CHARLESTON, W.Va. -- State officials have reinstated the license of a Wheeling-based behavioral health provider that had threatened to sue Gov. Joe Manchin for political retaliation.

The West Virginia Office of Health Facility Licensure & Certification on Thursday mailed Northwood Health Systems notification that a two-year license would be issued, Department of Health and Human Resources spokesman John Law said.

In January, Northwood announced plans to sue Manchin and numerous DHHR officials in federal court. The lawsuit -- which was never filed -- claimed the state tried to destroy the company in part because it lobbied for Medicaid legislation the governor opposed.

Last September, OHFLAC declined to renew Northwood's license. The agency cited alleged health and safety violations at Northwood facilities and the deaths of two clients under the provider's care. 

Northwood submitted plans to correct its problems, Law said Thursday, and state officials found that it has made the improvements necessary to be licensed. 

Northwood spokesman John Culler said officials there hadn't yet seen the licensing paperwork.

"Northwood continues to work through the process, and we are unable to comment, pending official notification," he said.

Northwood operates in Marshall, Ohio and Wetzel counties, serving 3,000 clients with mental illness, mental retardation and developmental disabilities. Since April, it had been working under an agreement laid out in a memorandum of understanding with DHHR.

Several provisions in that agreement worried mental health advocates, including West Virginia Advocates executive director Clarice Hausch.

For instance, the deal let DHHR's assistant secretary for legal services, Susan Perry, have final say on whether Northwood would get its license back.

"That's not what state code says," said Hausch, whose organization advocates for people with disabilities. "State code says that OHFLAC makes state licensure decisions."

Among other things, the agreement also let the state consider whether to reimburse Northwood's Ritz Avenue Group Home for Medicaid services provided while the facility had no license.

Hausch said the agreement could suggest that providers with deep pockets can exert political influence to "get the rules rewritten."

"That scares me," Hausch told the Gazette on Wednesday, before the license had been renewed. "And that should scare everyone in West Virginia."

Law said he would not respond to questions about whether the threatened lawsuit against the governor affected licensure procedures.

"We went through our usual regulatory function," he said.

Perry had final say because provider appeals regarding licensing matters always involve DHHR's legal department, Law said. 

"This is not abnormal at all," he said.

Northwood's lawsuit alleged that Manchin personally called a Northwood representative to express his anger over efforts to override his veto of legislation that would have increased Medicaid reimbursement rates for community mental-health centers.

It also claimed that an unidentified member of Manchin's staff told a Northwood representative that "if [the Governor's Office] needed to, they would 'come out swinging' against Northwood" for supporting the bill.

In January, Manchin called the accusations "absolutely, utterly false and baseless and just ridiculous."

Reach Alison Knezevich at alis...@wvgazette.com or 304-348-1240.