By JOHN LYON

Arkansas News Bureau

LITTLE ROCK — The departure of the state’s Medicaid chief will not slow efforts to change the way the government health program pays for services, Gov. Mike Beebe said Tuesday.

Gene Gessow gave verbal notice Monday that he plans to resign in early November. 

"We’re all very sad about it," Beebe said. "We didn’t want him to go."

A former Medicaid chief for Iowa, Gessow was hired to run Arkansas’ Medicaid program in December 2009 at an annual salary of $104,080. The Rhode Island native has accepted a job in Massachusetts’ state government. 

Beebe said he respects Gessow’s decision, which he said is related to "older family members’ health conditions."

Gessow is leaving as work groups begin to hammer out details of a plan to change the way the state Medicaid program and private insurers pay for health care services in Arkansas. Gessow has played a key role in the initiative, which seeks to develop a new payment system in which health care providers are paid for entire episodes of care rather than for each service provided.

The initiative seeks to lessen the impact of a projected Medicaid shortfall, as well as making health care more affordable and efficient for all Arkansans.

Beebe called Gessow "a visionary" and said the state will miss his expertise and guidance, but he said Gessow’s departure will not set back the timetable for the payment initiative. The state expects to begin implementing changes in certain key areas of health care in July.

"Our timetable is dictated by budget projections, so I think we have to press on," the governor said.

John Selig, director of the state Department of Human Services, said Gessow brought "big ideas" to Arkansas.

"Gene has helped us launch significant change that will transform the state’s health care system," Selig said. "While I hate to see him go, I know family comes first. We have teams in place that will ensure we continue to make progress on these initiatives."

Gessow’s official title is director of the DHS’ Division of Medical Services. Marilyn Strickland, the chief operating officer of the division, will serve as its interim director until Selig chooses a permanent replacement for Gessow, said DHS spokeswoman Amy Webb.

"Marilyn has been there for more than 30 years. She knows that division really well, and she’s also really familiar with the payment initiative and the work we’ve done there," Webb said.

DHS will be "looking for someone to replace Gene who has the same kind of innovative mindset that Gene has, because we know this is a really important project," she said.