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Arkansas sues company accused of not delivering purchased COVID medical supplies

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Michael Hibblen
/
KUAR News
Arkansas Attorney General Leslie Rutledge announces the lawsuit Wednesday against Med-Care Health Link for equipment purchased by the state for UAMS that was never delivered.

Arkansas is suing a Virginia-based company which Attorney General Leslie Rutledge says was paid nearly $11 million for medical equipment and supplies that were never delivered.

The personal protective equipment and ventilators were bought for the University of Arkansas for Medical Sciences at the start of the COVID-19 pandemic, she said Wednesday while announcing the consumer protection lawsuit. It alleges Med-Care Health Link, LLC breached contracts with the state and violated the Arkansas Deceptive Trade Practices Act.

“Despite their best efforts, unfortunately both UAMS and the Department of Finance and Administration made very large purchases from unscrupulous characters,” Rutledge said.

She said officials had no reason to be suspicious of the company when the payments were submitted in March and April of 2020 for gowns, face shields and ventilators. The company had previous business dealings with the state, Rutledge said, “so therefore there was no reason to believe at that point that we would have something this significant occur.”

She said the Attorney General’s office worked very closely with UAMS Chancellor Dr. Cam Patterson on a number of issues at the start of the COVID-19 outbreak as officials saw price gouging and a “scramble for the health equipment that we all desperately needed.”

Amanda George, vice chancellor of finance for UAMS, said the upfront payments were made at a time when they had no choice.

“That is not typical standard practice, but it was typical during the COVID pandemic as a lot of vendors were wanting to ensure that the healthcare facilities had the cash on hand to commit these scarce resources of PPE,” George said.

In addition to the company, four individuals who brokered the deal and held the money in escrow are also named in the state’s lawsuit.

Shannon Halijan, deputy attorney general for consumer protection, said company representatives made excuses for why the products weren’t delivered.

“It was all over the board,” she said. “It was things like, ‘well, a competitor has bought it’ or ‘it’s stuck in China’ or ‘it’s even located in other states.’ It was various excuses that were given and it’s outlined in the complaint,” Halijan said.

An attorney for UAMS said about four or six months after the purchases, the company stopped responding. Rutledge said she is not aware of any other states taking legal action against the company

A call to a phone number listed for Med-Care Health Link on its website just rang, not being unanswered. An effort to message the company through its website generated an error response.