SUPPORTS SUSPENSION: Governor Hutchinson said DHS was correct to halt Medicaid reimbursements made to PFH. BRIAN CHILSON


Preferred Family Healthcare
will contest a decision by Arkansas’s Office of Medicaid Inspector General to cut off Medicaid payments to the beleaguered provider, a spokesman said Friday evening. The Missouri-based behavioral health nonprofit is at the center of a vast corruption scandal that has ensnared multiple Arkansas legislators in an ongoing FBI investigation.

OMIG and the state Department of Human Services, which oversees the Medicaid program, announced Friday afternoon that payments to PFH were being suspended. The announcement came after Friday morning’s news that a former PFH executive, Robin Raveendran, had been arrested in Independence County on charges of Medicaid fraud. (The Batesville Guard broke the news.) Raveendran previously worked for DHS before joining Preferred Family Healthcare.

A spokesperson for PFH said wrongdoing at the nonprofit was limited to certain former employees and PFH as a whole shouldn’t be punished. (The statement does not mention, however, the fact that those employees include several of the individuals who ran the provider for years.) The statement noted that its dozens of locations throughout the state provide critical services, often in rural areas, and it stated that PFH has fully cooperated with the investigation.

Previously, DHS and Governor Hutchinson’s office have echoed those arguments, but no longer. Asked Friday afternoon about the decision by OMIG and DHS to suspend Medicaid payments, the governor had this to say:

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I support the action of The Department of Human Services in suspending has Preferred Family Health in terms of Medicaid reimbursements. I indicated early today that the suspension is necessary.

The nonprofit receives tens of millions annually in Medicaid reimbursements from Arkansas. DHS said it would also move to terminate millions of dollars worth of contracts with PFH.

The full statement from Preferred Family Healthcare:

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We are appealing the decision by the Arkansas Medicaid Inspector General to suspend payment for our services. The allegations against our former employees are egregious and not a reflection of PFH values. For some time, we have worked in a cooperative manner to assist in identifying and addressing areas of concern and will continue to do so, while we work through the appeal process.

In the charging documents themselves, the following is stated: “The current management of PFH has fully cooperated throughout this investigation. Specifically, the MFCU [Medicaid Fraud Control Unit] was granted access to its company emails, internal meeting notes and data analyses.”

Recognizing that Preferred Family Healthcare has many clients who are in critical need of non-interrupted service, including a significant number who receive 24/7 care, we will continue to support them while working with the various government entities to try and identify and resolve their concerns.

Though Raveendran’s arrest triggered the decision to suspend Medicaid payments to the provider, the charges against Raveendran are just one of many criminal allegations regarding PFH. Rusty Cranford, an Arkansas lobbyist and former executive at PFH, has pleaded guilty to federal bribery charges; the information in that case tells of extensive kickbacks at the Arkansas legislature, including successful efforts to sculpt legislation that would benefit PFH. Multiple former state legislators have admitted to accepting bribes. Several of the nonprofit’s top executives have been implicated in Cranford’s plea and other federal court filings.