LITTLE ROCK, Ark. (AP) — Arkansas officials acted properly in suspending Medicaid payments to a Missouri-based behavioral health provider, a judge ruled.

Administrative Law Judge Vicki Pickering upheld the suspension by Arkansas Medicaid Inspector General Elizabeth Smith on Monday, the Arkansas Democrat-Gazette reported.

Smith suspended payments to Preferred Family Healthcare on June 29 after a former executive with the nonprofit was arrested in the improper billing of nearly $2.3 million in claims for mental health services.

Preferred Family appealed the suspension, but Pickering said federal regulations require states to suspend Medicaid payments in response to a "credible allegation of fraud."

The nonprofit said it's reviewing the ruling before deciding whether to appeal it to circuit court.

Preferred Family is the largest counseling provider for troubled individuals in Arkansas.

The payment suspension came after the nonprofit's former executive vice president, Robin Raveendran, was arrested last month on two felony counts of Medicaid fraud related to claims submitted from Jan. 1, 2015, to Oct. 19, 2017.

A former administrator with the state Medicaid program, Raveendran directed Preferred Family employees to bill Medicaid for the full cost of services provided to patients enrolled in both Medicare and Medicaid instead of just the part of the bill that Medicare didn't cover, according to an affidavit by an investigator with the state attorney general's office.

The scheme resulted in more money for Preferred Family because Medicaid's rates for the same services were higher than Medicare's, the affidavit said.

Medicare is the federal health insurance program for the elderly and disabled, while Medicaid covers low-income individuals and is funded by state local governments.

Smith said the suspension will stay put at least until Raveendran's criminal case is concluded. The state could make the suspension permanent if he's convicted, she said.

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Information from: Arkansas Democrat-Gazette, http://www.arkansasonline.com