Hot Springs company in potential deal to take over operations of Missouri nonprofit

The Missouri healthcare group at the center of a federal corruption and bribing scheme is said to be finalizing an agreement with a Hot Springs substance-abuse rehabilitation and behavioral health provider to take over the out-of-state nonprofit’s operations in Arkansas.

Quapaw House Inc. of Hot Springs announced Monday (Sept. 17) it is finalizing an agreement to acquire the assets of Springfield, Mo.-based Preferred Family Health (PFH) in Arkansas. No terms of the deal were disclosed, but Quapaw House officials said the Hot Springs nonprofit’s goal is to begin operating PFH assets by Oct. 12.

“We desire to retain as many PFH staff members as possible and will immediately begin to extend offers,” said QHI’s Chief Executive Casey Bright. “QHI will continue operations in the same manner as PFH is now doing and as it has been doing in the past until an integration plan is developed. We are working to reach a final agreement that will allow QHI to purchase PFH assets. By doing so, we hope to continue providing quality services to the current PFH clientele, and for the dedicated PFH staff to join the QHI team.”

The pending QHI-PFH deals comes more two months after Preferred Family Health announced a “transition timeline” with the Arkansas Department of Human Services (DHS) after state officials indicated they were going to terminate the health care group’s state contracts due to alleged past misconduct by former PFH employees.

Financial and contract data provided to Talk Business & Politics by state human services officials show that the Missouri nonprofit was awarded 16 contracts valued at more than $28 million for the fiscal year ending June 30. Statewide, those services are provided at nearly 50 health care clinics across Arkansas, as well as numerous schools and other off-site locations.

In a statement concerning the downsizing of its Arkansas operations in early July, PFH officials said the Missouri health care group’s first priority was to continue serving clients and the more than 700 employees who support them across Arkansas.

“When PFH notified the Arkansas Department of Human Services (DHS) of our intent to cease operations in Arkansas, we committed to them as well as our employees and clients that we would continue to work toward a smooth transition for all involved,” PFH officials said in a statement. “We were pleased when QHI reached out this week and while we are continuing with our plan, look forward to finalizing ongoing discussions toward an agreement to acquire our assets.”

PFH’s operations in Arkansas include more than 50 clinics that provide an array of difficult to get health care services in key rural and urban markets. The Ozark region nonprofit, one of the largest healthcare organizations in the U.S., also has nearly 4,000 employees at its other operations in Missouri, Oklahoma, Kansas and Illinois.

In fiscal 2016, PFH reported program service revenue of $181.2 million, up 172% from $66.6 million in the prior year. Companywide, more than $127 million of the nonprofit’s $170 million in expenses was used to pay salaries of 4,927 employees on the nonprofit’s payroll, federal tax filings show.

Besides the loss of its Arkansas Medicaid contracts, several PFH executives and top managers have been indicted, sentenced or reached plea agreements for their involvement in a laundry list of fraudulent schemes that has entrapped several Arkansas lawmakers and led to ongoing federal corruption and bribery probes expected to render charges.