ENDING OPERATIONS: Preferred Family, whose clinic here in Morrilton was one of 45 operations around the state, is planning to cease operation Oct. 12.

Preferred Family Healthcare,
the Springfield-based behavioral health company enmeshed in the Arkansas public corruption scandal, has announced a deal to sell its operations had fallen through and it planned to cease operation in Arkansas Oct. 12.

We reported in August that PFH was in negotiations to sell its Arkansas operations.  The decision was forced following the state’s decision to suspend the nonprofit from the Medicaid program after indictments of a former executive for paying kickbacks to legislators to aid business with the state, illegal campaign contributions and other misdeeds. It received more than $36 million a year from the state to provide a variety of services at 45 sites in Arkansas.


PFH had continued to provide services in a transition period.

The situation has now changed.


PFH said today

Since June, we have been in ongoing discussions with TrueNorth to acquire all of our Arkansas operations, knowing the smoothest transition for clients and employees would be to transfer all of our remaining work to one entity.

Despite everyone’s best efforts, it has become clear transferring all of our services is not feasible under mutually agreeable terms. We appreciate the dialogue with TrueNorth and anticipate discussions may continue with them and other providers regarding specific parts of our business.

At this time, however, we have determined we must also begin taking steps to close our Arkansas operations. Today, we notified the Arkansas Department of Human Services (DHS) that we will be ceasing operations in Arkansas at all current facilities by October 12, unless additional time is necessary in select locations to ensure client care is available.

We are deeply saddened that the misdeeds of a few former Alternative Opportunities (AO) leaders and employees, and the resulting loss of DHS contacts and suspension of Arkansas Medicaid payments has led us to this outcome.

We are extremely proud of the high-quality services our dedicated employees in Arkansas have provided for years. Throughout this difficult situation, the quality of their services has not been questioned.

We are working with employees to find the best possible path forward to help support the transition of clients and work. We are extremely grateful and proud of their support, and we are committed to doing everything in our power to support their transition to new employers. We also understand the critical importance of smooth transitions for our clients and are actively working with DHS and other providers to achieve this goal.

It has been an honor and a privilege to serve the people of Arkansas. While this is not the outcome for which we had worked, we will do everything in our power under the circumstances to help our clients and communities make this change.

PFH has operations in other states and legal troubles related to the company haven’t been limited to Arkansas.


I’m seeking comment from the Department of Human Services, which has already shifted some PFH services to other providers.

TrueNorth is also a nonprofit health provider with existing operations in Arkansas. It’s a sister company of Real Practices Inc. in Russellville.

UPDATE: Amy Webb at DHS says:

The Department of Human Services (DHS) received official notice today that Preferred Family Healthcare Inc. (PFH) is closing all of its behavioral health sites and leaving the state within 30 days (letter attached). PFH estimates that it is currently serving about 5,200 Medicaid beneficiaries who will be affected by the closing of these sites. PFH is required to transition all clients to new providers and has assured DHS it plans to do so.

DHS will provide Medicaid beneficiaries affected by these closures information about other Medicaid providers in their areas. Beneficiaries involved with a PASSE [managed care for people with severe needs] can contact their care coordinators for assistance in choosing a new provider. All other Medicaid beneficiaries may contact the Arkansas Foundation for Medical Care at 1-833-402-0672 for help finding a new provider. Non-Medicaid clients should contact their healthcare plan.

PFH also sent a message to its employees, a force that once numbered around 500 (I gave an incorrect figure originally.)  It repeated much of the news release message and closed this way: