Workers told state units to close

One of Arkansas’ largest behavioral health care providers told employees Tuesday the state’s plan to terminate its contracts would make remaining in operation unsustainable.

Missouri-based Preferred Family Healthcare, which has about 700 employees statewide and 47 branches in Arkansas, sent a letter to its workers Tuesday announcing it would “not have a sustained ability to continue operations in Arkansas” after the state Department of Human Services’ decision last week to transfer all clients to alternate providers, according to the letter published by the Arkansas Times.

Last week, the Human Services Department suspended Medicaid payments to the Springfield, Mo.-based nonprofit group after the arrest of a former executive who was charged with improperly billing about $2.3 million in mental health services. A Preferred Family Healthcare spokesman said the firm would appeal the suspension.

The department also said the state would terminate its non-Medicaid contracts for mental-health and substance-abuse services within 60 days. The department has identified other providers in most areas to take on Preferred Family’s clients, a spokesman said last week.

Preferred Family’s letter

to employees and a separate news release sent to the Arkansas Democrat-Gazette refer to those contracts.

Referring to the state’s yet-to-be-determined timeline for transferring clients to other providers, Preferred Family’s news release says “it became apparent that Preferred Family Healthcare would be unable to adequately support our clients without the government contracts.”

In the letter to employees, “executive leadership” says, “We are continuing our appeal with the State; however without the contracts, even our anticipated success in the appeal would not allow us to continue to effectively function in the state.”

Preferred Family Healthcare received about $179 million from the state Medicaid program from 2011-16, including $33.4 million in 2016, according to federal court records.

Preferred Family’s letter and news releases come after the Friday arrest of Robin Raveendran, former executive vice president of Preferred Family Healthcare. His arrest was the most recent in a series of convictions or guilty pleas involving others with ties to the firm.

Raveendran reported to Milton R. “Rusty” Cranford of Bentonville, a former director of Preferred Family Healthcare’s state operations who pleaded guilty in June to bribing state lawmakers in a separate investigation.

Raveendran’s arrest came after Preferred Family announced earlier this year it dismissed all executives involved in Cranford’s schemes. Gov. Asa Hutchinson said last week Raveendran’s arrest indicates some people involved in the scheme may still be employed.

In Tuesday’s news release, Preferred Family Healthcare said it was “determined not to let the egregious behavior of a few overshadow” its work in Arkansas over the past 11 years.

All clients, the statement said, would be transferred to another provider, though a timeline for the transition hadn’t yet been established.

Separately Tuesday, the Human Services Department sent a letter to Preferred Family’s Medicaid beneficiaries advising them Medicaid wouldn’t pay for any services a client receives from Preferred Family Healthcare clinics as of June 29.

The letter tells clients to contact another provider directly or ask for assistance by calling the Arkansas Foundation for Medical Care Medicaid Beneficiary Service (1-888-987-1200) or Connect Care (1-800-275-1131).

Preferred Family Healthcare offers mental health and behavioral care and treatment for substance-abuse disorders in five states: Kansas, Illinois, Missouri, Oklahoma and Arkansas.