Appointee tie to judge probe frets legislator

Nursing-home operator’s partner put on state panel

A business partner of nursing-home owner Michael Morton, who is under federal investigation, will succeed Morton on a state commission that grants permits to nursing homes and other health care facilities -- an appointment of concern to at least one state senator.

David Norsworthy, 40, of Gateway in Benton County will succeed Morton, 64, on the Health Services Permit Commission. Gov. Asa Hutchinson's appointment of Norsworthy expires April 9, 2018.

"I would say it [Norsworthy's appointment] would be a concern until the investigation is over," said state Sen. Bryan King, R-Green Forest. "We don't know what's going to happen."

"I think there's just a lot of people watching this [investigation play out] and concerned," King added.

Norsworthy did not return phone messages seeking comment Monday, Tuesday or Wednesday, nor has he replied to requests for comment sent via Twitter.

Norsworthy and Morton are partners in 11 nursing homes in Arkansas, are directors of an insurance company serving only Medicare Advantage patients, and are among members of the insurance firm's holding company group, records obtained by the Arkansas Democrat-Gazette show.

Morton's term representing the Arkansas Health Care Association on the nine-member state commission was scheduled to expire April 9, 2014, just weeks after the first news reports appeared about the timing of Morton's campaign contributions to eight political action committees. Seven of those committees later helped finance former Circuit Judge Michael Maggio's campaign for the Arkansas Court of Appeals.

Maggio has since pleaded guilty to a federal bribery charge.

Because Beebe didn't appoint a successor, Morton remained on the panel, said Roxann Walker, planning specialist for the Arkansas Health Services Permit Agency.

King said, "It might have been better to wait until this [federal investigation] is over with" and then appoint someone.

It also "probably would have been better for Mr. Morton to resign" from the commission, King said. "If I was governor ... I would have asked him [Morton] to step aside, resign" and have just left the spot vacant for a time.

Asked about the appointment, Hutchinson spokesman J.R. Davis replied in an email, "Mr. Norsworthy was appointed because he was recommended by the [Arkansas Health Care] Association, and we didn't see any disqualifying factors."

Rachel Davis, executive director of the Arkansas Health Care Association, who is not related to J.R. Davis, said she had recommended Norsworthy "because of his involvement in our association over many years" as well as his involvement "at the national level on our national board" and "his years of clinical and operational experience in long-term care."

Under Arkansas Statute 20-8-102, at least one commission member must be an association member. A member can serve a maximum of two consecutive, four-year terms.

In a statement Tuesday, Morton said, "I had no plans to seek a second term on the commission."

He added, "I served the one term because the Arkansas Health Care Association is required to have a member on the commission, and I was willing to be recommended as that member. While it's an important job, I am happier focusing on my homes and the care we provide for seniors."

Norsworthy owns a minority interest in 11 Arkansas nursing homes in which Morton has the majority interest. Morton is the sole owner of the Greenbrier nursing home involved in the federal criminal investigation.

The Democrat-Gazette confirmed the joint nursing-home interests of Morton and Norsworthy with a directory of nursing homes obtained under the Arkansas Freedom of Information Act from the state Department of Human Services.

In each of the 11 facilities, Morton owns at least 70 percent, while Norsworthy's investments range from 8 percent to 20 percent, the directory says.

Morton also owns some nursing homes in other states. It was not immediately known whether Norsworthy is a partner in any of those.

Morton and Norsworthy are also affiliated with a health insurance company called Arkansas Superior Select Inc. The company's annual statement filed with the Arkansas Insurance Department for the year ending Dec. 31, 2014, gave 1401 W. Capitol Ave., Suite 430, in Little Rock as the company's mailing address and the primary location of its books and papers.

A quarterly statement as of Sept. 30, 2013, gave the Little Rock address for mail but gave Morton's Fort Smith business address -- 415 Rogers Ave. -- as the primary location of Arkansas Superior Select's books and records.

Arkansas Superior Select was licensed as a health-maintenance organization, commonly known as an HMO, on May 6, 2013, said Alice Jones, spokesman for the Arkansas Insurance Department.

"[Arkansas Superior Select] didn't write any business in 2014, which means they did not sell any policies to any insureds during 2014," Jones said in an email Wednesday. "It is my understanding they began marketing their product in January of this year."

Medicare Advantage companies receive a fixed amount from the federal government to provide health benefits to their enrollees. The enrollees pay their normal Medicare premiums, plus any premium charged by the insurance company.

According to HealthCare.gov, an HMO is a "type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO."

Arkansas Superior Select's annual statement for 2014 showed that Norsworthy is assistant secretary of Arkansas Superior and that he and Morton are among five men listed as directors, or trustees. The others are Tom Coble, Jerry D. Sams and Jim Cooper.

An organization chart included in the September 2013 quarterly statement indicated the five men were members of the holding company group, Select Founders LLC. The annual statement put the company's assets at $2,420,173 and total liabilities at $5,011.

The company's Facebook page promotes Tribute Health Plan of Arkansas and says in one post, "Are you or a member of your family eligible for both Medicare and Medicaid? ... This plan offers all of the benefits of Medicare and Medicaid, and additional benefits with a $0 monthly premium."

Rachel Davis said all but two of the state's 227 nursing homes accept Medicaid.

The building at 1401 W. Capitol is also home to the association and to the Arkansas Health Care Public Affairs Committee -- the name of one of the health care association's PACs.

There are also Senate and House versions of the PAC. Norsworthy was listed as chairman of the House PAC on a registration form filed Jan. 14 with the secretary of state's office. In 2014, Morton was its chairman, records show.

For months, the FBI has been investigating Morton's PAC contributions, some of which later went to Maggio's campaign. Morton has said he thought the money he gave was for that campaign.

In a plea agreement with the U.S. attorney's office in January, Maggio implicated two other unidentified people. One was described as the owner of the nursing home where a patient's death led to a negligence lawsuit. The other person was described as a fundraiser.

On July 8, 2013, Maggio heard a request from the Morton-owned Greenbrier Nursing and Rehabilitation Center to lower or reject a Faulkner County jury's $5.2 million verdict in that lawsuit resulting from the 2008 death of Martha Bull of Perryville. Also that July 8, Morton gave $24,000 in checks to the eight PACs. On July 10, 2013, Maggio lowered the judgment to $1 million.

Former state Sen. Gilbert Baker, R-Conway, helped raise money for Maggio's campaign.

Maggio later was removed from office over an unrelated matter. Neither Morton nor Baker has been charged with a crime.

State Desk on 03/12/2015

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