POTENTIAL DEAL: Rehab agency reportedly interested in Preferred Family Healthcare's Arkansas assdets.

Preferred Family Healthcare,
the behavioral health provider that is shutting down in Arkansas following the loss of Medicaid contracts as a result of the public corruption scandal,  has a  buyer for assets in Arkansas. It is Quapaw House, whose operations include inpatient and outpatient addiction treatment at Hot Springs and Russellville and a prisoner re-entry program as well as mental health programs in several cities.

PFH had announced earlier this week that another deal had fallen through and prepared to shut down Oct. 12.


But I learned today about a potential deal with Quapaw House. I have calls out to both agencies.

UPDATE: Reginald McElhannon of PFH confirmed the signing of a letter of intent and referred me to Quapaw.


Casey Bright, director of Quapaw, confirmed in a phone interview that he had signed a letter of intent to purchase PFH facilities in Arkansas, but some final details remain to be completed.

“The plan would be to operate the facilities as they have been and to retain as much staff as possible.” In all, the deal covers 47 locations in Arkansas with 500 employees serving some 9,000 people.


Bright, who’s been with Quapaw, a 40-year-old agency, for 11 years, said Quapaw became in a position to pick up PFH’s substantial Medicaid mental health business when it qualified as a Medicaid provider July 1. It has relied on private pay patients and insurance.

This afternoon, Quapaw issued a news release so the word would get out and to encourage employees to prepare for a transition. He said he hoped to have completed hiring by Oct. 1 and to close the deal Oct. 12. Some questions remain about the transition with DHS. Amy Webb, a spokesman, had said PFH’s contracts had ended and Quapaw would have to go through the procurement process for services. Bright said he hoped some of the transition could be eased by using Quapaw’s Medicaid billing to more or less seamlessly pick up existing patients.

Bright said he’d disclose financial terms when the deal was completed.

In answer to my question, he said PFH would have no continuing relationship with Quapaw. He said that while Quapaw isn’t as big as PFH, it had grown substantially in assets over the years.


Amy Webb, a spokesman for the Department of Human Services, in earlier confirming the potential deal, had noted that all DHS contracts with PFH were terminated Aug. 31. Quapaw could bid on future agency requests for services.

PFH at one time provided various services at more than 40 centers around the state employing as many as 500 people. It received $36 million in Medicaid funding in a year.

It was suspended from Medicaid after the public corruption probe became public and began multiplying. One of its top executives, Rusty Cranford, has pleaded guilty to using agency money for bribes and kickbacks and lavish living for himself and other executives. It or its affiliates have been implicated in kickback schemes with at least six legislators, four of whom have been convicted of crimes. Another lobbyist, an accountant, a top PFH officer, a program supervisor and a billing director have been charged with crimes. Several other executives have been fired. The Springfield, MO.-based nonprofit has charged almost $1 billion over the last dozen years to federal agencies to support programs in five states and continues to operate in other states. Its leaders today say it is cooperating with investigators and attempting to close the door on past practices that the board of directors said it was unaware.

PFH sent this communication to employees today.

Here’s the Quapaw House announcement,.