Preferred Family Healthcare, one of Arkansas’s largest behavioral health providers, notified its workers Tuesday afternoon that it will no longer be able to operate in Arkansas if the state moves forward with plans to terminate the provider’s contracts. The news came in a letter entitled “An Update from the Executive Leadership of Preferred Family Healthcare to Our Arkansas Employees,” which was forwarded to the Arkansas Times by an employee on Tuesday. ] not have a sustained ability to continue operations in Arkansas” if the Arkansas Department of Human Services terminates PFH’s contracts, as DHS announced it would do on Friday. Update: Preferred Family Healthcare spokesman Reginald McElhannon confirmed Tuesday evening that the nonprofit distributed the letter to employees. Preferred Family Healthcare is determined to not let the egregious behavior of a few overshadow the amazing work of hundreds of Arkansas employees for the past 11 years. Many Arkansans have been positively impacted by the exceptional care they have received through the personal efforts of PFH employees. Preferred Family Healthcare acknowledges this dedication and is saddened by the impact this will have on our staff. PFH provides behavioral health services at 47 sites in Arkansas, many in rural areas.

The nonprofit, which is based in Springfield, Missouri, also operates in Oklahoma, Kansas, Missouri and Illinois. DHS’ decision to terminate the PFH contracts came after Friday’s arrest of a former PFH executive, Robin Raveendran, on charges on Medicaid fraud. DHS and the Office of Medicaid Inspector General also said Medicaid payments to PFH would be suspended, and PFH announced it would appeal that decision later that evening. But the letter received by PFH employees Tuesday says an end to the contracts means nonprofit will have to wind down its operations in Arkansas regardless of what happens with the Medicaid suspension. “We are continuing our appeal with the State; however, without the contracts, even our anticipated success in the appeal would not allow us to continue to effectively function in the state,” the letter says. The Medicaid payments comprise a much larger share of PFH’s revenue than the non-Medicaid contracts with DHS.

36.2 million in Medicaid reimbursements in the 2017 calendar year, according to figures provided by DHS. Asked about the letter received by PFH employees, DHS spokeswoman Marci Manley declined to comment. “We haven’t received any official notification from PFH about their long-term plans in Arkansas,” she said. Manley said in an email earlier this week that Preferred Family Healthcare has the largest number of Medicaid behavioral health sites of any provider in the state. She said today that the nonprofit has submitted Medicaid claims for 10,408 individual clients since the beginning of the calendar year. In follow up to our communication yesterday, we have learned additional information which we wanted to convey to you. The Arkansas Department of Human Services (DHS) has indicated they are going to terminate our contracts. We also understand that these contracts will be transferred to other providers. If and when this occurs, we do not have a sustained ability to continue operations in Arkansas. A transition timeline will be determined in consultation with DHS and will likely be impacted by the specific needs and challenges of the services provided in specific locations. We are continuing our appeal with the State; however, without the contracts, even our anticipated success in the appeal would not allow us to continue to effectively function in the state. We are making every effort to work with DHS to better understand their transition plans and to make as orderly a transition as possible. Since we do not yet have this information from DHS, we realize many questions cannot be answered at this time. Do know we will continue to provide you with updates as able. You have been valiant through so many changes and challenges of the past 18 months. Words are inadequate to express our feelings about you and our clients and the difficult position all of us are experiencing. Please know we are sincerely doing everything possible to make this transition process as seamless as possible for all involved.

Top executives of a Missouri nonprofit bribed and organized fundraisers for Missouri and Arkansas politicians as part of a wide-ranging conspiracy to loot the company for their personal benefit, according to court documents filed last week. The nonprofit, Springfield-based Preferred Family Healthcare, directed an employee to organize fundraisers for “several candidates running for seats in the Missouri State Senate, Missouri House of Representatives and the Greene County Commission,” according to the documents. Preferred Family Healthcare provides mental and behavioral health services, and operates scores of locations in Missouri, Kansas, Arkansas, Oklahoma and Illinois. In the Kansas City area, it provides substance use disorder services at facilities in Liberty and Olathe as well as a residential adolescent program in Kansas City. It also provides support services for individuals with developmental disabilities at facilities in Kansas City and Gladstone. The documents do not identify the politicians. As a 501(c)(3) organization, Preferred Family Healthcare is prohibited by the IRS from participating in campaigns for or against political candidates for public office.

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The disclosures surfaced in court documents filed last week after Keith Fraser Noble, Preferred Family Healthcare’s former chief clinical officer, pleaded guilty to one count of concealing knowledge of a felony. The majority of Preferred Family Healthcare’s revenues come from federal sources, primarily Medicaid. 1 billion, according to the criminal charges against Noble. The nonprofit has been the focus of a years-long federal probe of corruption in Missouri, Arkansas and elsewhere that has yielded several indictments and convictions. Milton ‘Rusty’ Cranford of Arkansas pleaded guilty to one count of bribery in June. In Arkansas, a former lobbyist for the nonprofit, Milton “Rusty” Cranford, pleaded guilty in June to one count of bribery, admitting he paid bribes to at least three Arkansas legislators. One of the legislators, Rep. Hank Wilkins, a Pine Bluff Democrat, pleaded guilty in April, and a jury convicted a second, Sen. Jon Woods, a Springdale Republican, in May. The third, Sen. Jeremy Hutchinson, a Little Rock Republican, was indicted in August on 12 felony counts related to campaign finance reporting and false income tax returns, according to the Arkansas Democrat-Gazette.

3. But according to the Democrat-Gazette, other court records and trial testimony identify them as Tom Goss, the company’s chief financial officer; Goss’s wife, Bontiea Goss, its chief operating officer; and Marilyn Nolan, its chief executive officer. None of them have been charged. A spokesman for Preferred Family Healthcare, Reginald McElhannon, said in an email that the nonprofit is the product of a 2015 merger between Alternative Opportunities, based in Springfield, and Preferred Family Healthcare, based in Kirksville. The combined companies retained the Preferred Family Healthcare name. McElhannon said all of the charged or convicted individuals were associated with Alternative Opportunities and are no longer with the nonprofit. “Preferred Family Healthcare itself is not a subject of the investigation,” McElhannon said. David Ketchmark, a prosecutor in the U.S. Attorney’s Office in Kansas City, said he could not provide information beyond what’s contained in Noble’s guilty plea and other court documents. Asked if additional individuals will be charged, he said he could not comment. “The documents will have to speak for themselves in that regard,” he said. “I really can’t comment on anything outside of what we put in the public documents as it relates specifically to Mr. Noble. In his plea, Noble admitted he knew that three other Preferred Family Healthcare executives conspired with one another to divert millions of dollars. He also admitted that he helped conceal their crimes by preparing federal grant applications falsely certifying the nonprofit’s compliance with federal restrictions on lobbying. 4.3 million, which he has agreed to pay in restitution. Dan Margolies is a senior reporter and editor at KCUR. You can reach him on Twitter @DanMargolies.


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