said in an email on Sunday. Another 300 staff members “received adjustments to pay, duties or both,” Brown said.

There have been two previous rounds of staff cuts September And October bring the number of furloughed employees to 323 — nearly a quarter of the former workforce of 1,350 statewide, Brown said.

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The cuts come as ARC, founded by CEO Tim Robinson, continues to focus an FBI investigation to possible healthcare fraud. ARC has said it stands behind its services and is cooperating with the investigation.

Meanwhile, the Louisa-based for-profit company has also closed some programs and facilities and reorganized others to cope with what it described as cuts of up to 30% at some of the insurers known as managed care organizations, or MCOs that contract with Kentucky. to administer its $16 billion-a-year Medicaid program.

“These workforce reductions and reallocations are a direct result of multiple layers of significant cuts to addiction treatment and mental health providers like ARC,” Brown said. “The reduction in force is not a decision taken lightly, but a decision made out of necessity.”

Under their contracts with the state, the MCOs receive a flat rate for each member enrolled in their health plan. In turn, they have wide latitude in determining the rates they must pay to healthcare providers.

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

Wellcare did not respond to requests for comment.

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

Medicaid is a major source of funding 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, started the company that became ARC in 2008, with a single halfway house for women affected by alcoholism. It has become the state’s largest provider, with Robinson and his companies emerging as well-connected, prolific political donors — contributing about $570,000 over the past decade.

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

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

“We are still very committed to our nearly 1,900 patients and our other employees,” he said.