A nonprofit alcohol- and substance-abuse treatment company in Hot Springs said Thursday that it has completed its purchase of the Arkansas assets of another health care provider linked to a corruption scandal involving its own executives and several Arkansas legislators.
Robin Roberts, director of administration for Quapaw House Inc., said terms of the sale, including price, are still under a nondisclosure agreement. "But certainly we'll be releasing that," Roberts said in a telephone interview.
Roberts said Quapaw has an Oct. 12 goal for a full transfer of assets from Preferred Family Healthcare of Springfield, Mo., to Quapaw, and to provide treatment for all clients who want to transfer from Preferred Family to Quapaw.
Roberts said the financial terms of the deal likely won't be released until after Oct. 12. He also said Quapaw is committed to providing services statewide, as Preferred Family did.
Before losing its Medicaid contracts in Arkansas and announcing the imminent closings of its Arkansas operations, Preferred Family Healthcare had about 500 employees at its 47 clinics and other offices in the state and more than 5,000 clients eligible for Medicaid.
Quapaw House, before its acquisition of Preferred Family, had 24 treatment sites and about 175 employees.
Quapaw House and Preferred Family Healthcare had signed a letter of intent last month for the sale.
"As you can imagine, an acquisition of this size will take time to work through," Casey Bright, Quapaw's chief executive officer, said in a statement Thursday. "We are analyzing every facet of their existing operation, taking equipment and facilities inventory, reviewing personnel and most importantly working to help transition the client base to QHI if they choose to do so."
Bright said Quapaw "also must work through the process of licensing, credentialing and certification" before taking over Preferred Family's services.
Bright said his company wants to retain as many of Preferred Family Healthcare's employees as possible and not interrupt the flow of services to the former clients, who have the choice of where to continue their treatment.
The deal allows Quapaw to use facilities both owned and leased by Preferred Family "in the short term" and "includes a plan for [Quapaw] to purchase those buildings outright in the next 6 to 12 months," Preferred Family said in a memorandum to employees on Wednesday.
Preferred Family Healthcare said it will continue to help its clients transition to other agencies for treatment, including Quapaw, until Oct. 12. As for its employees, Preferred Family said Quapaw has "indicated a strong interest" in retaining them. The memo also said its retention incentives for employees will be honored.
The Preferred Family website has several links specific to its situation in Arkansas, including a search engine for clients to find other treatment programs within 50 miles and a list of other certified behavioral health agencies. An internal link specifically for its employees in Arkansas also has been established.
Marci Manley, deputy chief of communications for the state Department of Human Services, said the agency will continue its work in making sure service to clients continues. "The dealings between two private parties do not really involve us," Manley said. "But we are continuing the process of transitioning clients. We have been working with Preferred Family Healthcare on a daily basis."
Preferred Family has clinics across the state, and the Human Services Department has six regions, with staff members to help clients in those areas.
Quapaw has facilities in Hot Springs, Russellville, Little Rock and Pine Bluff.
Quapaw House reported $5.2 million in income and $5.3 million in spending in fiscal 2016, the Arkansas Democrat-Gazette reported last month when the two companies signed a letter of intent for the sale. Quapaw has offered mental-health programs for years and was certified on July 1 to receive Medicaid payments.
Speaking generally, Manley said even a company already certified by the Human Services Department also must be certified for the facilities it takes over in an expansion or new acquisition.
How long that takes "depends on a case-by-case basis," she said. "We've seen that process happen for sites as quickly as two weeks or, for other sites, more than a month. Each site must have its own certification."
Preferred Family Healthcare brought in more than $33 million a year through the Arkansas Medicaid program until June, when the Human Services Department cut off contracts with the provider after a former executive was arrested and charged with Medicaid fraud. The company still operates in Missouri, Illinois, Kansas and Oklahoma.
Preferred Family has been under federal investigation as part of a kickback scheme involving some of its now former executives, a lobbyist in Arkansas, and Arkansas lawmakers.
Five lawmakers have been found guilty or pleaded guilty to various charges stemming from the investigation, almost entering its third year: former state Reps. Eddie Cooper of Melbourne, Henry "Hank" Wilkins of Pine Bluff and Micah Neal of Springdale; and former state Sens. Jake Files and Jon Woods of Springdale.
Sen. Jeremy Hutchinson of Little Rock resigned in August after his indictment on fraud charges.
Milton "Rusty Cranford, a lobbyist for Preferred Family Healthcare's operations in Arkansas, pleaded guilty in June to paying bribes to lawmakers and is awaiting sentencing while jailed in Missouri.
Business on 10/05/2018