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Clinics put methadone on streets

Lack of supervision enables users to sell their detox drug

Vanlieu
Bloomberg

After Jennifer Vanlieu turned to methadone treatment to beat an addiction to heroin and pain pills, she morphed from drug-user to convicted drug-dealer.

Vanlieu said she got a carryout methadone dose at a clinic operated by CRC Health Corp. in Richmond in March 2010 and then gave about 15 milligrams to her friend Carissa Plemons, who died hours later after ingesting a lethal mix of methadone and other drugs, according to police reports.

Take-home methadone – doses that patients carry out instead of taking at clinics – enabled the abuse, said Vanlieu, 26, who was sentenced to six years in prison for dealing the drug to Plemons. Although she didn’t sell it to her friend, she said in an interview that other clinic patients often re-sold their take-homes. CRC is owned by Boston-based Bain Capital Partners and is the largest U.S. provider of methadone treatment.

“Some would sell it in the parking lot,” she said.

Liquid methadone, used for decades to help addicts abate withdrawal symptoms as they quit heroin or other opiates, is leaking into illegal street sales via take-home doses, according to law-enforcement officials in Indiana, Kentucky, Virginia and West Virginia. Investigators in each of those states have linked such “diverted” doses to clinics operated by CRC.

Some former employees say the company, which operated 57 clinics in 15 states last year, works to maintain high enrollments despite chronic understaffing, increasing both CRC’s profitability and the chance that its take-home methadone doses will be abused.

“That was the culture – keep the census up,” said Mike Liaudaitis, who was a counselor at CRC’s clinic in Goldsboro, N.C., from mid-2009 until early 2011. He recalls being swamped with a 64-person caseload that exceeded the state’s limit of 50. Counseling suffered as a result, he said.

“We had no choice but to buy into it to keep our jobs,” he said.

Cupertino, Calif.-based CRC, which also operates in-patient treatment centers, youth programs and weight-management services, doesn’t put profits ahead of patients, said Chief Executive Officer R. Andrew Eckert, in a statement issued in September. He defended carryout dosing, which can help keep patients on methadone and off illegal drugs, by easing the inconvenience of having to visit a clinic daily.

“Our mission is to help these individuals, but sadly, we cannot report 100 percent success,” Eckert said. “No treatment provider can.”

While any health care company encounters “instances of chance that are regretful and unfortunate,” there are “hundreds of thousands of clients our facilities have successfully treated since our founding in 1995,” said Kristen Hayes, a company spokeswoman, in an email.

CRC has experts who visit each clinic to maintain quality and guide improvements in counseling and other areas “unlike any other provider in the business,” she said.

Widespread abuse

In states where CRC has had its highest patient-counts – Indiana, West Virginia, California and Oregon – available data and interviews show the company tries to provide take-home packages, which range from one dose to as many as 30, more often than other clinics.

“Clearly the company is saving money if they’re distributing multiple take-home doses at one time,” said West Virginia Delegate Don Perdue, a Democrat who has pursued stricter oversight of for-profit clinics. “They don’t have to have as many staff handing out the merchandise.”

In the small towns where CRC has clinics, its methadone has surfaced in criminal cases, police and prosecutors say. Dearborn County officials are planning a $10 million expansion to the local jail, needed partly because of crimes tied to CRC’s clinic in Lawrenceburg, said prosecutor F. Aaron Negangard.

“We’ve had people come down to the methadone clinic and rob a bank because they need money to pay for methadone,” he said. “We’ve had people at the McDonald’s shooting up. Whether it’s dealing or someone giving take-homes to a friend, it’s been a huge problem.”

In Kentucky, officers who raided a Kenton County house found a “moonshine jar” containing about a quart of liquid methadone, said Rob Sanders, the state prosecutor in Covington. Two residents of the house, both patients at the Lawrenceburg clinic, “were collecting methadone and selling it,” he said.

In Virginia, 3-year-old Trevor Hylton died Sept. 30, 2009, after drinking methadone that his mother, Lisa Michelle Hylton, said she left on a kitchen counter in a cough-syrup cup. She later told authorities she got the dose from a drug dealer whose girlfriend was a patient at a CRC clinic, said K. Mike Fleenor Jr., the Pulaski County prosecutor.

Police searched the alleged drug dealer’s home and found methadone bottles from CRC’s clinic in Galax, Va., Fleenor said. Hylton, 41, is serving a 20-year prison sentence for second-degree murder and child neglect.

At least two dozen people have been charged with illegally diverting methadone from a CRC clinic in Cedar Bluff, Va., said Tazewell County prosecutor Dennis Lee.

“The potential for abuse is tremendous,” Lee said. “The potential for profit is also great. I’ve often said that if I were a smart businessman, I would have invested in methadone in the 1990s.”

Overworked staff

Federal patient-confidentiality laws prevent CRC officials from discussing individual cases, said Philip Herschman, the company’s chief clinical officer, in an emailed statement. CRC follows “specific and rigid” state and federal rules in deciding which patients get carryout doses, he said.

Safeguards include lock-boxes and spot-checks, in which patients are called back to clinics to account for their take-home bottles, he said.

Carryout doses “are suspended immediately if the patient tests positive for any illicit substance,” Herschman said.

Not always, state regulatory records show. The Richmond clinic gave take-home methadone to a patient who flunked a drug test, a January 2012 audit found. The company’s Williamson, W.Va., clinic didn’t immediately revoke take-homes from a patient who had two positive drug tests in 2010, records show. In 2011, inspectors found no evidence that a physician at CRC’s clinic in Renton, Wash., used “good clinical, judgment” in giving patients carryout doses.

A CRC center in Chattanooga, Tenn., failed to supervise take-home doses properly in a case “clearly indicative of drug diversion,” state authorities found in June 2011. The company’s clinics in Claymont, Delaware, and Coatesville, Pa., were faulted in May 2012 and October 2010 for giving carry-outs to patients who missed required counseling, records show.

As for the spot-checks Herschman described – they hardly ever happened at CRC’s clinic in Goldsboro, N.C., said Liaudaitis, the former counselor.

“I may have done one or two the whole time I was there,” he said. “I didn’t have time for that.”

That’s because the Goldsboro clinic – like others described by regulators and former CRC employees in Indiana and West Virginia – was frequently understaffed, Liaudaitis said.

Since Jan. 1, 2009, CRC’s clinics haven’t met staffing standards more than 50 times, regulatory records from 15 states show. Clinics were cited 80 times for failing to document that they gave patients enough counseling. In response, the company agreed to hire more, recruit more aggressively and increase supervision. Competition for qualified workers is intense, CRC said in its 2011 annual report.

CRC didn’t pay well enough to attract or keep experienced counselors, said Malaysia Williams, who worked at its clinic in Huntington, W.Va., from June 2009 through March 2010.

“Nobody stayed there,” she said. “It paid poorly.”

Williams got $13 an hour, she said – about the same amount other former counselors reported. That’s roughly $27,000 a year.

High turnover meant large caseloads, Williams said. Her initial caseload was 120, she said; about a quarter of those files were in disarray.

Profitability

In methadone maintenance treatment, an almost 50-year-old field, drug addicts get daily doses of the synthetic narcotic. In appropriate amounts, it alleviates the symptoms of withdrawal from heroin or other opiates without getting users high. In combination with counseling, methadone can help addicts stay off illegal drugs and live with more stability, research shows.

Nurtured by government spending, methadone clinics spread nationwide in the 1960s and ’70s until strapped state and local governments began decreasing their outlays. By 2010, for-profit providers controlled 52.8 percent of the 1,200 U.S. clinics.

Over the past seven years, private equity firms have invested more than $2.2 billion in substance-abuse treatment and behavioral health companies in 62 deals, according to PitchBook Data Inc., a research firm in Seattle.

Addiction-treatment companies are “some of the most sought-after – and valuable – acquisition candidates in health care,” partly because of profit margins that can top 20 percent, according to the Braff Group, a mergers and acquisitions advisory firm in Pittsburgh.

Bain Capital, the private equity firm co-founded by former Republican presidential candidate Mitt Romney, paid $723 million for CRC in 2006, corporate filings show. Romney, who left Bain in 1999, had no input in its investments or management of companies after that, he has said.

Still, Romney reported last year that he owned more than $1 million worth of a Bain fund that holds most of CRC’s shares. He reported receiving between $100,000 and $1 million in dividends, interest and capital gains from that holding, as well as income from two other Bain funds with interests in CRC, according to the financial disclosure he filed with the U.S. Office of Government Ethics in June.

Bain executives declined to comment, said Alex Stanton, a spokesman. Representatives for Romney didn’t respond to requests for comment.

Incentive to fail

About 80 percent of the clinics’ revenue in 2005 came from patients who typically paid in cash and upfront, CRC said in a 2006 disclosure. Doses in 2011 typically cost $13 to $14.50 a day, records from three states show, and the clinics serve about 26,800 clients, most of them treated with methadone, according to the company’s annual report.

After they’ve helped addicts quit other drugs, for-profit clinics have a built-in incentive that may hurt their patients’ chances of ending their dependence on methadone, said Rod Bragg, assistant commissioner of Tennessee’s Department of Mental Health and Substance Abuse Services.

“With a nonprofit, the incentive is to get people to treatment and wean them off,” Bragg said. “When you have a for-profit and cash-only business, there is no incentive to detox them. In fact, there’s an incentive not to detox them because of the continual cash flow.”

CRC didn’t respond to a request for the number of its patients who have been successfully tapered off methadone. The company’s own study found that after one year of treatment, 89.8 percent of patients were free of any opiate other than methadone, Herschman said.

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