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Posted on Wed. Oct. 13, 2010 - 03:00 am EDT

Group-home firm to close, blames state

Can’t survive loss of Medicaid

FORT WAYNE — A Fort Wayne-based group home company said Tuesday it will immediately shut its doors because it can no longer operate without money the state is withholding.

Your Friends and Neighbors officials blamed the closure on state officials who last month announced they would no longer consider the company an approved Medicaid provider and would stop all Medicaid funding. Your Friends and Neighbors disputed the state’s decision to remove its clients and has an ongoing court dispute in Marion County with the Indiana Family and Social Services Administration.

As a result of the closure, Your Friends and Neighbors’ remaining 95 clients in the Fort Wayne area and about 40 in South Bend and Indianapolis will immediately be transferred by state officials to new providers.

Just a few months ago, Your Friends and Neighbors employed about 500. It still employs about 200 who are in limbo as they try to help with the transitions, according to the company.

While the state legally had the right to withdraw Medicaid eligibility, Your Friends and Neighbors executives Tuesday questioned the ethics of doing so.

“The goal all along seems to have been to push us to this closure,” said Becki Shank, Your Friends and Neighbor’s northeast regional manager. “This has been a battle for months now.”

Shank said the company has been trying to make ends meet without $1.7 million it would typically receive from the state, but can no longer do so.

The company provides residential services to people with developmental disabilities, but it faced scandal this year when its former chief operating officer, Ernest Beal, was convicted of raiding clients’ trust funds.

Shank said Your Friends and Neighbors tried working with the state to show the issue with Beal was isolated, but she and other staff said they did not receive good cooperation or communication from state agencies.

“We do provide good care,” she said, citing the fact that many of Your Friends and Neighbors staff have been recruited by similar companies since the controversy erupted and they began losing jobs. “It’s just frustrating because we are not as big and powerful as FSSA.”

FSSA has said Beal’s conviction alone would have been enough to warrant the removal of clients from Your Friends and Neighbors, but the agency cited other concerns, which company officials have disputed.FSSA spokesman Marcus Barlow said the state doesn’t owe any money to the company because it does not consider it a valid Medicaid provider.

Barlow said state officials are dealing with the cases on an individual basis, and while the transfers will be made “as soon as possible,” it’s impossible to know how long they will take.

Without Medicaid reimbursement from the state, clients who chose to stay with Your Friends and Neighbors were responsible for payment. But the company said it decided not to charge any of the Medicaid recipients if they chose to stay, while the case was pending.

That has led to an emptying of the company’s coffers, Your Friends and Neighbors’ Shank said. Finally, it faced closing its doors or not meeting payroll or being able to buy groceries for clients.

Last month, a Marion County Superior Court judge issued a stay on the state’s most recent order to remove Your Friends and Neighbor’s clients, saying the state’s decision might have been “invalid or illegal” and essentially granting the group home company a reprieve.

That case is pending, but the decision might not have any practical implications now that the company is ceasing operations.

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