This small south Arkansas city was once one of the top oil producers in the nation.
On June 2, a plane carrying Gov. Mike Huckabee to a political event in North Carolina was forced to make an emergency landing in Tennessee. The problem was engine failure, but no one was harmed in the incident, and Huckabee was able to continue his trip after the equipment was repaired.
But the incident attracted extra attention to the trip, and Arkansas Times reporter Jennifer Barnett Reed revealed in a June 15 article that the plane was provided by Southeastern Asset Management, which is registered in New Hampshire and managed by Ted Suhl.
Suhl runs the Lord’s Ranch, a residential treatment center in Warm Springs (near Pocahontas) that was founded by his father, Bud Suhl. The Lord’s Ranch is a contract service provider for the state Medicaid program, and it received $8.5 million in taxpayer funds during the 2006 fiscal year.
Since 2000, Suhl and entities he controls have contributed over $100,000 to Arkansas political causes, as Times editor Max Brantley revealed in his June 21 column. Among the recipients were Huckabee and his wife, Janet, who cumulatively received $5,000.
As it happens, utilization of the Lord’s Ranch for children’s behavioral health services has increased exponentially during that same period, going from $140,490 in 2000 to $8.5 million in 2006.
And Huckabee’s use of Suhl’s jet came only three weeks before a state legislative hearing about evidence of waste and inefficiency in the rapidly growing area of children’s mental health treatment. The market rate for chartering a similar plane is between $1,550 and $1,900 an hour, but Huckabee claimed the trip was an in-kind contribution to his Virginia-based Hope America political action committee, and therefore not subject to Arkansas gift reporting regulations.
Suhl and other Lord’s Ranch officials would not return calls from the Times to discuss the history of their relationship to state government and the motivations behind their political activity. Nevertheless, they are near the center of a debate about children’s mental health services that is certain to become more contentious in the months ahead, with millions of dollars in state funds at stake.
“You’re spending a lot of money on this system, but I believe you’re spending a lot buying the wrong services,” Cliff Davis testified at a state legislative joint committee hearing on June 21.
Davis is a consultant with Human Service Collaborative, the agency hired to produce a report on Arkansas’ approach to providing children’s mental health services through Medicaid. The report asserted that a lack of oversight combined with a reliance on in-patient treatment has led to increased and inefficient spending without corresponding results.
For instance, in a May 15 letter to the legislature that accompanied the consultants’ report, state health and human services director John Selig wrote:
Over the past four years, Arkansas Medicaid spending on children’s mental health has doubled. The state now spends over $200 million in Medicaid on mental health care for children, an increase of over $100 million since 2001. Yet we have little or no information about the impact of these expenditures as children enter and leave treatment. This spending also reflects our overuse of inpatient treatment for a small number of children at a much higher expense:
• Over $112 million pays for inpatient care for fewer than 6,000 children ($21,000 per child on average).
• Approximately $89 million pays for outpatient services for over 50,000 children ($1,700 per child on average).
“Some of the increases in spending have been so dramatic and there is so little evidence right now to demonstrate that children are, in fact, receiving the most appropriate or effective form of care,” said Rich Huddleston, the executive director of Arkansas Advocates for Children and Families. “When you have data that suggests that Arkansas, compared to the rest of the nation, is putting so many more kids into residential treatment — acute care, inpatient care — you have to wonder whether we are putting kids into the most appropriate type of care.”
However, part of the reason why Arkansas sends so many children to inpatient centers is that there are not enough outpatient facilities providing mental health services, according to state Medicaid director Roy Jeffus.
Furthermore, to understand why the state is suddenly faced with an explosion in children’s mental health costs, it helps to go back to before 1991. That year, the federal Medicaid administrators decided that only states already covering inpatient residential treatment for children’s behavioral health would be allowed to continue doing so. Arkansas was one of only a small number of states that fit in that category, so residential treatment remained an option through Medicaid.
There were few such treatment facilities in the state at that time, so some children in the state’s custody were sent to the Brown School Treatment Centers in San Marcos, Texas. This eventually prompted legislators to complain about tax dollars being spent across state lines, and in the mid-1990s they passed a law requiring children in the state’s custody to be treated in-state as a first option.
As a result, national chains like BHC Pinnacle Pointe Hospital, Rivendell Behavioral Health Services and Charter Behavioral Health Systems opened facilities in Arkansas, joining already-existing operations like Youth Home, Centers for Youth and Families and the Lord’s Ranch.
“When you create opportunities, it creates a demand,” said Jeffus, explaining how the arrival of additional locations led to an increase in residential treatment for children under Medicaid. “Also, the option has always been there for a child to be eligible for Medicaid apart from their family’s income, but the only way to get that eligibility was to go into an inpatient facility.”
An increase in outpatient treatment in recent years has slowed the growth of inpatient services, but according to Jeffus, “there has not necessarily been a huge decrease in inpatient care corresponding to the increase in outpatient treatment,” underscoring the concerns about the efficiency of state spending for children’s mental health services.
All of this history is reflected in the experience of the Lord’s Ranch, but not without complication and controversy.
Bud Suhl established the facility in the mid-1970s as a Christian school and rehabilitation center. (He told the Arkansas Democrat-Gazette in 1995 that “the Lord's Ranch incorporates a ‘Bible orientation’ into its program.”) Eventually Suhl registered the Lord’s Ranch as a non-profit organization and applied for licensing. The operation grew slowly over the years, accepting in-state and out-of-state referrals, most notably from state agencies in Illinois.
Then, in March 1990, the Arkansas Child Care Facilities Board voted to revoke the Lord’s Ranch license on the basis of 16 alleged violations, including the improper use of restraints on children and the falsification of records. Two months later, the board reversed its decision and gave the Lord’s Ranch an expanded provisional six-month license after it hired a retired state social worker as its social services director.
Less than four years later, the relationship between the Lord’s Ranch and the state deteriorated further, when in January 1994 the facility blocked inspectors from interviewing children in an abuse investigation. A report about the incident mentioned that Ted Suhl purchased two AR-15 assault rifles, two shotguns and several handguns on the same day the inspectors were barred from carrying out their duties.
Even after the Lord’s Ranch pledged to cooperate with inspections and restrict firearms on its property, the state cited further compliance violations in 1996.
But then something changed: Huckabee became governor in July 1996 when Gov. Jim Guy Tucker resigned the office.
According to a March 2001 article in the Democrat-Gazette, “campaign disclosure reports show that [Ted] Suhl and other individuals and corporations connected to The Lord's Ranch gave Huckabee at least $8,650 between December 1996 and December 2000.”
Huckabee quickly appointed Ted Suhl to the state Child Welfare Agency Review Board and re-appointed him in 2000 and 2004. Other Lord’s Ranch administrators appointed to state boards include Russell Dixon, the director of the facility’s psychiatric program, who was placed on the state Psychology Board, and Alonza Jiles, a social services director and preacher with the Lord’s Ranch who was appointed to the state Board of Correction earlier this year.
After Huckabee directed the human services department to allow the Lord’s Ranch to compete for state business, it was awarded a $140,490 contract in 2000 to provide psychological treatment for children. Since then, the Lord’s Ranch has benefited from the overall growth in Medicaid spending on children’s mental health, culminating in the $8.5 million it received last year.
As the relationship between the Lord’s Ranch and the state deepened, Ted Suhl’s political contributions increased and expanded to include legislators who would have a role in reviewing Medicaid policies and budgeting. In 2004, with the help of lobbyist Ron Fuller (who also was Huckabee’s chief fundraiser), Suhl directed over $43,000 in campaign donations to the state Republican Party and lawmakers of both parties, including members of the House and Senate public health committees. During the legislative session that followed, in 2005, the Lord’s Ranch got its $8.5 million.
When asked if Suhl’s political giving was intended to influence policy in his favor, Jeffus, the Medicaid director, said, “In general, anyone involved in the health care field, if they are concerned with how public dollars are spent, is going to want to know where public officials are going to stand on that.”
Jeffus added that operations like the Lord’s Ranch depend on Medicaid dollars to survive, because private insurers are still reluctant to offer mental health coverage. “The major market for them is Medicaid,” Jeffus said.
There are indications that the Lord’s Ranch will continue to grow. When Bud Suhl purchased a 73,822-square-foot shoe manufacturing plant in downtown Pocahontas in 1996, the Arkansas Business newspaper reported he would transform it into Majestic Fine Arts Productions and produce “framed artwork with a Christian motif.” The same article mentioned that Suhl owned “more than 500 acres throughout the county.” Sources in Randolph County who asked to remain anonymous told the Times that the Suhl family has been steadily acquiring additional real estate since then.
Ted Suhl also apparently has his hand in a host of other health care corporations. A 2003 article in the New Orleans Times-Picayune lists him among three incorporators of the River of Life Medical Center in New Orleans, and the Arkansas Gazette in 1990 reported his incorporation of Randolph Good Samaritan Rehabilitation Center.
And as momentum builds to shift more Medicaid dollars toward outpatient mental health services for children, Suhl is well-positioned for the change. He owns Arkansas Counseling Associates, a for-profit company that provides outpatient behavioral therapy.
Since May 2004, the state Medicaid program has paid Arkansas Counseling Associates $2,810,695, according to the Health and Human Services department.
Overall, outpatient mental health services for children have grown faster than inpatient care in recent years as a share of total Medicaid expenditures in that area, going from about $38.6 million in 2001 to $88.7 million in 2005, while inpatient treatment went from about $62 million to $112.5 million during the same period. The outpatient growth is even more striking in the number of children being served, jumping from 28,988 to 50,497 from 2001-2005, as compared to an inpatient population that increased from 3,528 to 5,154 during those years.
As the Medicaid system feels the strain of this growth, and in the wake of last month’s consultant’s report, the state is beginning the process of restructuring the way it provides mental health services for children.
A task force comprised of system of care workers from both for-profit and non-profit institutions was scheduled to hold its first meeting on July 18, and it will meet every two weeks thereafter. Medicaid director Roy Jeffus said the task force does not have a timetable to issue its recommendations.
“We need to fix what’s broken, and the status quo has to change,” Jeffus said. “That entails making sure we get the right service early on.”
He means that more emphasis should be placed on preventive mental health care for children, in order to head off lifetime disorders. While inpatient care now represents the bulk of Medicaid spending for behavioral health services, it really should be reserved for crisis management, Jeffus said.
Also, more pressure needs to be applied to private insurers to take some of the burden off Medicaid.
“Medicaid is the payer because private insurance won’t cover mental health,” Jeffus said. “There ought to be some comparability. If you have a commercial health plan, why should taxpayers have to pick up the tab? There is no differentiation in physical health plans, but there are limitations or no coverage for mental health care.”
Meanwhile, Rich Huddleston of the Arkansas Advocates for Children and Families stressed the need for increased accountability.
“Are kids getting the kind of care they need to stay emotionally healthy?” he asked. “Right now we don’t know the answer to that. There are no standard definitions of care, and there is no evidence that there is a systematic process for assessing the needs of kids on the front end. On the back end, there is no accountability for the effectiveness of the services the kids receive.”
Officials with Youth Home dispute that point, asserting that the facility is closely monitored by state regulators and was audited 13 times last year by APS Healthcare Midwest, the Arkansas Medicaid contract auditor. Beth Cartwright, Youth Home’s executive director, and Maurice Shirley, its regulatory affairs director, said that children admitted to the inpatient program must have prior treatment and a background check before they arrive. Each child’s progress is monitored every 30 days, they said, and the APS audits include interviews with every child and reviews of all records and progress notes. (Scott Strang, the APS executive director in Little Rock, said he could not comment for this article.)
Huddleston countered, “I do think it is worth noting that testimony presented at [the June 21] hearing said that APS was approving 98 to 99 percent of applications and referrals for services. Also, testimony provided at the hearing said that it was mostly the providers who were doing the assessments on the front end, so APS was basically relying on assessments done by the providers to make their decisions about approval of services.”
Both Jeffus and Huddleston agree that overhauling the way Medicaid provides mental health services for children does not require more money, but merely a re-direction of existing funds toward more efficient and effective treatment strategies.
“Services have been growing by 25 to 30 percent,” Jeffus said. “Is it sustainable? Are you getting what you are paying for? Are the dollars being used appropriately to meet the needs of children?”
The state says it will be guided by those questions as it moves to change the current system. But with millions of dollars in play, and political influence being wielded by those who have a stake in the outcome, it remains to be seen whether the actual reforms will reflect those priorities.
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