A renewed push for addiction center bill
Pennsylvania lawmaker reintroduces legislation for greater oversight
HARRISBURG — Liberation Way, like all drug abuse treatment companies in Pennsylvania, had not paid a cent for its state license when Kapil Nayar went to work there and witnessed many questionable activities.
The Bucks County company collapsed in a criminal scandal in 2019 after Nayar and others spoke to investigators and the media, depicting a hive of insurance fraud, kickbacks and the use of struggling addicts as profit vehicles. Eleven people were arrested, guilty pleas to federal and state charges were obtained, and prison sentences were meted out.
But Nayar still dislikes the fact Pennsylvania levies no charge for licenses — there are more than 800 active in the state, including 153 in the Lehigh Valley region — when the lives of struggling people are in the hands of license holders.
“They need to revamp the way in which they go about authorizing these types of facilities,” said Nayar, who now processes drug abuse information for an insurance company. “I understand the epidemic has gotten far worse since COVID. However, that doesn’t justify letting anyone operate a mom-and-pop shop for treating addiction just because there is no other, better option.”
Even as the pandemic has stoked a surge in drug deaths that could make 2020 the worst year yet in the opioid crisis, state Sen. Judy Schwank has reintroduced a bill in Harrisburg to have treatment centers pay for licenses.
It also calls for inspections at least every two years.
Schwank, a Berks County Democrat, said the Liberation Way scandal illustrates the need.
Told of Nayar’s observation, Schwank said he hit the nail on the head.
“He was in the middle of it. So truly, he gets it,” Schwank said. “We are failing the public.”
A continuing crisis
With the nation swamped by the COVID-19 crisis in 2020, the opioid crisis got far less attention than in previous years.
Shutdowns disrupted treatment for many addicts. And while The Morning Call has reported that coroners and state government disagree on what constitutes a “drug death,” state Drug and Alcohol Programs Secretary Jennifer Smith said 2020 may be the worst year of the opioid crisis.
The previous worst year was 2017, when the federal government reported 5,456 “drug-related deaths” for Pennsylvania.
That year, then Auditor General Eugene DePasquale recommended Pennsylvania treatment centers pay for licenses. An audit done by DePasquale’s staff found centers in Maryland, Delaware, Connecticut, Massachusetts and other states paid fees.
“It is clear that states with overdose death rates similar to Pennsylvania’s rate have established a fee-based system,” the audit report said.
In a recent interview, DePasquale said the scenario behind the need for license fees has not changed.
Assessing fees, he said, was a “natural evolution” for the state department.
But Richard Edley, president and CEO of RCPA, a trade organization whose members include more than 125 state-licensed treatment centers, said Schwank’s bill was an inappropriate “broad brush” approach.
The state’s treatment system is underfunded, Edley said.
Treatment programs are closing because COVID-19 crimped operations and created expenditures, such as personal protective equipment. And, he said, more costs are being created by the state’s recent transition to a new system of classifying drug abuse problems.
“And now you are going to put a tax on them?” Edley said of Schwank’s bill.
The Department of Drug and Alcohol Programs supports the bill. A spokeswoman said license fees would let the agency hire staff and streamline the licensing process.
The ripple effects, she said, would “decrease DDAP response times, improve the quality of technical assistance to providers, and enhance current agency services and efficiencies, such as complaint investigation.”
State data shows there are 153 licensed treatment centers in the eight-county region of Lehigh, Northampton, Bucks, Montgomery, Berks, Schuylkill, Carbon and Monroe counties.
Of those, 74 are listed as nonprofit and 79 as for-profit.
Another try
Schwank introduced the same bill in the last legislative session and it failed to gain traction.
She said many treatment service providers operate on slim margins, but the need for more oversight is clear.
In August 2018, more than six months before the Liberation Way arrests, Schwank responded to newspaper articles about questionable practices at the company by calling the situation outrageous and thanking employees who stepped forward.
“Some of the professionals working in this facility recognized what was going on there. They were the whistleblowers in this situation. I am glad they did,” she said.
Nayar was hired by Liberation Way as a supervisor in October 2015, and worked there until early 2017.
“It just seemed like it was a free-for-all. It was, like, disheartening and I needed to get out of there,” he said.
He testified before a statewide investigating grand jury, spoke to other federal agencies and California documentary film producer Greg Horvath. His film “The Business of Recovery” exposed abusive practices in the treatment industry.
Horvath, interviewed Monday, said Pennsylvania’s lack of license fees was at odds with everyday experience.
“There is no license that I have ever had that I haven’t had to pay for,” he said.