The article by Eric Besson and Lisa Hammersly in the Dec. 2 Arkansas Democrat-Gazette on Preferred Family Healthcare is the best explanation we’ve read so far of the corruption scandal that has led to the convictions of four Arkansas legislators.
The story about the mental health services provider that ripped off both taxpayers and the mentally ill reveals what happens when bureaucrats and lawmakers surrender their oversight duties to highly conflicted parties. We can do no better than quote from it.
The abuse occurred because “Arkansas’ outpatient mental health program allowed providers to decide which treatments and how many a client received without requiring that a third party meet directly with the patient to verify that the care was needed.
“The state paid firms like Preferred Family based on the number of treatments they provided rather than the quality or necessity of care.”
This arrangement incentivized the company to cheat. “The company’s Arkansas lobbyist and state director, Milton ‘Rusty’ Cranford, worked to preserve the system by bribing key legislators to introduce friendly legislation or block bothersome rule changes, according to court records.”
The article details how “influential provider groups” blocked proposals to change the system, including ending a moratorium on new providers — Preferred Family competitors — that was originally adopted to stem rising costs. That moratorium ended only in July, after the state overhauled its mental health services program. “Among the most significant changes was a requirement that patients undergo an ‘independent assessment’ with a third party before providers bill Medicaid for the costliest treatments.”
“When you have providers running the system and government writing the checks, there’s a problem,” former Rep. John Burris told the newspaper. “It’s too much money and not near enough accountability.”