Providence Service Corporation Comments on Senate Health Care Reform
December 28 2009 - 4:05PM
PR Newswire (US)
TUCSON, Ariz., Dec. 28 /PRNewswire-FirstCall/ -- The Providence
Service Corporation (NASDAQ:PRSC) today commented on the landmark
healthcare legislation that was passed last week by the United
States Senate. The Senate Bill, which still needs to be merged with
the House Bill and therefore could still undergo substantial
changes, has a number of features that are expected to add funding
for many of the types of home and community based social services
that Providence provides to Medicaid eligible populations. While
the Senate's version of the bill also implements some cuts and cost
saving measures, primarily to out of home care providers and
hospitals' "Disproportionate Share" programs, the cuts are not
expected to affect the Company's services. Included in the Patient
Protection and Affordability Act are: -- An increase in the
eligibility for Medicaid to 133% of the federal poverty level. This
is estimated to add approximately 15 million to the roles of
Medicaid. The House version of the bill is even more generous and
increases eligibility to 150%. This increase is designed to be
effective in 2014 but the bill also provides incentives for states
that are identified as early implementers. -- An increase in the
percentage of state's Medicaid costs paid by the federal
government, known as the state's FMAP. -- Expansion of the State
Children's Health Insurance (SCHIP) Program. The expansion of SCHIP
will include eligibility for foster care kids that previously were
aging out of the system. -- Streamlined Medicaid enrollment, online
enrollment, and new outreach services, for which $10 billion is
provided over five years. -- Expanded community and home based
services, with financial incentives for states to expand home based
services and penalties for states that do not. -- The Community
Living Assisted Support and Services Act (CLASS). CLASS, which is
in both the Senate and House bills, mandates that states develop
incentives for community and home based programs, requires outcome
data, and provides preferential treatment to community health
centers. This is well aligned with Providence's own mission
statement to provide services in the home and community. --
Insurance Company Services Requirement. The Senate bill also
includes a requirement that insurance companies spend 85% of
revenues in services. This along with the requirement that everyone
obtain insurance would make a whole new market available to the
Company that has not been insured previously. "After years of
operating under the Medicaid waiver and continuing to demonstrate
the value of home and community based services we are pleased that
Congress is recognizing that preventative and home based care may
be the best use of Medicaid dollars," said Fletcher McCusker,
Chairman and CEO. The bill will now go to a committee combined of
House and Senate members to reconcile the differences in the two
pieces of legislation. There could be substantial changes to the
current draft and the benefits outlined above are contingent on the
passage of a final bill. About Providence The Providence Service
Corporation, through its owned and managed entities, provides home
and community based social services and non-emergency
transportation services management to government sponsored clients
under programs such as welfare, juvenile justice, Medicaid and
corrections. Providence does not own or operate beds, treatment
facilities, hospitals or group homes, preferring to provide
services in the client's own home or other community setting. The
Company provides a range of services through its direct and managed
entities to over 74,000 clients through 843 active contracts at
September 30, 2009, with an estimated 7.3 million individuals
eligible to receive the Company's non-emergency transportation
services. Combined, the Company has a nearly $1 billion book of
business including managed entities. Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "believe," "demonstrate," "expect," "estimate,"
"anticipate," "should" and "likely" and similar expressions
identify forward-looking statements. In addition, statements that
are not historical should also be considered forward-looking
statements. Readers are cautioned not to place undue reliance on
those forward-looking statements, which speak only as of the date
the statement was made. Such forward-looking statements are based
on current expectations that involve a number of known and unknown
risks, uncertainties and other factors which may cause actual
events to be materially different from those expressed or implied
by such forward-looking statements. These factors include, but are
not limited to the global credit crisis, capital market conditions,
and other risks detailed in Providence's filings with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K for the fiscal year ended December 31, 2008. Providence
is under no obligation to (and expressly disclaims any such
obligation to) update any of the information in this press release
if any forward-looking statement later turns out to be inaccurate
whether as a result of new information, future events or otherwise.
DATASOURCE: The Providence Service Corporation CONTACT: Fletcher
McCusker, Chairman and CEO, or Kate Blute, Director of Investor and
Public Relations, both of The Providence Service Corporation,
+1-520-747-6600; or Alison Ziegler of Cameron Associates,
+1-212-554-5469, for The Providence Service Corporation Web Site:
http://www.provcorp.com/
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