A local company that runs group homes for adults with developmental disabilities was dealt a break this week by a Marion County judge.
But the state argues that Your Friends and Neighbors has no business serving Medicaid-eligible clients, and a spokesman for Indianas social services agency said that argument will be made in court.
Your Friends and Neighbors, which has offices in Fort Wayne, Indianapolis, South Bend and Georgia, faced scandal this year when its former chief operating officer, Ernest Beal, was sentenced to two years in prison for raiding his clients trust funds.
The Indiana Family and Social Services Administration moved to transfer clients from the companys group homes, saying Your Friends and Neighbors would no longer be eligible to receive Medicaid funds.
Your Friends and Neighbors sought the opinion of an administrative law judge, who gave the company a reprieve. But two weeks ago, FSSA said an internal review found the administrative law judges decision was in error, concluding that a government entity may craft its contracts as it deems appropriate to best administer the Medicaid program.
On Tuesday, Marion County Superior Court Judge John Hanley ruled the states most recent order may be invalid or illegal and granted a stay on the decision until the court has time to evaluate the matter.
FSSA maintains that Your Friends and Neighbors is no longer eligible to receive Medicaid funds, an assertion that company Chief Executive Officer Justin Beal disputed Wednesday.
The state has been very effective in its ability to bully parents and families into thinking theyre going to be financially responsible, he said.
He said the companys legal counsel has advised that it can continue to sign on new clients and maintain its current ones.
The CEO, the son of Ernest Beal,, says his father is no longer involved in any way, shape or form with the company, which he said is working very hard to repair its reputation.
Justin Beal said that spirit of good will extends to its dealings with the state, which he argued has not been forthcoming with reasons for the change in Medicaid eligibility and has not been willing to work with the company.
Id like nothing better than to have a good, collaborative relationship with the state, he said.
On Wednesday, FSSA spokesman Marcus Barlow said Ernest Beals conviction was not the only issue leading to the states Medicaid decision, although that alone would have been sufficient.
The company has violated clients rights by moving them without telling them where they were going, and one client was living in a home with a significant mice problem and raw sewage in the basement, Barlow said.
In other instances, Your Friends and Neighbors, which is responsible for managing clients money, has not paid rent or utilities, Barlow said. FSSA also said a routine audit found the company owes the state $130,000.