Former PFH employee arrested for $2.27 million in Medicaid fraud

Preferred Family Health, the Springfield, Mo.-based company at the center of recent fraud and bribery allegations and indictments among Arkansas legislators, has been temporarily suspended from the state’s Medicaid program after a former employee was arrested for fraudulently billing more than $2.27 million for services.

Robin Raveendran, 62, of Little Rock, was arrested Thursday (June 28) by the Attorney General’s Medicaid Fraud Control Unit. He is charged with two counts of Medicaid fraud, one Class A felony and one Class B felony. He is accused of coordinating an effort which reimbursed his company for 20,109 illegally billed mental health services for a total of $2,277,816.05 from Jan. 1, 2015 to Oct. 19, 2017.

The services fraudulently billed included drug and alcohol safety education programs, substance abuse treatment, therapeutic foster care and community mental health center work.

“Robin Raveendran, a known Medicaid expert, knew how to exploit the program for self benefit,” Arkansas Attorney General Leslie Rutledge said in a statement. “He took advantage of a system which provides important care to Arkansans by misrepresenting more than 20,000 services totaling over $2 million. As Attorney General, it is important for me to hold criminals accountable in order to deter future fraud within the Medicaid system.”

On Friday, the Office of Medicaid Inspector General (OMIG) notified the Araknsas Department of Human Services (DHS) of a “credible allegation of fraud against Preferred Family Health (PFH) and its former employee Robin Raveendran” based on the affidavit used in Raveendran’s arrest. As a result, the OMIG notified PFH and Raveendran that they are temporarily suspended for payment for services provided to Medicaid beneficiaries. The payment suspensions were effective immediately.

“When a credible allegation of Medicaid fraud exists, suspension of Medicaid payments is required by federal law,” said Medicaid Inspector General Elizabeth Smith. “I am carrying out my responsibilities as Medicaid Inspector General to protect the integrity of the Arkansas Medicaid program by issuing these suspensions.”

SEEKING ALTERNATIVES TO PFH
According to a DHS statement, the state agency will “review the Medicaid provider network to determine if a very limited geographical hardship exception is needed in certain areas where PFH is the only behavioral health provider to ensure client access to services. Any such exception will be for a short-term, limited duration as alternative providers are certified to offer services in that geographic area.”

DHS also said it has been working to find alternative service providers in the event the agency decides to “exercise contract termination clauses in existing contracts for the state-funded mental health, substance abuse, and other services they (PFH) provide.”

“We appreciate Attorney General Leslie Rutledge and the important work of her Medicaid Fraud Control Unit,” said DHS Director Cindy Gillespie. “We take their investigative findings seriously and are taking the steps necessary to implement the suspension and to ensure that Medicaid beneficiaries and Arkansans receiving services through DHS have long-term access to behavioral health and substance abuse services.”

Preferred Family Healthcare issued the following statement following Raveendran’s arrest.
“As the documents charging Robin Raveendran clearly show, Preferred Family Healthcare has been cooperating extensively with this investigation. Raveendran was let go from PFH in 2017. PFH continues to work with government authorities to uncover misconduct by several former leaders and employees of the organization. We are committed to cooperating and providing any information which will ensure that any individual whose actions may have violated the law are held accountable.

“Sadly, these charges show a concerted effort to deceive PFH by Rusty Cranford and a small group of former leaders, who are no longer employed because of those actions. We understand this is an ongoing process and likely not the last action taken against former employees and vendors. We continue to cooperate with authorities as they follow the facts and the evidence, including information we are providing.

“The alleged actions of Mr. Raveendran do not reflect the values of PFH. While we cannot change the past misdeeds of others, we are committed to a new path forward by continuing to implement new and thorough processes and procedures. We are grateful to the more than 4,000 employees who continue to provide critical services to individuals throughout Arkansas and the four other states we serve.”

PFH HISTORY
In late February, U.S. Attorney Timothy Garrison for the Western District of Missouri announced that Milton Russell Cranford, of Rogers had been indicted by a federal grand jury for his role in a nearly $1 million bribery conspiracy involving PFH. Cranford would plead guilty on June 7.

That indictment alleged Cranford and co-conspirator Eddie Wayne Cooper, a Democrat who served in the Arkansas General Assembly from 2006 through 2011, received $264,000 in secret kickback payments from co-conspirator Donald Andrew Jones of Willingboro, N.J., who was paid nearly $1 million by the Springfield nonprofit in a bribery scheme that lasted almost six years, from February 2011 until January 2017.

Cranford also was charged with eight counts of receiving a bribe by an agent of an organization that receives federal funds. At the time, Cranford was a lobbyist and an employee of PFH, formerly known as Alternative Opportunities Inc. He also served as an executive for the charity’s operations in Arkansas – a role similar to Dickey’s assignment.

Cooper also pleaded guilty in federal court in February for his role in a conspiracy to embezzle more than $4 million from the Springfield healthcare group. A week before Christmas, Jones waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David Rush to charges that he participated in the bribery scheme to steal federal funds from PFH.

Former Arkansas lawmaker Rep. Hank Wilkins of Pine Bluff also admitted to taking a $100,000 bribery from Cranford in a Feb. 22 statement to the FBI, the same day the Rogers lobbyist was arrested for his role in the alleged bribery scheme with PFH executives. Wilkins has since resigned from his position as Jefferson County Judge.