A momentous ruling came after the close of business yesterday from federal Judge Kristine Baker. She declined to issue an injunction to stop Arkansas from cutting off Medicaid payments to two corporations that provide mental health services to youths.
The companies are Trinity Behavioral Health Care and Maxus. Their owner, Ted Suhl, has been implicated in bribing a former state official to get information useful to the businesses, which provide outpatient services and residential care at a facility in Randolph County once known as the Lord’s Ranch. The operation and Suhl have been newsmakers for years — sometimes for their methods (corporal punishment and heavy doses of religion have been among the subjects of controversy) and also for Suhl’s heavy involvement in politics, through campaign contributions to legislators and close association with Gov. Mike Huckabee.
Attorneys for the companies said a cessation of Medicaid by the Arkansas Department of Human Services could threaten the survival of the companies, which had served about 90 in-patients and several thousand outpatient clients. The judge said, however:
Although Trinity and Maxus’s business interests are threatened, so is ADHS’s necessary authority to protect against Medicaid fraud and to ensure the integrity of the state Medicaid program. Although Trinity and Maxus’s patients have an interest in remaining with their current providers, ADHS has indicated that the state and bordering cities have services for these patients, and ADHS has an interest in protecting these patients from credible allegations of fraud. Therefore, at the very least, the balance of equities does not clearly favor either side. Accordingly, because the balance of equities is a close question, Trinity and Maxus’s inability to show a likelihood of success on the merits directs this Court to deny their motion for preliminary injunction.
The state still has a hearing scheduled on an administrative appeal of the suspension. The judge had earlier issued a temporary order to allow Medicaid money to continue to flow for two weeks. She held a hearing Thursday on whether to extend that order and issued her written order Friday evening, the day the order expired.
Suhl has been caring for some children in Warm Springs for free and it was unclear what immediate plans of operation are. The Arkansas Times learned earlier that Alaska had stopped sending children to the facility because of the fraud allegation, which became public when a former DHS official Steven Jones, pleaded guilty to taking bribes. No one else has been charged.
We wrote about some of the political machinations of Suhl in this 2006 article.
Mary Jacoby, a former Wall Street Journal reporter, wrote an investigative article about the operation in 2009, including how Suhl’s ties to Huckabee had produced powerful influence on state regulatory boards.
That article continues to provide periodic complaints to us from parents and former patients about Suhl’s operation. He’s a major jobs provider in Randolph County, but it sometimes comes with friction with neighbors, including one land owner recently fighting to preserve road access against Suhl development.
Could this long-running political story be about to come to a close? Remarkable, if so. Much remains to be known about the scheme in which Jones was involved. It appears to have turned on using people in the court system to steer patients to Suhl, who’s made millions thanks to publicly funded programs. Among the discoveries by legislators critical of Suhl was inordinate spending in Arkansas, compared with other states, on expensive residential care rather than community-based services.