Lawsuits pile up against former Arkansas Medical Board chairman at center of fraud probe

Patients have flooded the former chairman of the Arkansas State Medical Board with lawsuits since his suspension from Medicaid and resignation as head of the regulatory body over doctors. 

When an Advocate investigation first revealed questions about Dr. Brian Hyatt’s billing practices, two former patients had sued the Northwest Arkansas psychiatrist over false imprisonment, battery and assault.

Since early March, the number of those lawsuits has grown to a dozen with more expected soon.

As of Friday, 68 former patients had hired the two law firms representing patients in litigation against Hyatt and Northwest Medical Center in Springdale, where he ran the hospital’s behavioral health unit.

“More lawsuits are expected to be filed in the near future,” said Aaron Cash, one of the attorneys representing the former patients.

Hyatt has filed a response in one suit, denying the allegations and asking the judge to dismiss it. He and his attorneys haven’t responded to requests for comment since late February.

Background

Hyatt came under the scrutiny of state investigators following a whistleblower complaint last year.

State officials have declined to discuss the case, and Hyatt hasn’t been charged with a crime. 

Most of the public details about the investigation into Medicaid fraud come from a search warrant affidavit prepared by an investigator in the Arkansas attorney general’s office and approved by a judge for Hyatt’s phone records. 

The affidavit revealed that investigators suspect Hyatt was billing Medicaid for one of the costliest levels of care without providing the requisite level of care to his psychiatric patients.

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

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, who runs his own practice, Pinnacle Premier Psychiatry in Rogers, appealed his suspension from Medicaid. That appeal is ongoing.

Hyatt’s contract at Northwest Medical Center was “abruptly terminated” last May, according to state records. The hospital last week agreed to repay $1.1 million to the state Medicaid program in a settlement.

Lawsuits

The first two lawsuits against Hyatt were filed early this year before Advocate’s investigation. 

Since that Feb. 28 report, five lawsuits were filed in March, and five more suits were brought in April, bringing the total number of separate civil actions against Hyatt to 12. 

The complaints are mostly similar, alleging that Hyatt, his staff and the hospital failed to provide proper treatment and held psychiatric patients against their will to recoup the highest reimbursements possible from Medicaid, Medicare and private insurance companies.

“In order to accomplish their purpose and unjustly enrich themselves, Dr. Brian Hyatt, staff, and other employees, agents, and/or representatives of the named Defendants would knowingly and intentionally hold patients in violation of Arkansas law for as long as their applicable insurance coverage would continue to pay the Defendants’ fraudulent claims,” one complaint reads.

A family member of another patient also sued Hyatt last year, blaming the patient’s suicide on a “premature” discharge from Northwest Medical Center. Hyatt in a response denied the allegations.

There were also three cases brought by patients who said Hyatt and hospital staff refused to let them leave. In those cases, judges ordered the patients’ release because petitions for involuntary commitment weren’t sought. 

Such petitions require judicial review and are required under state law in order to involuntarily hold someone with a behavioral health impairment beyond the 72-hour crisis intervention period.

Paper trail

State health records also show that the attorney general’s probe wasn’t the first time that Hyatt’s billing practices have been questioned. 

In 2015, Hyatt was audited and sanctioned after a data analysis detected irregularities in how he billed Medicaid. The audit identified similar issues to the suspicions of the attorney general’s probe, including “cloned” patient notes and incorrect billing codes. 

A review of two months of medical records found 328 instances where the documentation didn’t support the services billed.

Hyatt refunded Medicaid $17,577 and submitted a corrective action plan.

Data discrepancies triggered another Medicaid audit in 2017. That review again found that Hyatt had overbilled and insufficiently documented progress notes and discharge summaries during the 28-day period reviewed, and he was required to repay $9,847. 

Hyatt has also been accused of wrongdoing in several patient complaints to the State Medical Board, which has dismissed them all. 

One 2019 complaint accused the psychiatrist of improperly using the highest billing codes even when they were not warranted. 

A letter from the board to Hyatt said that it “found no evidence of a violation of the Arkansas Medical Practices Act. Therefore, no disciplinary hearing was scheduled.”

A letter Hyatt provided to the board also said that, while he considered the patient’s bill to be accurate, he refunded the patient.