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State moves to boot provider from Medicaid 

Provider fights back, says it will improve.

The Department of Human Services has issued an order to terminate Gilead Family Resource Center, a mental health care provider based in McGehee, from the state Medicaid program. DHS also ordered that Gilead repay the state $815,807 in improper billings. The company operates seven outpatient facilities across Southeast Arkansas and serves about 425 people, most of them children.

Though the order imposed immediate termination, Gilead won a temporary restraining order in Pulaski Circuit Court that allows it to continue billing Medicaid until the completion of its appeal. Officials with the company have indicated that they will continue to fight the ruling.

“This is very serious,” said DHS spokeswoman Julie Munsell. “The state considers termination to be a last resort.”

Findings of wrongdoing followed a joint audit by DHS's Division of Medical Services, which conducts billing reviews, and by its Division of Behavioral Health Services, which checks for proper treatment. The audit report listed numerous billing irregularities — including insufficient documentation, double billing and misuse of billing codes to get excessive payments.

The audit also found that the company engaged in improper medical practices. It said the company's general practitioner prescribed psychotropic medication to preschoolers without consulting a psychiatrist. The report also states that children were diagnosed with mental illness by social workers and nurses unqualified to make such a diagnosis.

Children at Gilead received diagnoses ranging from attention deficit hyperactivity disorder (ADHD) to more major afflictions such as bipolar disease. According to DHS findings, at least 13 of those major diagnoses were given to preschoolers in contradiction of professional standards. ADHD was diagnosed in at least 60 youths despite evidence suggesting that other considerations were warranted. The findings also state that “127 out of 129 [reviewed] cases certify beneficiaries as seriously emotionally disturbed (SED) or seriously mentally ill (SMI).” Children so designated generally receive medication. 

The audit covered the period from November 2006 to November 2007. Gilead's current owner, Charles S. Gibson II, bought the company in August 2007.

Gibson said he was aware of the DHS audit before taking over the company. “In this business there are always audits,” he said. “It did make us think twice about it, but we had been through numerous audits before.”

Gilead's previous owner was James Chambers, who Gibson said lives in Texas. He could not be located for comment.

Gibson declined to disclose what he paid for the company, but state sources say Gibson's group bought Gilead for around $4 million, with a $500,000 down payment and the rest to be paid from company profits over time.

Gibson said he did some legal work for Gilead before becoming its owner. He also said Lisa Moon, whom the secretary of state's office lists as Gilead's current vice-president, and Stephen Montgomery, listed as its current treasurer, worked at the company for a few months previous to the ownership transition.

In a letter sent to the state in November 2007, Moon wrote that she had been the chief operating officer of Gilead since January 2007, and that Montgomery had been Gilead's CPA for several years. Montgomery said his services until July of 2007 were limited to crunching numbers produced by Gilead's in-house accountant. He added that Moon's capacity as COO was limited and that Chambers called all the shots, regardless of titles.

Gibson acknowledged that he controlled the company for a period covered by the audit, but he argued that his governance was not at fault for any of the wrongdoings found by DHS.

“The time that spilled over into our tenure was basically right when we took over and were not really aware of everything we needed to be aware of at the time,” Gibson said.

The move against the agency had a political dimension because Gibson is a member of a politically influential Southeast Arkansas family. Gibson met with Gov. Mike Beebe to talk about the sanctions, but Beebe did not reverse them. 

“The governor's first priority is the health and welfare of those kids,” Beebe spokesman Matt DeCample said. “He's 100 percent behind the DHS decision.”

However, in a telephone interview Gibson said he was hopeful that Gilead will eventually be allowed to return to the Medicaid payroll. “The governor said that it's his intent that everything is run right, and we said that's our intent too.”

Around 90 percent of Gilead's revenue comes from Medicaid, which paid the company about $3.3 million in fiscal 2007. Gibson said the company is working with DHS to make improvements needed to keep itself in business. “Honestly, most of the changes we need to make are already there,” he said. “They just don't show up in the historical record before we took over.”

DHS spokeswoman Munsell confirmed that DHS is monitoring the company's progress and helping it fix its problems. But she said DHS remains committed to the decision to terminate. “We still have concerns about the quality of care, but we also want the facility to have an opportunity to correct any issues,” Munsell said. 

There are nine children in state custody who are currently patients at Gilead. Munsell said the state has taken initial steps to find a new healthcare provider for them.

Parents of other children will have the option to switch providers, though they won't be required to. Normally when a company's Medicaid contract is terminated, the state sends a letter to families informing them of the situation and suggesting other providers, but that letter has been withheld pending Gilead's appeals.

Munsell said it's the department's opinion that there are sufficient facilities in Southeast Arkansas to serve children currently at Gilead. She said available providers include Delta Counseling Associates, DaySpring Behavioral Health and Arkansas Counseling Associates. The last is one of the companies operated by another controversial provider of children's mental health services, Ted Suhl, who operates the Lord's Ranch in Warm Springs. Suhl's multi-million-dollar operation was a key contributing factor to an ongoing legislative review of an explosion of state spending on youth mental health services, a rate that exceeds that of many larger states.

Gilead claimed in its request to block the state order that shutting down the company would put an undue hardship on mental health services in Southeast Arkansas. According to the complaint, Judge Teresa French, who handles juvenile cases in the Tenth Circuit, was opposed to DHS' decision.

“Judge French has been advised of the termination letter and has advised Gilead that she has over 300 minors in her court that are clients of Gilead,” the filing said. “Judge French also expressed amazement that Gilead's right to operate was summarily terminated without notice or right to cure, and moreover, that such termination will result in a catastrophe by dissociating over 300 clients in need of services from their provider. Judge French further stated that the proposed immediate termination would create chaos within her court and will devastate the mental health of the children served by Gilead.”

Judge French could not be reached for comment despite repeated calls.

The state has moved to dismiss the temporary restraining order allowing Gilead's continued operation. Circuit Judge James Moody is scheduled to rule on the motion June 23.

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