A lawsuit filed by a former Mountain Home resident against a Missouri company involved in Medicaid fraud will be allowed to proceed. On Thursday, the Arkansas Supreme Court vacated an earlier decision by the Arkansas Court of Appeals to uphold the dismissal of the suit filed by Jim Parsons, currently of Bella Vista, against Preferred Family Healthcare of Springfield and returned the case to the Benton County Circuit Court for trial.
In 2017, federal and state investigators accused multiple former Preferred Family Healthcare executives of engaging in schemes to bribe Arkansas legislators, embezzle money from the nonprofit and defraud the Medicaid program of millions of dollars through improper billing practices. The company had agreed pay more than $8 million in forfeiture and restitution to the federal government and the state of Arkansas under the terms of a non-prosecution agreement, but Parsons filed a lawsuit in 2020, prior to the settlement, seeking to recover over $52.8 million the company reportedly received from the state.
In February 2021, Benton County Circuit Judge John R. Scott granted Preferred Family Healthcare’s motion to dismiss the lawsuit. Judge Scott had ruled Parsons’ suit for “illegal exaction” would require an illegal action by the state of Arkansas to use the money for other than its intended purposes. In his ruling, Judge Scott said, “There’s no question that the appropriation was appropriate,” and Parsons did not allege any wrongdoing by the state in his suit. The dismissal was later upheld by the Court of Appeals.
In Thursday’s Supreme Court decision, written by Associate Justice Robin F. Wynne, it was determined the two previous rulings conflict with a Supreme Court ruling from 1967. In the case of Nelson v. Berry Petroleum Co., the company was alleged to have “sold the highway department lower grades and quantities of asphalt than the State had paid for.” The state was not accused of wrongdoing in that case, but the court ruled, “Illegal Exaction under the Arkansas Constitution means both direct and indirect illegal exactions, thus comprehending any attempted invalid spending or expenditure by any government official.”
Click here for the Arkansas Supreme Court’s ruling.
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