Northwest Health to repay Arkansas $1 million in Medicaid settlement

A Northwest Arkansas hospital chain must repay $1.1 million to the state Medicaid program over the former State Medical Board chairman’s billing practices.

The settlement is the latest development in the Medicaid fraud investigation against Dr. Brian Hyatt, a Northwest Arkansas psychiatrist.

State investigators reviewed medical records and hundreds of hours of surveillance footage before concluding there was “reasonable cause” to believe Hyatt billed Medicaid without providing the appropriate level of patient care.

In February, state health officials suspended Hyatt from the Medicaid program, and he resigned as chairman of the Medical Board a few days later. He remains on the board as a non-executive member.

Hyatt was a contractor for Northwest Health, running the behavioral health unit at Northwest Medical Center in Springdale, at the time of the billing in question.

Hyatt’s contract at the hospital was “abruptly terminated” last May, according to state records.

“In this settlement, Northwest categorically denies that Northwest knowingly violated the Arkansas False Claims Act but acknowledges that many of the medical records supporting the covered claims contain templates created and used by Hyatt, and that the records may lack certain details and may be difficult or impossible to audit,” Arkansas Attorney General Tim Griffin’s office said in a statement. “Northwest has cooperated at all points during this investigation.”

Northwest Health will repay the state $1,112,631 for 249 Medicaid claims that couldn’t be justified by existing documentation, according to Griffin.

Christina Bull, a Northwest Health spokesperson, said in a statement that the hospital felt its employees complied with the law.

“Northwest Health has entered into a settlement agreement with the State of Arkansas related to claims submitted for behavioral health services provided to Medicaid patients,” Bull said. “The submissions were based on medical evaluations, diagnoses and other supporting documentation created by the unit’s former independent medical director Dr. Brian Hyatt and non-physician providers working under his supervision and direction in the unit.”

“While we believe hospital personnel complied with Arkansas law in all respects, Arkansas law heavily relies on the treating physician’s assessment of the patient, which was provided by Dr. Hyatt,” she said. “And, while there is no evidence that the hospital intended to submit improper claims, we also believe settlement is in the best interest of the organization at this time.”

 READ MORE about the allegations against Hyatt.  

The investigation was led by the attorney general’s Medicaid Fraud Control Unit and joined by investigators from the Office of the Arkansas Medicaid Inspector General and the U.S. Department of Health and Human Services Office of Inspector General’s Office of Investigation.

At the heart of the matter is whether Hyatt spent enough time with his psychiatric patients to justify the amount he billed Medicaid for care.

Investigators said that surveillance footage of the hospital showed Hyatt had little if any contact with patients on a daily basis, despite billing claims, according to a search warrant affidavit.

Investigators have also interviewed several of Hyatt’s employees who said they were instructed to bill for the highest level of severity, and therefore the highest reimbursement rate.

Hyatt is also a defendant in roughly a dozen lawsuits brought by former patients in Washington County. Additionally, two employees who worked under Hyatt in the psychiatric unit were arrested and charged with felony patient abuse last month.

Hyatt appealed his suspension from the Medicaid program in March. The psychiatrist hasn’t been charged with a crime, and he and his attorneys haven’t responded to requests for comment.