The Arkansas Department of Human Services on Tuesday suspended two companies from the state's Medicaid program, a day after the agency identified the owner of the companies as a person accused in federal court papers of providing bribes to a former department deputy director.
Trinity Behavioral Health Care, an inpatient mental health facility for youths in Warm Springs, and Maxus Inc., which provides outpatient behavioral health services for youths and adults throughout the state, were notified of the suspension in separate letters that cited a "credible allegation of fraud."
Trinity provides care for 80 to 90 Medicaid beneficiaries, and Maxus, which operates under the name Arkansas Counseling Associates, provides outpatient care for about 2,500 program beneficiaries.
Both companies are owned by Ted Suhl, a businessman whom the Department of Human Services identified this week as the person accused in federal court papers of providing bribes to Steven B. Jones, a former deputy director at the agency.
Suhl has denied any wrongdoing, and on Tuesday, he indicated through his attorney that he will appeal the suspensions.
Jones, 49, pleaded guilty last week to charges of conspiracy and bribery concerning programs that receive federal funds. Jones also admitted in federal court to receiving bribes and other things of value, such as meals, from a business owner in exchange for using his position to benefit the owner's two companies -- an inpatient mental health company and an outpatient mental health provider.
The companies weren't named in Jones' plea agreement. Neither was their owner, whom federal prosecutors identified only as "Person C."
On Monday, the Human Services Department issued a statement naming Suhl as "Person C" based on its own internal review, and Tuesday, a department spokesman confirmed that the agency plans to refer the two companies to the office of the Medicaid inspector general and the attorney general's Medicaid fraud unit for an investigation.
The department's Medical Services Division also issued the nearly identical letters of suspension to the two companies.
"This action is taken based upon credible allegations that you, as owner of Maxus, a behavioral health care provider, allegedly provided cash and other things of value to an official of DHS, in return for that official's acts, including the provision of internal DHS information that benefited both you and Maxus," one of the letters reads. The other letter uses the same language but refers to Trinity.
Both letters refer to the allegation as an "illegal" exchange of cash and other things of value for acts beneficial to the companies.
In the letters, Medical Services Division Director Dawn Stehle wrote that the suspensions immediately barred the companies from receiving payments for any new claims, but that Medicaid would still pay claims for existing beneficiaries for 30 days to allow time for a "transition to new providers."
The letters refer to the suspensions as temporary, ending only when "DHS or the prosecuting authorities determine that there is insufficient evidence of fraud or until the legal proceedings related to the alleged fraud are completed."
In an interview, Michael Scotti, an attorney for Suhl, said his client denies any wrongdoing related to Jones' plea or the services the companies provided to Medicaid beneficiaries.
"We are very disappointed with the decision of DHS to terminate our services. We do not think it was in the best interest of the kids who have chosen our facilities as the place to seek their treatment. We are going to utilize our appeal rights and take all steps in our power to protect the interests of the children who are currently in our care," Scotti said.
Scotti said the Department of Human Services has found no faults in the type of care the two companies provide to Medicaid beneficiaries. The department's decision could have a negative impact on the children and adults receiving mental health care because of the interruption caused by their transfer to other providers, he added.
"DHS is ripping them out of there against their family's will to be placed with other unknown providers when there's been no indication that they have been failing to give them proper or outstanding medical care," Scotti said. "All they have is a guilty plea by a man who has implicated an unknown individual, and that's a very thin allegation upon which to make such a dramatic change in all these kids' lives."
Amy Webb, spokesman for the Human Services Department, said notification letters to those affected by the suspensions will be mailed out by the end of the week. Webb said she didn't know how quickly the patients could be transferred to other providers because some areas of the state lack some of the mental health services that may be required.
In the meantime, Suhl's companies "will receive Medicaid dollars during the transition because we want them to make sure and continue to provide care for our Medicaid beneficiaries," Webb said, noting that Suhl has 30 days to appeal suspensions.
The Human Services Department issued the letters of suspension the same day that they released the amount of Medicaid funds paid to the two companies during a five-year period. The figures were requested by the Arkansas Democrat-Gazette, the Arkansas Times and Arkansas Business under the Arkansas Freedom of Information Act.
The numbers cover 2009-2013, which includes the years in which Jones has said he accepted bribes, according to his plea agreement.
During those five years, Trinity received about $11 million per year in Medicaid payments. Maxus, which operates as Arkansas Counseling Associates, received more than $12 million in 2009 and 2010, about $16 million in 2011 and more than $18 million in 2012 and 2013, the data show.
Webb said the numbers don't appear to be out of the ordinary for providers the size of Maxus and Trinity, which she described as "large." She said the agency didn't have information readily available Tuesday to compare the two companies' Medicaid payments with those of other behavioral health providers.
Webb said that the Department of Human Services had not received any information from the FBI that the payments made to the companies were related to the investigation into Jones. The department also hadn't been notified that it should conduct an internal review of any other employees or other companies.
"It was our understanding that this was more related to the companies getting confidential internal information, and again, Mr. Jones did not have the authority to direct which providers Medicaid worked with or how much they were paid," Webb said.
Jones, who served as deputy director from 2007 through 2013, has admitted to accepting at least $10,000 in cash bribes and other things of value. Prosecutors say that some of that money was funneled through a West Memphis church and handled by "Person A," a pastor and superintendent of the church, and "Person B," a former juvenile probation officer and West Memphis city councilman.
Spokesmen for the FBI's Little Rock field office and the U.S. attorney for the Eastern District of Arkansas have declined to identify Person A and Person B. They also have declined to confirm whether Suhl is among the people referred to in Jones' plea agreement.
As deputy director, Jones was paid $117,615.06. He oversaw the divisions responsible for Aging and Adult Services, Youth Services, Childcare and Early Childhood Education, Community Services and Nonprofit Support, and Services for the Blind. Before coming to the Human Services Department, he was a state representative from 1998 through 2004.
Federal authorities have said that the investigation that led to Jones is ongoing.
A Section on 10/08/2014