BENTONVILLE -- Springdale-based Ozark Guidance will take over the state contract to provide substance abuse treatment in Northwest Arkansas from a nonprofit company that lost the contract in a fraud and bribery scandal.
Amy Webb, spokesman for the state Department of Human Services, and Reginald McElhanon, spokesman for Preferred Family Healthcare of Springfield, Mo., confirmed the details of Ozark Guidance's announcement Monday.
Preferred Family and its affiliates lost 16 state contracts June 29. Those contracts include the Northwest Arkansas contracts formerly held by its subsidiary, Decision Point of Bentonville. Ozark Guidance, Preferred Family and Decision Point are all nonprofit corporations.
The contract changeover will not include Decision Point's facilities, Ozark Guidance spokesman Steven Hinds said and McElhanon confirmed. Ozark Guidance seeks space to lease for residential treatment and has to find it by Sept. 1, Hinds said.
Ozark also expects to hire about 100 of Decision Point's employees, mainly front-line service providers. Ozark will use its own administrators and accounting employees, Hinds said. "Most of the people we hire will be mental health therapists," he said. As of April of this year, Decision Point had 158 employees in Benton and Washington counties, according to Preferred Family.
Decision Point has about 2,000 clients in Washington, Benton, Carroll and Madison counties, Hinds said. Most of them are expected to go to Ozark Guidance, although they aren't required to, Hinds said. This would be an expansion of about 20 percent of the 10,000 clients Ozark has now, he said.
"We see it as a challenge and as a compliment to us that the state wanted us to do this," Hinds said.
The final contract amount wasn't available Monday but would be soon, Hinds said. Decision Point's state contract showed an amount of $3.5 million, state records show.
Preferred Family owns the former Bates Medical Center on Walton Boulevard in Bentonville, among other properties. That Bentonville building houses both Decision Point's headquarters and 88 residential treatment beds for substance-abuse cases. Decision Point acquired the former hospital in 2005. Preferred Family then acquired the building when it took over Decision Point in 2011.
According to Hinds and McElhanon, Preferred Family wants to sell its properties in Arkansas and isn't interested in leasing them in the interim.
Preferred Family operates in four other states. McElhanon said his company is also in negotiation to sell its counseling services in Arkansas not under state contracts, and an announcement is expected soon. The company has 47 locations in the state.
The company decided it was in the best interests of its employees, its clients and itself to sell its noncontract clinics and services to a business that can keep the company's staff members in the same communities, McElhanon said. Continuity of care is vital in mental health services, he said.
The state Department of Human Services brokered agreements dividing Preferred Families contracts after rescinding them June 29. The deal transferring the last six contracts was finished Friday, Webb said.
The former chief Arkansas lobbyist for Preferred Family pleaded guilty in June to a $3.5 million bribery and influence-peddling scheme. The investigation resulted in either guilty pleas or convictions at trial of four former state lawmakers so far. The federal investigation is ongoing and is now known to involve at least three states. The lobbyist involved, Milton R. "Rusty" Cranford of Bentonville, also administered Preferred Family's Arkansas operations until last year.
The state put Preferred Family under enhanced scrutiny after Cranford's arrest in February. That scrutiny included unannounced financial checks. The 16 contracts were ended, and the task of reassigning them began after another former company executive was charged, after Cranford's sentencing, with Medicaid fraud.
The last six contracts reassigned Friday were in a comprehensive package dividing up Preferred Family's operation throughout the state, Webb said. The Human Services Department announced the arrangement's broad outline Friday, but the details involving Decision Point's contract weren't released until Monday's announcement by Ozark Guidance.
Ozark Guidance is now the state-contracted mental health services provider in Baxter, Boone, Marion and Newton counties. It will continue to provide mental health services in Benton, Carroll, Madison and Washington counties, according to both its announcement and one by the Human Services Department.
Counselling Associates of Russellville took over contracts for community mental health in Cleburne, Searcy, Stone and Van Buren counties, Human Services said. Northeast Arkansas Community Mental Health Center of Jonesboro, also known as MidSouth Health Systems, will take over the state contracts for community mental health in Fulton, Independence, Izard, Jackson, Sharp, White and Woodruff counties.
Preferred Family and a number of its affiliates in Arkansas saw receipts from Medicaid and other state-administered health care programs in the state increase from about $24 million to about $43 million from 2013-18, state finance records show.
The company also received payments from non-Medicaid sources, such as from the state's general revenue and federal block grants administered by the state, contracts with the nonprofit group show. Those payments increased almost 2,000 percent in about the same five-year period.
Preferred Family also was paid through fees levied by state courts, according to copies of contracts Preferred Family had with the state before the suspension announcement.
A Section on 08/07/2018