The state Human Services Department provided an update today on steps taken to end contracts with Preferred Family Healthcare and place those receiving services elsewhere. The first contracts to go affect only a handful of people.

The state suspended Preferred Family from Medicaid and other state-supported services after Medicaid fraud charges were filed against a former employee over fraudulent billings. Those charges followed multiple federal charges involving former employees and legislators over bribes, kickbacks and illegal campaign contributions paid out of company money.


After the suspension, Preferred Family notified its 700 employees in Arkansas of coming contract terminations over the next 60 days as the state worked to find alternative services.

DHS said today its officials had met with Preferred Family executives on the process. Preferred Family is appealing the suspension. Three contracts are to be transitiioned to others in 30 days. DHS said finalized plans for the other contracts, for much more services, are to be finalized within the next week.


The three contracts being terminated at this time serve the Division of Children and Family Services (DCFS). The effective termination date will be August 4, 2018. Due to DCFS’s focus on serving children in family-like settings, the number of individuals being transitioned following the termination of these contracts will be minimal. Those contracts provide for the following services:

Emergency shelter services, which are temporary, short-term placements for children who must be removed from their homes in the interest of their health and safety. At this time, no children are currently being served under this contract.

Residential treatment services, which provide youth with behavioral, mental, and/or emotional counseling in a residential treatment setting operated by the provider. Two children are currently being served under that contract. Evaluations for transition for those youth are already underway, to ensure any move is in their best interests.

Counseling services for parents involved in DCFS. Three clients received services in June under this contract. If necessary, DCFS will transition those clients with the help of PFH.

…. PFH is currently appealing the Medicaid payment suspension implemented by the Office of Medicaid Inspector General on Friday, June 29. PFH has reiterated to DHS that the organization will continue to provide services to Medicaid beneficiaries throughout the appeals process.

The termination letters sent to PFH can be found here.