CONWAY -- A former executive director of a now-shuttered home for men with special needs, and her daughter, were charged with Medicaid fraud and exploitation Thursday after a more than year-long investigation.
Kathy Koone Hall, 48, who had directed the Mayflower home called My House, was charged with 12 counts of exploitation, six counts of criminal acts constituting Medicaid fraud and one count of failure to maintain medical records.
Her daughter, Melanie Ray Koone McCarty, 28, was charged with six counts of criminal acts constituting Medicaid fraud and two counts of exploitation. Hall hired McCarty in 2004 as assistant to the director. In 2010, McCarty became the case manager for My House Inc., according to an affidavit accompanying a warrant for McCarty's arrest.
All of the charges are felonies, and each count could be punished by five to 20 years in prison, Prosecuting Attorney Cody Hiland said.
The charges, filed in Faulkner County Circuit Court, came after an investigation by the Arkansas Department of Human Services' Adult Protective Services division and, according to an affidavit, involve more than $156,000.
The affidavit, signed by investigator Floyd Strayer with the Arkansas attorney general's Medical Fraud Control Unit, said My House closed permanently May 31, 2013, but Medicaid was still billed for continuing to provide services that were never rendered to the residents, who were transferred to other providers the next day.
"Altogether, My House Inc. fraudulently billed $90,566.49 among six Medicaid recipients during 2012 and 2013," Strayer wrote.
"Though these recipients received daily in-home supportive care, in some cases Kathy Hall exhausted their Medicaid disbursements with over six months of service remaining to be performed under the contract," Strayer added. "Coupled with the transfer of care to other providers after the closure of My House, Inc., the exhaustion of these funds prevented Medicaid from compensating the new healthcare providers, as My House, Inc. had already collected the funds slated to be used for care throughout the entire year."
When the new caregivers made contact with the residents June 1, 2013, "they found that the [men] did not have cleaning supplies, nutritious food and some of them did not have beds large enough for them to sleep in," Strayer wrote.
Strayer said the investigation also showed that Hall had taken money equaling $65,866.80 from the residents' bank accounts. That in turn, he said, resulted in numerous overdraft charges and other banking fees for the men, he said.
Neither woman was reached for comment Thursday. There are no Conway phone numbers listed for them.
Hall's attorney, Erin Cassinelli, did not immediately return a phone message seeking comment. Cassinelli's office said she did not represent McCarty, and the name of McCarty's attorney was not available.
Strayer wrote in a second arrest-warrant affidavit that the allegations of Medicaid fraud concerning McCarty involved $4,119.50 as a result of "fraudulent case management notes."
He said McCarty "did not meet the minimum requirements to be a case manager."
According to the affidavit, McCarty had falsely written in case-management notes that she had face-to-face meetings with the My Home residents at Work Force in Conway -- a program that contracts with local businesses for work the companies need that people with developmental disabilities can do.
Strayer wrote that he determined that McCarty never visited with the My House men at Work Force on the dates her notes indicated. The Work Force center's director "further stated that she and her employees are familiar with Melanie McCarty, and ... none of her employees ever remembered Melanie McCarty visiting any of the My House" residents at Work Force.
State Desk on 11/07/2014