Two mental health companies entangled in a federal bribery investigation asked a federal judge Wednesday to stop the Arkansas Department of Human Services from enforcing its decision to suspend the two providers from the state's Medicaid program.
In court filings totaling more than 200 pages, attorneys for Trinity Behavioral Health Care System Inc. and Maxus Inc. asked U.S. District Judge Kristine Baker to grant a temporary injunction that would allow the companies to continue to receive Medicaid payments for the care of more than 2,700 patients while they fight the suspension.
The motion was filed along with a 100-page federal lawsuit that accuses the Human Services Department of violating the constitutional due process rights of the two companies and their patients by enforcing the suspension before the companies can have a fair hearing to defend themselves.
The Human Services Department suspended the two companies last month after the agency determined that their owner, Ted Suhl, was a person accused in federal court papers of paying bribes to Steven B. Jones, a former agency deputy director.
Late Wednesday, Kate Luck, a spokesman for the Human Services Department, said that the agency hadn't been formally served with the lawsuit and that it would wait to respond until then.
Little Rock attorney Charles Banks, one of the attorneys who filed the lawsuit on behalf of the companies, said the companies decided to ask for the injunction because they face a "serious emergency" if Medicaid payments stop.
The companies, which employ more than 500 people, rely almost exclusively on Medicaid funding. Over the past five years, the two combined have received about $23 million to $29 million per year from the program, Human Services Department documents show.
If Medicaid funding stopped today as scheduled, Banks said, the companies would likely go out of business before Nov. 14, the day an administrative law judge is scheduled to consider their appeal of the suspension.
"This is a pretty draconian measure," Banks said of the suspension.
"There were no complaints against this man or these facilities. No harm caused by him to any patient. No harm caused to any public interest. There's nothing before DHS that says that this type of step should have been taken. It's clearly a violation of his due process rights," Banks said.
The agency suspended Trinity and Maxus in early October, citing Jones' guilty plea last month as a "credible allegation of fraud."
Jones said in a plea agreement that he accepted at least $10,000 in cash bribes or other items of value in exchange for inside information. In the agreement, the bribes -- some of which were funneled through a West Memphis church -- came from the owner of two mental health companies, Jones said.
But the owner was only identified in court papers as "Person C." After Jones' plea became public, the Human Services Department released a statement saying it had identified Suhl as "Person C."
Suhl has denied wrongdoing and argued through his attorneys that the terms of the suspension will negatively affect the mental health care of the companies' patients by forcing them to break established relationships with their current doctors and mental health professionals and go to other providers.
Trinity in Warm Springs provides inpatient mental health care for about 90 children. Maxus, which does business as Arkansas Counseling Associates, provides outpatient care to more than 2,500 patients.
In addition to the agency, the lawsuit names Human Services Department Director John Selig and Division of Medical Services Director Dawn Stehle as defendants.
It accuses the agency of acting beyond its authority by imposing the suspension, an action the lawsuit says state law only allows the Office of the Medicaid Inspector General to take. It argues that the suspension violates not only the companies' due process rights but also the rights of their patients.
"The effect of the suspension occurring before Plaintiffs are provided an opportunity to rebut the allegations against them will be that the Providers will be out of business regardless of whether they are ultimately successful at the administrative review level," Banks and co-counsel Ronald Hope wrote.
"Once the patients, employees and services providers are gone, a reversal of the wrongful suspension will be of no consequence; the entirety of the Plaintiff's business will be gone."
In addition to a stay of the suspension until the companies' appeal is disposed, the lawsuit also asks the judge to order the Human Services Department to continue to pay the companies until patients can secure alternative care in the event the suspension isn't overturned on appeal.
Banks said he hoped the judge would make a decision on the temporary injunction today. Suhl's companies are the subject of two other ongoing investigations by the Medicaid inspector general and the attorney general's Medicaid fraud unit.
Metro on 11/06/2014