Former head of Arkansas State Medical Board raided by Drug Enforcement Administration

A psychiatrist who stepped down as the head of the Arkansas State Medical Board in March was raided by the Drug Enforcement Administration Tuesday.

The location and focus of the raid have not been disclosed because the investigation remains active, said the U.S. Attorney’s Office for the Western District of Arkansas. However, the doctor’s other legal troubles remain public knowledge.

Medicaid payments to Brian Hyatt’s Pinnacle Premier Psychiatry practice in Rogers, Arkansas, were suspended in late February over allegations that the doctor defrauded Medicaid while working at a hospital.

Dr. Hyatt resigned as head of the Arkansas State Medical Board on March 2, having originally been appointed by then-Gov. Asa Hutchinson, a Republican, in January 2019.

He remains on the board as a non-executive member, with his term expiring on Dec. 31, 2024. Dr. Hyatt filed an appeal of the Medicaid payment suspension in March 2023.

Dr. Hyatt, who has not been criminally charged, was head of the behavioral health unit at Northwest Medical Center in Springdale, Arkansas, from January 2018 to May 2022. The fraud claims date to this period.

In April 2022, a whistleblower in the behavioral unit contacted the Arkansas Medicaid Fraud Control Unit.

The informant claimed that Dr. Hyatt was only on their floor a few minutes a day, directed staff to cross off his name on the armbands worn by patients, and walked up and down the hall with a computer on wheels, never entering patient rooms, according to a search warrant affidavit for his phone records filed in the circuit court for Pulaski County, Arkansas. Surveillance footage supports the allegations. 

The informant alleged that Dr. Hyatt’s billing of Medicaid, Medicare, and health insurance companies was therefore fraudulent. False claims resulting in overpayments of $2,500 or more are a felony offense, Arkansas MFCU investigator Mary Bowen noted.

Dr. Hyatt billed more patients at the highest-paying Medicaid code for subsequent hospital care, which indicates patient instability and new problems, than any other Arkansas doctor billed for all of their Medicaid patients.

Of Dr. Hyatt’s Medicaid payment claims for subsequent hospital care, 99.95% were billed at the highest code. 

Going solely by the codes in the claims filed by Dr. Hyatt, none of his patients improved until the day of their release, Ms. Bowen noted. He also charged the highest-severity level for other evaluation and management Medicaid codes nearly 100% of the time.

When lawsuits alleging fraud were filed against Northwest Medical Center in May 2022, the hospital ended its contract with Dr. Hyatt. The hospital would reach a $1.1 million settlement with the Arkansas Attorney General’s Office for 246 Medicaid claims on April 28. 

Northwest Medical Center, which cooperated with the state investigation, denied that it knowingly violated the False Claims Act, acknowledging that Dr. Hyatt’s records make auditing the claims difficult.

In addition to the allegations of fraud, Dr. Hyatt is also facing lawsuits from former patients of his at Northwest Medical Center, claiming false imprisonment and other offenses.

The plaintiffs contend that Dr. Hyatt held them for longer than necessary, up to days or weeks at a time, so as to maximize the amount he would be able to claim in Medicaid payments.

Plaintiff William Vanwhy compared the unit under Dr. Hyatt to the infamous, and fictional, Nurse Ratchet. After checking himself in for depression and anxiety, after a few days he was desperate to get out.

“That unit is straight out of the 1950s, ‘One Flew Out of the Cuckoo’s Nest.’ I thought many times, ‘Hey, I can run out that door and see how far I can go,'” Mr. Vanwhy told KNWA-TV.

Mr. Vanwhy obtained his release from the hospital by petitioning a circuit court -- the Washington County Sheriff’s Office was called in to help enforce the eventual court order.

As of May 5, 68 of Dr. Hyatt’s former patients had hired a pair of law firms involved in the litigation against Mr. Hyatt and Northwest Medical Center, according to the Arkansas Advocate.

Arkansas court records show 15 open suits against Dr. Hyatt claiming false imprisonment in the pursuit of maximized Medicaid claims.