LOSING CONTRACTS: A former Preferred Family Healthcare clinic in Morrilton, Ark. BENJI HARDY

The Arkansas Department of Human Services announced Tuesday evening that will be terminating six additional contracts with Preferred Family Healthcare, the nonprofit Missouri-based behavioral health provider that has seen multiple former executives embroiled in Medicaid fraud and public corruption scandals over the last several months.

DHS said the contracts will be temporarily transitioned to three other behavioral providers. Northeast Arkansas Community Mental Health Center, Ozark Guidance, and Counseling Associates will provide mental health services and substance abuse treatment to the clients now served by PFH under the six contracts in question. The agency didn’t say how many clients would be affected by these specific contracts.


PFH will continue to provide services to thousands of other clients around the state at its 45 sites, a DHS spokesperson indicated earlier on Tuesday.

The contracts only make up a small portion of PFH’s overall business within the state of Arkansas. A larger share of money by far was comprised of Medicaid reimbursements, but on June 29 the state’s Office of Medicaid Inspector General suspended those payments after the arrest of a former PFH vice president, Robin Raveendran, on charges of fraudulently billing the program.


PFH challenged OMIG’s suspension of Medicaid payments, but on Monday, an administrative law judge upheld the state’s decision to cut off reimbursements to PFH. It’s not yet clear whether PFH will appeal that ruling. In the meantime, PFH continues to serve clients at its 45 sites around the state, despite not receiving reimbursements for the services it is providing.

Asked on Tuesday about PFH’s intention to appeal, spokesperson Reggie McElhannon said on Tuesday that “Preferred Family Healthcare is reviewing the decision and its impact.”


DHS’ press release on Tuesday said the contracts it was terminating were “the last six of its contracts with PFH.” (It previously announced its intent to terminate five other contracts.) However, as David Ramsey reported recently, DHS continues to contract with another entity closely associated with PFH: Empower Healthcare Solutions. Empower is one of four companies in the state known as PASSEs (Provider-led Arkansas Shared Savings Entities) that will play a central role in DHS’ efforts to reform the behavioral health system through care coordination and instituting a hybrid managed care payment model. Preferred Family Healthcare has a 14 percent share in that company.

PFH, which is one of the largest providers of mental health services and substance abuse treatment in the state, also operates under the names Dayspring, Health Resources of Arkansas and Decision Point. It employes some 700 personnel in Arkansas. The nonprofit also operates in Missouri, Oklahoma, Kansas and Illinois.