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Quapaw House Completes Acquisition of PFH Clinics

3 min read

Quapaw House Inc. of Hot Springs on Thursday finalized plans to acquire the Arkansas assets of Preferred Family Healthcare Inc. of Springfield, Missouri, the scandal-plagued behavioral health provider that was cut off from state Medicaid payments earlier this year.

QHI, a substance abuse and behavioral health nonprofit with $8 million in annual revenue, also reached an agreement to use PFH’s physical properties, including 47 clinics and other facilities, according to Quapaw CEO Casey Bright. The PFH facilities will be rebranded under the QHI name, the company said.

Neither company revealed financial details of the deal, but Bright called it a major undertaking for his company, which had 24 sites of its own and about 160 employees before the acquisition.

Bright told Arkansas Business last week that QHI hoped to offer jobs to the 400-500 workers that PFH has in the state.

In a Thursday news release, he said the deal would transfer all PFH’s Arkansas assets and property to QHI effective on or around Oct. 12, “minus PFH’s real estate holdings.”

Oct. 12 was the deadline the Arkansas Department of Human Services had set with PFH to close its operations in the state and shift its 5,200 Medicaid clients to other Arkansas providers. PFH will continue operations in Missouri, Oklahoma, Kansas and Illinois.

Local nonprofits in the areas of Arkansas served by PFH have stepped in to fill the gap, taking over certain contracts of PHF, and Bright said last week that QHI hopes to subcontract with those local agencies to provide services they cannot offer, including inpatient substance abuse treatment.

Phone calls and emails seeking financial terms of the acquisition and details about the property involved drew no immediate answers Thursday morning.

“We have reached a deal to allow QHI to use PFH-owned properties, including all the Arkansas clinics and other facilities,” Bright’s statement said. “Our leadership team is developing an operational integration strategy and will soon provide additional information on the enrollment process for those clients interested in transitioning to QHI.

“As you can imagine, an acquisition of this size will take time to work through,” Bright’s statement continued. “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. We also must work through the process of licensing, credentialing and certification before fully taking over the PFH sites.”

PFH was once the state’s largest provider of counseling services for troubled youths and adults, but that was before federal corruption cases toppled one of its executives, the notorious Arkansas lobbyist Milton “Rusty” Cranford, and a half-dozen Arkansas legislators linked to a bribery and fraud scandal. Cranford is in jail in Missouri awaiting sentencing on bribery charges. Four Arkansas lawmakers who worked with Cranford have been convicted or pleaded guilty in related cases, and the state cut PFH’s Medicaid reimbursements in June after Robin Raveendran of Little Rock, a former PFH vice president, was charged in a separate $2.3 million Medicaid fraud case filed by state authorities.

Two other former PFH executives have pleaded guilty to embezzling from the nonprofit, as has a political operative from Philadelphia.

But in a telephone interview last week, Bright was looking ahead confidently. “I just want to stress that our company is completely separate from Preferred,” the Quapaw CEO said. “PFH is a group out of Missouri, and they’ve been good to work with [through the acquisition process],” but the two companies were not previously connected in any way. “We would just like to acquire their assets and serve their clients, and to be as transparent as possible.”

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