Troubled Missouri-based behavioral health nonprofit Preferred Family Healthcare confirmed through a spokesman Wednesday morning that “it is in negotiations with an Arkansas organization to potentially acquire all of [PFH’s] non-contractual services in Arkansas.” That organization was left unnamed.

PFH grew rapidly in Arkansas over the past several years, acquiring several smaller nonprofits and becoming one of the largest behavioral health providers in the state. But as PFH’s reach expanded, its leadership team came under increasing FBI scrutiny for their alleged role in illicitly influencing state lawmakers in Little Rock for personal gain. Federal and state investigators have accused multiple former PFH executives of engaging in schemes to bribe Arkansas legislators, embezzle money from the nonprofit and defraud the Medicaid program of millions of dollars through improper billing practices.


On June 29, the state Office of Medicaid Inspector General suspended Medicaid payments to PFH and the Department of Human Services began terminating contracts with the provider. Last week, PFH lost an appeal contesting the suspension of its Medicaid reimbursements. In 2017, it received about $36.2 million in Medicaid funds in Arkansas.

PFH operates 45 service sites around the state, providing therapy, mental health services and substance abuse treatment for thousands of patients; it also does business under the names Health Resources of Arkansas, Dayspring and Decision Point. It employs some 700 people statewide and also operates in Missouri, Oklahoma, Kansas and Illinois.


The nonprofit continues to provide services for the time being, but it previously told its employees that it would have to stop operating in Arkansas if DHS terminated its contracts. However, PFH has not yet provided a timeline for closing sites.

On Tuesday, PFH spokesman Reggie McElhannon said he couldn’t provide a specific date for when the nonprofit was planning to wind down its operations in Arkansas.


“We’re trying our best to make sure our current employees … are well taken care of in their future, and so we’re wanting to be very mindful of that and work with all the various entities involved to assure whatever kind of transition we can,” McElhannon said. Asked whether PFH workers would be provided severance pay, McElhannon said discussions were ongoing and that he could not comment further.

PFH employees were sent a memo on Tuesday stating that the provider’s discussions with the “Arkansas organization” were “extremely promising.” The communication, which was forwarded to the Arkansas Times by an employee, states:

We would like to share with you that Preferred Family Healthcare has identified an Arkansas organization to potentially acquire all of our non-contractual services in Arkansas. Our discussions with this entity are extremely promising. Obviously, due diligence efforts are being conducted and we will notify you as soon as possible with specific details.

It has been our goal to preserve the teamwork and legacy found throughout the network of locations. To ensure that the future of the Arkansas operations remains strong during the inevitable transition period, please remain diligent to the continuation of quality service. This is especially true for those whose efforts are closely tied with public schools, especially as the start of school nears.

Again, we are hopeful that we will be able to confirm an agreement within a relatively short period of time. We certainly recognize the anxiety many of you are experiencing, and we really desire to be able to provide clarity of direction for you very soon.