Ex-worker accused in scheme to defraud state Medicaid program, Arkansas authorities say

Posted: October 10, 2018 at 4:30 a.m.

A third former worker for the Missouri-based nonprofit at the center of a federal public corruption probe has been arrested in connection to what Arkansas authorities describe as a concerted scheme that defrauded the state's Medicaid program of more than $2 million.

Vicki A. Chisam, 65, of Batesville surrendered Sept. 27 after she was charged with one felony count of Medicaid fraud, according to the attorney general's office.

Chisam worked for Preferred Family Healthcare of Kirksville, Mo., though she was based at the nonprofit's Health Resources of Arkansas office in Batesville.

A longtime billing clerk, Chisam is accused of following her supervisors' orders despite knowing they were illegal, according to a sworn affidavit stating the basis for the charge, which carries a potential prison sentence of five to 20 years.

The court filing in Independence County also says Chisam discovered how to manipulate an electronic records system to defraud Medicaid, which "opened the door" for the scheme and "taught" other billers how to do the same.

Chisam is specifically accused of Medicaid fraud in the amount of $589,000 over an 11-month period in 2015.

Arkansas Attorney General Leslie Rutledge's office in July announced the arrest of Robin Raveendran, former director of program integrity and executive vice president at Preferred Family, on two felony counts of Medicaid fraud.

Raveendran was accused of directing Health Resources of Arkansas staffers to improperly bill Medicaid, which is considered the payer of last resort, without first billing Medicare for costs that program covered or without first obtaining a Medicare denial letter for patients who were eligible for both.

Medicaid is a health insurance program for children and low-income citizens. The federal government covers about 70 percent of the costs in Arkansas, and state taxpayers pay for the remainder.

Arkansas Medicaid reimbursement rates for behavioral health are higher than for Medicare, which is a health insurance program for the elderly funded solely with federal money.

The improper billing methods described in Chisam's arrest affidavit required the manipulation of the electronic records system to show that the Medicaid reimbursement claim was a "cross-over claim," meaning Medicare payments had already either been applied or rejected.

Chisam, described in the affidavit as "an experienced billing clerk," spent hours manipulating the records system before learning how to submit the falsified claims, the filing says.

Helen Balding, the former director of billing, was charged with two felony counts of Medicaid fraud as reportedly Raveendran's "accomplice." She is accused of instructing her staff to illegally bill Medicaid at Raveendran's direction.

In total, Health Resources of Arkansas filed forged claims worth $2.3 million between January 2015 and October 2017, according to court documents.

Balding, 47, has not yet entered a plea, said her attorney, Michelle Harkey of Searcy.

A message left Tuesday at the firm representing Raveendran was not returned. He has not entered a plea, according to the Independence County circuit clerk's office.

Pretrial hearings are scheduled in November for Raveendran and in December for Balding, according to the clerk's office.

After Raveendran's arrest in June, Arkansas suspended Medicaid reimbursement to Preferred Family Healthcare, which has since announced plans to sell its network of Medicaid-eligible mental health and substance abuse clinics in the state to Quapaw House Inc., a nonprofit headquartered in Hot Springs.

Those more-than-two-dozen clinics include properties under the Health Resources of Arkansas umbrella, the state-designated community mental health center for north-central Arkansas. It also includes outpatient mental health clinics under the Dayspring name and Bentonville-based Decision Point, which provides substance abuse treatment.

Another Missouri-based nonprofit, Alternative Opportunities acquired Dayspring in 2007, Decision Point in 2011 and Health Resources of Arkansas in 2014 before merging with Preferred Family in 2015. The Preferred Family name survived the merger, but former Alternative Opportunities executives took key leadership roles at the newly combined nonprofit.

Chisam began working for Health Resources of Arkansas in September 2008 and left Preferred Family in November 2015, company spokesman Reginald McElhannon said.

"The alleged actions of these former leaders and certain employees do not reflect the integrity and values that Preferred Family Healthcare has represented for decades, and which our current employees exhibit daily," McElhannon said.

A federal public corruption investigation has resulted in guilty pleas from Preferred Family's former chief clinical officer, its former director of Arkansas operations, its former internal auditor, its paid Pennsylvania-based political consultant and former Arkansas Rep. Eddie Cooper, who worked for the firm.

Other former executives have been implicated in a series of embezzlement schemes but have not been charged with crimes.

In total, six ex-Arkansas lawmakers have faced federal charges since last year; five have either pleaded guilty or have been convicted by a jury of federal crimes.

Preferred Family continues to provide services for people with developmental disabilities, mental illness and substance abuse problems in Missouri, Oklahoma, Illinois and Kansas.

In the year that ended June 30, 2017, its revenue reached $197.8 million, about $12.4 million more than its expenses, according to its latest tax filing. The nonprofit's cash balance was reported to be $17 million.

Metro on 10/10/2018