Troubled Hospice Home Care of Hot Springs Facing Suits by Partners

by Mark Friedman  on Monday, Jun. 24, 2013 12:00 am  

Hospice Home Care of Hot Springs opened Arkansas’ first free-standing inpatient hospice center nearly a decade ago.  (Photo by Mauren Kennedy)

Two years after reaching a $2.7 million settlement with the federal government over allegations of overbilling Medicare, Hospice Home Care Inc. of Hot Springs is facing two lawsuits from business partners alleging breach of contract.

The two lawsuits — the first filed in April by Wellspring Hospice Solutions LLC of Texarkana, Texas, and the second filed in May by NEA Hospice LLC of Garland County — allege a continued pattern of questionable business practices by HHC, which opened Arkansas’ first free-standing inpatient hospice center nearly a decade ago.

In its complaint, Wellspring claims its management brought HHC back from the brink of bankruptcy, a financial meltdown that resulted from the allegations of Medicare overbilling.

Wellspring was entitled to 15 percent of HHC in exchange for providing services during a one-year contract Wellspring signed in 2009, the company said in its suit, filed in Pulaski County Circuit Court. But it never received the ownership interest, Wellspring said.

Wellspring said it filed the lawsuit this year because HHC is in negotiations to be sold for $18 million. Wellspring’s suit didn’t name the prospective buyer, but a source close to HHC said the interested buyer is Central Control LLC of Pineville, La., which operates health care facilities in Louisiana and Texas. Central Control CEO James Richardson did not respond to an email from Arkansas Business asking for comment.

Founded in 1992, HHC has locations in Conway, Little Rock, Hot Springs, Monticello, Pine Bluff and Searcy.

Camille Gamble, the manager of Wellspring, said in her court filings that if HHC is sold, she wants a portion of the sale proceeds to be held in escrow until her lawsuit is settled.

NEA Hospice, in its lawsuit filed in Garland County Circuit Court, alleges that HHC breached the contract the two companies entered in June 2010.

NEA Hospice, led by Hot Springs businessman Rick Williams, paid HHC $300,000 for HHC’s Searcy location. NEA also then paid $200,000 to cover HHC’s outstanding debt to White County Medical Center.

NEA said it was misled into giving the money so HHC could use it to help pay the $2.7 million settlement with the government. HHC has continued to manage the Searcy location since the agreement was signed.

NEA is seeking an unspecified amount of damages.

“The parties are cooperating to diligently pursue settlement,” according to a joint statement issued June 11 to Arkansas Business by attorneys Dylan Potts of Little Rock, representing NEA, and Tim Ezell of Little Rock, representing HHC. They didn’t comment further.



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