FAYETTEVILLE -- Other providers will fill the void Preferred Family Healthcare leaves behind, often using the same staff, the president of the Arkansas Youth Services Providers Association said.
The job won't be easy, though, he and other providers said.
Preferred Family is the largest Medicaid-funded provider of counseling to troubled youth and adults in Arkansas, with 47 locations statewide. The Springfield, Mo.-based nonprofit corporation had its payments from the state-administered Medicaid program cut off June 29 after a series of scandals.
A federal investigation involving Preferred Family has led to the conviction of four former state lawmakers. A state investigation, assisted by the U.S. Justice Department, also lead to charges of fraud against a former state assistant Medicaid director. And one of the company's former lobbyists, who was also a director of its Arkansas operations, pleaded guilty last month to a multimillion bribery scheme in Arkansas.
"The bottom line is that other providers could tell they were at a competitive disadvantage for years," said Darryl Rhoda, who is both executive director of Youth Bridge, a behavioral health nonprofit group based in Fayetteville, and president of the providers association.
"It's obvious what those disadvantages were now," he said.
State contracts with Preferred Family show the nonprofit group was paid for a range of services including therapy and counseling for foster children, court-ordered drug and alcohol addiction treatment and professional consulting to the state Department of Human Services.
Preferred Family provided services to 3,118 clients in Benton and Washington counties in 2017, according to a statement from the company. That figure does not include prevention services such as drug abuse prevention programs.
One of those clients identified herself in a telephone interview as Shanna Chopper of Siloam Springs. She received therapy from Preferred Family and was prescribed medications, she said Thursday. She found out about the state suspension of Medicaid when getting her prescriptions refilled, she said.
"My pharmacist told me my therapist was no longer on the list of eligible Medicaid providers," Chopper said. "There is a shortage of mental health providers here already. For a lot of places, Preferred Family was their best option. In other places, it was the last option left."
Her primary care physician is able, authorized and willing to renew her prescriptions, Chopper said. Still, she would have appreciated some warning from the state.
Preferred Family operates Decision Point, an addiction treatment program with its headquarters in Bentonville. As of April of this year, the company had 158 employees in Benton and Washington counties.
Local judges said last week they didn't know what the status will be of Decision Point and other Preferred Family programs that receive referrals from the courts for drug treatment.
"I was hoping you could tell me," Judge Christi Beaumont of the 4th Judicial District's Drug Court said in an interview Wednesday. The 4th District covers Washington and Madison counties.
Preferred Family also has contracts to provide emergency shelters for foster children who have been removed from their parents' households because they are in danger. The company provides a range of treatment for children with needs ranging from speech pathology to developmental disorders to counseling for trauma, according to state contracts and company statements.
"We are getting questions and phone calls daily," said LaDonna Humphrey, spokeswoman for Absolute Pediatric Therapy, a Bentonville-based group. Those calls are coming from therapy providers at Preferred Family, from the doctors of children who require such services and from parents themselves, she said Wednesday.
Providers like Absolute hope to bring qualified therapists from Preferred Family over with their clients and minimize the disruption for the children involved, Humphrey said. Northwest Arkansas is better prepared to handle the shift than other areas in the state, some of which do not have more than one provider of such services, she said.
The transition could still be difficult, Humphrey said.
"The biggest shortage is not a lack of providers," Humphrey said. "The biggest shortage is of providers that still accept Medicaid. We do, but there are not many providers left who do."
"We found out this was happening when it hit the news," she said of Preferred Family losing Medicaid. The situation is serious, she said, but it is a challenge that can be met. "This is a chance for the community to come together, and I believe it will."
Statewide, more than 25,000 clients received mental and behavioral health services from Preferred Family in 2017, according to the company. An additional 3,300 clients received substance use treatment through the various programs offered. The company currently has 187 residential treatment beds in Arkansas.
Preferred Family and a number of its affiliates in Arkansas saw receipts from Medicaid and other state-administered health care programs in the state rise from about $24 million to about $43 million from 2013 to 2018, state finance records show.
The company also received payments from non-Medicaid sources such as appropriations from the state's general revenue and federal block grants administered by the state, contracts with the nonprofit group show. Those payments increased almost 2,000 percent in about the same five-year period.
Preferred Family also is paid through fees levied by state courts, according to copies of 16 contracts Preferred Family had with the state before the suspension announcement. Those contracts with Preferred Family affiliates were worth $28 million but will be terminated within 60 days, the state has said. The company cannot maintain those and other operations without its Medicaid clients, it says.
The first lawmaker pleaded guilty to federal authorities in January 2017. Afterward, Preferred Family assured the state it had cleaned house and was allowed to keep its contracts.
The state did not announce it was suspending Medicaid payments and pulling contracts until the arrest of the former assistant state Medicaid director, Robin Raveendran. He went to work for Preferred Family and used his expertise to file false claims, according to the charge against him. The former executive was arrested in the improper billing of almost $2.3 million in claims for mental health services, according to prosecutors.
Preferred Family said in a statement after the suspensions the transfer of state contracts to other providers is being negotiated.
"Recognizing the realities of these decisions, it became apparent that Preferred Family Healthcare would be unable to adequately support our clients without the government contracts," the statement said. "Preferred Family Healthcare's first priority remains the clients served and the more than 700 employees who support them across the state of Arkansas."
Youth Bridge sent a letter July 5 to employees telling them counselors or other staff from Preferred Family providers such as Dayspring Behavioral Health Services or Decision Point are welcome to apply at Youth Bridge. Those displaced Preferred Family employees and the clients they serve can be integrated into Youth Bridge and other providers from around the state, Rhoda said.
"We are going to audit them closely, though," he said of the employees. "We're going to make sure that their billing in the past was done properly. We're also going to make sure that if they were told one form of billing was all right in the past, that it is not all right now if it does not meet our standards."
Medicaid regulations are not simple and are subject to interpretation, Rhoda said. Youth Bridge and most other providers make few assumptions, he said.
"We have a simple rule: You are fired for fraud on your first offense," he said.
New employees and their clients will fit into an existing management and accounting infrastructure at Youth Bridge and other providers, Rhoda said. Those providers may have to lease additional space, he said. He does not expect to hire displaced managers, he said.
Experience at Youth Bridge shows that about 20 percent of school-age children will benefit from some sort of counseling at some point, but that can be as limited as temporary counseling during a family situation, he said. About 30 percent of those students who receive some counseling, or 6.2 percent of the overall school-age population, will need a high level of care. Youth Bridge sees about 2,500 clients a year now, he said, in its eight-county service area.
NW News on 07/15/2018