A fund championed by Gov. Greg Gianforte to fill gaps in Montana’s substance use and behavioral health treatment programs has spent $5.2 million since last year as the state waits for an additional $19 million in federal funding.

Now, the Republican governor wants to put more state money into the Healing and Ending Addiction Through Recovery and Treatment initiative, but lawmakers and mental health advocates are asking for more accountability and clarity on how the money is spent.

Republican Rep. Jennifer Carlson, chair of the Human Services Committee of the Montana House of Representatives, said her committee has heard bill proposals seeking to use HEART money for child care and suicide prevention programs, among others. She is sponsoring a bill to increase HEART initiative reporting requirements.

“You really have to think, is that what that money is for, or is that just what’s convenient?” said Carlson.

Matt Kuntz, executive director of the Montana chapter of the National Alliance on Mental Illness, said a lot of questions have been floating around about the initiative this legislative session.

“Nobody really knows exactly how this is being spent or the process of how to get it,” Kuntz said.

The legislature passed Gianforte’s HEART initiative soon after he took office. It uses revenue primarily from recreational marijuana taxes for the state’s $6 million annual share to be distributed to programs dedicated to treating substance use and mental health disorders.

A federal match would bring the fund total to $25 million, but the state is waiting for full approval of its Medicaid waiver application from the Centers for Medicare & Medicaid Services. The federal agency approved part of the waiver last year.

“Until CMS approves the full HEART waiver, the state is limited in what we can do,” said Jon Ebelt, spokesperson for the state Department of Public Health and Human Services.

The health department submits a report to CMS four times a year. Department officials did not respond to a request by KHN for the latest report. The department is supposed to receive reports from tribal nations on how their funds were used. It didn’t specify whether it had received any.

Carlson’s House Bill 310 would require the department to report HEART initiative spending to the Children, Families, Health, and Human Services Interim Committee each year. That reporting would allow lawmakers to know what the money had already been used for, and if there might be a better way to spend it, Carlson said.

When Gianforte introduced the HEART initiative during his 2021 State of the State speech, he said it was designed to give directly to local communities, which know their own needs best.

“This is not bigger government,” the governor said at the time.

The HEART money is distributed through grants and Medicaid-funded services. Of the $5.2 million distributed since 2022, $1.5 million has gone to Medicaid for services like inpatient and residential chemical dependency services, Ebelt said.

Eight Indigenous tribal nations have received $1 million covering fiscal year 2022, the first year of the fund, and 2023, the current fiscal year, which ends June 30. Those grants went toward substance use prevention; mental health promotion; mental health crisis, treatment, and recovery services; and tobacco cessation and prevention.

Seven county detention centers received a total of $2.7 million in HEART money through a competitive grant process to provide behavioral health services at those facilities.

Missoula County hired a therapist, jail care coordinator, and mental health transport officer with its share. Gallatin County hired a counselor and two social workers, and Lewis and Clark County hired a therapist, case manager, and education and transport manager.

Jackie Kerry Lemon, program and facilities director at the Gallatin County Detention Center, said the money had to be used for mental health and addiction services. “Our population is often in crisis when they come to us, so having that ability to have a therapist see them really does help with their anxiety and their needs at a good time,” Kerry Lemon said.

Democratic Rep. Mary Caferro said the HEART money could go toward increases in the Medicaid rates paid to health care providers, which a state study found fall short of the cost of care, or mobile crisis response teams, which the health department intends to provide as a Medicaid service.

Caferro is sponsoring a bill on behalf of the National Alliance on Mental Illness to add youth suicide prevention to the list of programs eligible for HEART funding.

Mary Windecker, executive director of the Behavioral Health Alliance of Montana, said the HEART fund initially was meant to support tribes and county jails, and only recently did it start funding community substance use and mental health programs, after last year’s partial Medicaid waiver approval.

That allowed larger substance use disorder treatment centers (more than 17 beds) to receive Medicaid reimbursement for short-term stays at institutions for mental illness, like Rimrock in Billings and the Badlands Treatment Center in Glendive.

From July 2022 to January 2023, Ebelt said, 276 Medicaid recipients were treated in Rimrock and Badlands. A facility in Clinton, the Recovery Centers of Montana, opened in December and will be licensed for 55 additional beds able to serve patients with the new Medicaid benefit, Ebelt said. Gianforte proposed in his state budget to increase the amount going into the HEART fund by changing the funding formula from $6 million a year to 11% of Montana’s annual recreational marijuana tax revenue.

The Behavioral Health Alliance recommended that change, but, as with many of the health-related proposals in this legislative session, a major factor in the HEART initiative’s success will be whether Medicaid provider rates are raised enough, Windecker said. If provider rates aren’t funded at the full cost of care, people won’t be available to provide the care the initiative promises, she said.

The committee that meets to determine the health department’s budget will hear a presentation about the HEART initiative on Feb. 9.

Keely Larson is the KHN fellow for the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Newspaper Association, and Kaiser Health News. Larson is a graduate student in environmental and natural resources journalism at the University of Montana.

Michelle Andrews

When Margarette Nerette arrived in the United States from Haiti, she sought safety and a new start.

The former human rights activist feared for her life in the political turmoil following the military coup that overthrew President Jean-Bertrand Aristide in 1991. Leaving her two small children with her sister in Port-au-Prince, Nerette, then 29, came to Miami a few years later on a three-month visa and never went back. In time, she was granted political asylum.

She eventually studied to become a nursing assistant, passed her certification exam, and got a job in a nursing home. The work was hard and didn’t pay a lot, she said, but “as an immigrant, those are the jobs that are open to you.”

A few years later her family joined her, but her children didn’t want to follow her career path. When she was a teenager, Nerette’s daughter, now 25, would ask, “Mom, why are you doing that?” Nerette said. Her daughter considered the work underpaid and too physical.

After many years, Nerette, now 57, left nursing home work for a job with the Florida local of the labor union SEIU1199, which represents more than 25,000 health workers. As the local’s vice president for long-term care, she is keenly aware of the staffing challenges that have plagued the industry for decades and will worsen as aging baby boomers stretch the limits of long-term care services.

The U.S. is facing a growing crisis of unfilled job openings and high staff turnover that puts the safety of older, frail residents at risk. In a tight labor market where job options are plentiful, long-term care jobs that are poorly paid and physically demanding are a tough sell. Experts say opening pathways for care workers to immigrate would help, but policymakers haven’t moved.

In the decade leading up to 2031, employment in health care support jobs is expected to expand by 1.3 million, a nearly 18% growth rate that outpaces that of every other major occupational group, according to the federal Bureau of Labor Statistics. These direct care workers include nurses of various types, home health aides, and physical therapy and occupational therapy assistants, among others.

Certified nursing assistants, who help people with everyday tasks like bathing, dressing, and eating, make up the largest proportion of workers in nursing homes. In the decade leading up to 2029, nearly 562,000 nursing assistant jobs will need to be filled in the United States, according to a far-reaching report on nursing home quality published last year by the National Academies of Sciences, Engineering, and Medicine.

But as the U.S. population ages, fewer workers will be available to fill those job openings in nursing homes, assisted living facilities, and private homes. While the number of adults 65 and older will nearly double to 94.7 million between 2016 and 2060, the number of working-age adults will grow just 15%, according to an analysis of census data by PHI, a research and advocacy organization for older and disabled people that conducts workforce research.

Immigrants can play a crucial role in filling those gaps, experts say. Already, about 1 in 4 direct care workers are foreign-born, according to a 2018 PHI analysis.

“We do think that immigrants are critical to this workforce and the future of the long-term care industry,” said Robert Espinoza, executive vice president of policy at PHI. “We think the industry would probably collapse without them.”

Nursing homes and other long-term care facilities have long struggled to maintain adequate staff. The problem worsened dramatically during the pandemic, when those facilities became hotbeds for covid-19 infections and deaths. More than 200,000 residents and staff members died during the first two years of the pandemic, representing about a quarter of all covid deaths during that time.

Since March 2020, the long-term care industry has lost more than 300,000 jobs, bringing employment to a 13-year low of just over 3 million, according to an analysis of BLS payroll data by the American Health Care Association and the National Center for Assisted Living.

Immigration policies that aim to identify potential workers from overseas to fill long-term care job slots could help ease the strain. But unlike other countries that face similar long-term care challenges, the U.S. generally hasn’t made attracting direct care workers from abroad a priority.

“Immigration policy is long-term care policy,” said David Grabowski, a professor of health care policy at Harvard Medical School whose research focuses on the economics of aging and long-term care. “If we really want to encourage a strong workforce, we need to make immigration more accessible for individuals.”

Most of the roughly 1 million immigrants to the U.S. annually are family members of citizens, though some come in on employment visas, often for highly skilled jobs.

On his first day in office, President Joe Biden proposed comprehensive immigration reform that would have created a pathway to citizenship for undocumented workers and revised the rules for employment-based visas, among other things, but it went nowhere.

“There hasn’t been a lot of interest or political will behind opening up more immigration opportunities for mid- to lower-level care aides such as home health aides, personal health aides, and certified nursing assistants,” said Kristie De Peña, vice president for policy and director of immigration policy at the Niskanen Center, a think tank.

The Biden administration didn’t respond to requests for comment.

Some local and regional organizations are working to connect immigrants with health care jobs.

Ascentria Care Alliance provides social services, refugee resettlement, and long-term care services in five New England states. With state and private philanthropic funding, the organization is beginning to help refugees from Ukraine, Haiti, Venezuela, and Afghanistan get the supportive services they need — language, housing, child care — to enable them to take health care jobs at Ascentria’s long-term care facilities and those of health care partners.

The group has long helped refugees resettle and find jobs in traditional settings like warehouses or retailers, said Angela Bovill, president and CEO of Ascentria, which is based in Worcester, Massachusetts. “Now we’re looking at what it would take to move them into health care jobs,” she said.

The alliance is applying to the Department of Labor for a grant to scale up the program. “If we get it right, we’ll build a pathway and a pipeline to move at the fastest rate from immigrant to effective health care worker,” Bovill said.

Some long-term care experts say the U.S. can’t afford to drag its feet on putting policies in place to appeal to immigrants.

“We’re competing with the rest of the world, other countries that also want these workers,” said Howard Gleckman, a senior fellow at the Urban Institute.

Canada, for instance, is going all in on immigration. In 2022, it welcomed more than 430,000 new permanent residents, the most in its history. Immigration accounts for almost 100% of Canada’s labor force growth, and by 2036 immigrants are expected to make up 30% of the population, the government said.

In the U.S., immigrants account for about 14% of the population, according to an analysis of census data by the Migration Policy Institute.

Canada’s Economic Mobility Pathways Pilot aims to identify and recruit refugees who have skills Canadian employers need. In January, after visiting a refugee camp in Kenya, recruiters offered jobs in Nova Scotia to 65 continuing care assistants.

In a December survey of 500 U.S. nursing homes, more than half said staffing shortages have forced them to turn away new residents.

These staffing challenges, said industry representatives, are likely to become an even heavier lift, with more closed facilities, units, or wings, after the Biden administration announced last year that it would establish minimum nursing home staffing requirements.

A government mandate alone won’t solve long-standing problems with inadequate training, pay, benefits, or career advancement, experts said.

“Young people aren’t going to clean 10 to 15 patients for $15 an hour,” Nerette said. “They’ll go to McDonald’s. We need to face that reality and come up with a plan.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Los estados se están preparando para remover a millones de personas de Medicaid, a medida que expiran las protecciones que se implementaron al comienzo de la pandemia de covid-19.

Este cambio abrupto, que comienza en abril, pondrá a millones de estadounidenses en riesgo de perder la cobertura de salud, amenazando su acceso a la atención y potencialmente exponiéndolos a costosas facturas.

También pondrá presión en las finanzas de hospitales, doctores y otros que dependen de los pagos de Medicaid, el programa federal de salud gerenciado por los estados que cubre a las personas de bajos ingresos y a aquellos con discapacidades.

Casi tres años atrás, cuando covid puso a la economía en caída libre, el gobierno federal acordó enviar miles de millones de dólares para fondos extra de Medicaid a los estados con la condición de que dejaran de sacar gente del programa.

Pero la legislación promulgada en diciembre, eliminará gradualmente ese dinero durante el próximo año y pedirá a los estados que reanuden recortes de beneficiarios que ya no califiquen.

Ahora, los estados enfrentan espinosos desafíos: asegurarse de no eliminar a personas que todavía califican, y conectar al resto con otras coberturas.

Incluso antes de la pandemia, los estados luchaban por estar en contacto con los beneficiarios de Medicaid, que en algunos casos no tienen una dirección estable o conexión de internet, no hablan inglés o no priorizan a la salud entre sus múltiples necesidades.

“No pensamos que esto será algo grato o elegante, pero haremos todo lo posible para no perder a nadie en el proceso”, dijo sobre el llamado retiro de Medicaid, Dana Hittle, directora interina de Medicaid en Oregon.

Con la tasa de personas sin seguro de salud a su nivel histórico más bajo, 8%, revertir eso será doloroso.

La administración Biden ha pronosticado que 15 millones de personas —el 17% de los inscriptos— perderá la cobertura de Medicaid o CHIP, el Programa de Seguro de Salud Infantil, a medida que el programa vuelve a sus operaciones normales.

Mientras que muchos de esos 15 millones perderán la cobertura porque ya no califican, a cerca de la mitad se les cancelará el beneficio por razones de procedimiento como no responder a pedidos de actualización de datos, indicó un informe federal.

Ciertos estados se verán particularmente afectados: el registro en el Medicaid y CHIP de Nevada ha aumentado un 47% desde febrero de 2020. Muchos se inscribieron al comienzo de la pandemia, cuando la tasa de desempleo del estado se disparó a 30%.

Comúnmente, las personas entran y salen de Medicaid todo el tiempo. Los estados, que tienen una flexibilidad significativa en la forma en que ejecutan sus programas, generalmente experimentan una “éxodo” significativo a medida que cambian los ingresos de las personas y ganan o pierden la elegibilidad.

El proceso de sacar personas de Medicaid se desarrollará durante más de un año.

Las personas que pierdan la cobertura de Medicaid —en los más de 30 estados cubiertos bajo el mercado de seguros de salud federal— tendrán hasta el 31 de julio de 2024 para inscribirse para cobertura en los mercados establecidos por la Ley de Cuidado de Salud a Bajo Precio (ACA), según anunciaron los Centros de Servicios de Medicare y Medicaid (CMS), el 27 de enero.

No es claro si los estados que gerencian sus propios mercados de seguros ofrecerán la misma extensión para la inscripción abierta.

Incluso los estados que ya están actuando para asegurarse que las personas no se queden sin cobertura dicen que la transición será dura.

Solo en California, el gobierno estatal pronostica que al menos 2 millones de personas de los 15 millones que están en el programa hoy perderán Medicaid ya sea porque ya no son elegibles o porque no se reinscribieron.

“Sabemos que va a ser una carrera de obstáculos”, dijo Mark Ghaly, secretario de Salud y Servicios Humanos de California. “Estamos haciendo todo lo posible para estar preparados”.

En un esfuerzo a cuatro manos, los estados organizan planes de salud de Medicaid, doctores, hospitales, mercados de seguros estatales, y un surtido de grupos sin fines de lucro, incluyendo escuelas e iglesias, para llegar a las personas en riesgo de perder la cobertura.

Los estados también usarán las redes sociales, televisión, radio y anuncios, así como sitios web y aplicaciones para conectarse con los beneficiarios. Esto además de cartas y correos electrónicos.

Nevada ha desarrollado una aplicación de celular para comunicarse con los miembros, pero hasta ahora solo 15,000 de los 900,000 enrolados en Medicaid se han registrado.

“La naturaleza temporal de la población de Nevada significa que mantener un contacto apropiada ha sido difícil”, concluyó un informe estatal de noviembre. Al menos una de cada 4 cartas enviadas a los beneficiarios fueron devueltas como “dirección equivocada”.

La ley que permite que los estados comiencen a cancelar la inscripción de los beneficiarios de Medicaid no elegibles el 1 de abril prohíbe que se cancele la inscripción de cualquier persona porque el correo se devolvió hasta que el estado haya hecho un “esfuerzo de buena fe” para comunicarse con la persona al menos de otra manera, como por teléfono o correo electrónico.

Para reducir la interrupción de la cobertura, la ley requiere que los estados cubran a los niños en Medicaid y CHIP por 12 meses más allá de los cambios en circunstancias, pero esa provisión no entra en vigencia por casi un año.  

Los estados le otorgarán a los beneficiarios 60 días para responder a los pedidos de información antes de sacarlos del programa, dijo Jack Rollins, director de política federal de la Association of Medicaid Directors.

Los estados usarán bases de datos del gobierno como las del IRS o la administración del seguro social para chequear la elegibilidad en base a los ingresos para que puedan renovar la cobertura de algunas personas automáticamente sin tener que contactarlos. Pero algunos estados no están aprovechando al máximo estas bases de datos.

Los estados tienen hasta febrero para enviar su plan de “retiro” de Medicaid a los CMS, que controlará el proceso. Lo que es claro hasta ahora es que algunos estadios están haciendo mucho más que otros para mantener a la gente con seguro.

Oregon planea permitir que los niños permanezcan en Medicaid hasta los 6 y permitirá a todos los demás hasta dos años de elegibilidad independientemente de los cambios en los ingresos y sin tener que volver a presentar una solicitud. Ningún otro estado ofrece más de un año de elegibilidad garantizada. También está creando un plan de salud subsidiado que cubriría a todo aquel que ya no califique pero tenga un ingreso annual por debajo del 200% del nivel federal e pobreza, es decir $29,000 para un individuo, dijeron oficiales. El programa tendrá beneficios similares a Medicaid a bajo costo o sin costo para los inscriptos.

Rhode Island pasará automáticamente a las personas que ya no sean elegibles para Medicaid, y con ingresos anuales por debajo del 200% de la tasa de pobreza, a un plan de ACA, y pagarán sus primeros dos meses de primas. Los funcionarios estatales esperan que el cambio sea fluido para muchos afiliados porque se cambiarán entre planes de salud administrados por la misma compañía.

California pasará a algunas personas a un plan privado subsidiado en el mercado estatal, Covered California. Los afiliados tendrán que estar de acuerdo y pagar una prima si no califican para un plan gratuito. Sin embargo, la prima podría ser tan baja como $10 al mes, dijo Jessica Altman, su directora ejecutiva. “Queremos que sea más fácil decir sí a la cobertura”, agregó.

Pero los expertos se preocupan por lo que sucederá con los beneficiarios de Medicaid en Florida.

Florida no tiene su propio mercado de ACA. Como en la mayoría de los estados, sus residentes usan el sitio federal para comprar estos planes. Como resultado, la transferencia de personas de Medicaid al mercado puede no ser tan eficiente como lo sería si involucrara a dos agencias estatales que trabajan juntas regularmente, dijo Jodi Ray, directora de Florida Covering Kids and Families, una organización sin fines de lucro que ayuda a las personas a encontrar cobertura.

Otra preocupación para los defensores es que Florida utiliza menos las bases de datos del gobierno que otros estados para verificar los ingresos de los afiliados. “Hacemos que todos pasen por el mismo proceso para volver a inscribirse en lugar de utilizar todos los datos aceptables”, dijo Ray.

Florida generalmente tarda semanas en procesar las solicitudes de Medicaid, mientras que algunos estados lo hacen en un día, dijo.

El plan de retiro de Medicaid de Florida ilustra la dificultad de llegar a los beneficiarios. El plan dijo que, desde 2020, el estado ha identificado 850,000 casos en los que los beneficiarios de Medicaid no respondieron a las solicitudes de información.

Los funcionarios de Medicaid en Florida no respondieron a los pedidos de comentarios.

Mientras los funcionarios estatales se esfuerzan por manejar el retiro, los proveedores de atención médica se preparan para las consecuencias.

Dennis Sulser, director ejecutivo de Youth Dynamics, con sede en Billings, Montana, que brinda servicios de salud mental a muchos niños con Medicaid, espera que algunos pierdan la cobertura porque perderse en el proceso.

Eso podría dejar a los pacientes sin poder pagar y a la organización sin fines de lucro esforzándose financieramente para tratar de evitar que los niños enfrenten una interrupción en el tratamiento.

“Si tuviéramos que dar de alta a un niño que está en nuestro hogar de cuidado grupal, y solo está a la mitad del proceso, y no tiene todos los fundamentos del apoyo de atención necesario, eso podría ser trágico”, dijo Sulser.

Los corresponsales de KHN Daniel Chang en Florida; Angela Hart en California; Katheryn Houghton en Montana; Bram Sable-Smith en Missouri; y Sam Whitehead en Georgia, colaboraron con esta historia.

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Phil Galewitz, Kaiser Health News

States are preparing to remove millions of people from Medicaid as protections put in place early in the covid-19 pandemic expire.

The upheaval, which begins in April, will put millions of low-income Americans at risk of losing health coverage, threatening their access to care and potentially exposing them to large medical bills.

It will also put pressure on the finances of hospitals, doctors, and others relying on payments from Medicaid, a state-federal program that covers lower-income people and people with disabilities.

Almost three years ago, as covid sent the economy into free fall, the federal government agreed to send billions of dollars in extra Medicaid funding to states on the condition that they stop dropping people from their rolls.

But legislation enacted in December will be phasing out that money over the next year and calls for states to resume cutting off from Medicaid people who no longer qualify.

Now, states face steep challenges: making sure they don’t disenroll people who are still entitled to Medicaid and connecting the rest to other sources of coverage.

Even before the pandemic, states struggled to stay in contact with Medicaid recipients, who in some cases lack a stable address or internet service, do not speak English, or don’t prioritize health insurance over more pressing needs.

“We have no illusion that this will be beautiful or graceful, but we will be doing everything we can not to lose anyone in the process,” Dana Hittle, Oregon’s interim Medicaid director, said of the so-called Medicaid unwinding.

With the rate of uninsured Americans at an all-time low, 8%, the course reversal will be painful.

The Biden administration has predicted that 15 million people — 17% of enrollees — will lose coverage through Medicaid or CHIP, the closely related Children’s Health Insurance Program, as the programs return to normal operations. While many of the 15 million will fall off because they no longer qualify, nearly half will be dropped for procedural reasons, such as failing to respond to requests for updated personal information, a federal report said.

Certain states may be hit particularly hard: Nevada’s enrollment in Medicaid and CHIP has risen 47% since February 2020. Many signed up toward the start of the pandemic, when the state’s unemployment rate spiked to nearly 30%.

Ordinarily, people move in and out of Medicaid all the time. States, which have significant flexibility in how they run their Medicaid programs, typically experience significant “churn” as people’s incomes change and they gain or lose eligibility.

The unwinding will play out over more than a year.

People who lose Medicaid coverage — in the more than 30 states covered by the federal marketplace — will have until July 31, 2024, to sign up for ACA coverage, CMS announced on Jan. 27. It’s unclear whether the state-based marketplaces will offer the same extended open-enrollment period.

Even states that are taking far-reaching action to make sure people don’t end up uninsured worry the transition will be rough.

In California alone, the state government forecasts that at least 2 million people out of 15 million in the program today will lose Medicaid coverage because of loss of eligibility or failure to reenroll.

“We acknowledge that this is going to be a bumpy road,” California Health and Human Services Secretary Mark Ghaly said. “We’re doing all we can to be prepared.”

In an all-hands-on-deck effort, states are enlisting Medicaid health plans, doctors, hospitals, state insurance marketplaces, and an assortment of nonprofit groups, including schools and churches, to reach out to people at risk of losing coverage.

States will also use social media, television, radio, and billboards, as well as websites and mobile phone apps, to connect with enrollees. That’s in addition to letters and emails.

Nevada has developed a mobile app to communicate with members, but only 15,000 of its 900,000 Medicaid enrollees have signed up so far.

“[T]he transient nature of Nevada’s population means that maintaining proper contact information has been difficult,” a state report said in November. At least 1 in 4 letters sent to enrollees were returned on account of a wrong address.

The law that allows states to begin disenrolling ineligible Medicaid recipients on April 1 bars states from disenrolling anyone because mail was returned as undeliverable until the state has made a “good faith effort” to contact the person at least one other way, such as by phone or email.

To further reduce disruption, the law requires states to cover children in Medicaid and CHIP for 12 months regardless of changes in circumstances, but that provision doesn’t take effect for almost a year.

States will give Medicaid recipients at least 60 days to respond to requests for information before dropping them, said Jack Rollins, director of federal policy at the National Association of Medicaid Directors.

States will use government databases such as those from the IRS and Social Security Administration to check enrollees’ income eligibility so they can renew some people’s coverage automatically without having to contact them. But some states aren’t taking full advantage of the databases.

States have until February to submit their unwinding plans to the federal Centers for Medicare & Medicaid Services, which will monitor the process.

But it is already clear that some states are doing much more than others to keep people insured.

Oregon plans to allow children to stay on Medicaid until age 6 and allow everyone else up to two years of eligibility regardless of changes in income and without having to reapply. No other state provides more than one year of guaranteed eligibility.

Oregon is also creating a subsidized health plan that would cover anyone who no longer qualifies for Medicaid but has an annual income below 200% of the federal poverty level, which amounts to about $29,000 for an individual, state officials said. The program will have benefits similar to Medicaid’s at little or no cost to enrollees.

Rhode Island will automatically move people who are no longer eligible for Medicaid — and with annual incomes below 200% of the poverty rate — into an Affordable Care Act plan and pay their first two months of premiums. State officials hope the shift will be seamless for many enrollees because they’ll be moving between health plans run by the same company.

California will move some people to a subsidized private plan on the state’s marketplace, Covered California. Enrollees will have to agree and pay a premium if they don’t qualify for a free plan. However, the premium could be as low as $10 a month, said Jessica Altman, executive director of Covered California. (Altman’s father, Drew Altman, is president and CEO of KFF. KHN is an editorially independent program of KFF.)

“We want to make it easier to say yes to coverage,” Altman said.

But experts worry about what will become of Florida Medicaid enrollees.

Florida doesn’t have its own ACA marketplace. As in most states, its residents use the federal exchange to shop for ACA plans. As a result, the handoff of people from Medicaid to marketplace may not be as efficient as it would be if it involved two state agencies that regularly work together, said Jodi Ray, director of Florida Covering Kids and Families, a nonprofit that helps people find coverage.

Another concern for advocates is that Florida makes less use of government databases than other states to check enrollees’ incomes. “We make everyone jump through hoops to get reenrolled instead of utilizing all the acceptable data,” Ray said.

Florida typically takes weeks to process Medicaid applications, while some states do it in a day, she said.

Florida’s unwinding plan illustrates the difficulty of reaching enrollees. The plan said that, since 2020, the state has identified 850,000 cases in which Medicaid recipients did not respond to requests for information.

Florida Medicaid officials did not return calls for comment.

While state officials struggle to manage the unwinding, health care providers are bracing for the fallout.

Dennis Sulser, chief executive of Billings, Montana-based Youth Dynamics, which provides mental health services to many children on Medicaid, expects some will lose coverage because they get lost in the process.

That could leave patients unable to pay and the nonprofit financially stretching to try to avoid children facing an interruption in treatment.

“If we had to discharge a child who is in our group home care, and they’re only halfway through it and don’t have all of the fundamentals of the care support needed, that could be tragic,” Sulser said.

KHN correspondents Daniel Chang in Hollywood, Florida; Angela Hart in Sacramento, California; Katheryn Houghton in Missoula, Montana; Bram Sable-Smith in St. Louis; and Sam Whitehead in Atlanta contributed to this report.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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After the nursing home where Leann Sample worked was bought by private investors, it started falling apart. Literally.

Part of a ceiling collapsed on a nurse, the air conditioning conked out regularly, and a toilet once burst on Sample while she was helping a resident in the bathroom, she recalled in a court deposition.

“It’s a disgusting place,” Sample, a nurse aide, testified in 2021.

The decrepit conditions Sample described weren’t due to a lack of money. Over seven years, The Villages of Orleans Health & Rehabilitation Center, located in western New York near Lake Ontario, paid nearly $16 million in rent to its landlord — a company that was owned by the same investors who owned the nursing home, court records show. From those coffers, the owners paid themselves and family members nearly $10 million, while residents injured themselves falling, developed bedsores, missed medications, and stewed in their urine and feces because of a shortage of aides, New York authorities allege.

At the height of the pandemic, lavish payments flowed into real estate, management, and staffing companies financially linked to nursing home owners throughout New York, which requires facilities to file the nation’s most detailed financial reports. Nearly half the state’s 600-plus nursing homes hired companies run or controlled by their owners, frequently paying them well above the cost of services, a KHN analysis found, while the federal government was giving the facilities hundreds of millions in fiscal relief.

In 2020, these affiliated corporations collectively amassed profits of $269 million, yielding average margins of 27%, while the nursing homes that hired them were strained by staff shortages, harrowing injuries, and mounting covid deaths, state records reveal.

“Even during the worst year of New York’s pandemic, when homes were desperately short of staffing and their residents were dying by the thousands, some owners managed to come out millions of dollars ahead,” said Bill Hammond, a senior fellow at the Empire Center for Public Policy, a think tank in Albany, New York.

Some nursing home owners moved money from their facilities through corporate arrangements that are widespread, and legal, in every state. Nationally, nearly 9,000 for-profit nursing homes — the majority — outsource crucial services such as nursing staff, management, and medical supplies to affiliated corporations, known as “related parties,” that their owners own, invest in, or control, federal records show. Many homes don’t even own their buildings but rent them from a related company. Homes pay related parties more than $12 billion a year, but federal regulators do not make them reveal how much they charge above the cost of services, and how much money ends up in owners’ bank accounts.

In some instances, draining nursing home coffers through related parties may amount to fraud: Along with The Villages’ investors, a handful of other New York owners are facing lawsuits from Attorney General Letitia James that claim they pocketed millions from their enterprises that the authorities say should have been used for patient care.

Deciphering these financial practices is timely because the Centers for Medicare & Medicaid Services is weighing what kind of stringent staffing levels it may mandate, potentially the biggest change to the industry in decades. A proposal due this spring is sure to spark debate about what homes can additionally afford to spend versus what changes would require greater government support. Federal Medicaid experts warned in January that related-party transactions “may artificially inflate” the true cost of nursing home care in reports that facilities file to the government. And the U.S. Department of Health and Human Services’ inspector general is investigating whether homes properly report related-party costs.

‘A Dog Would Get Better Care’

Beth Martino, a spokesperson for the American Health Care Association, said there is no evidence that related companies charge more than independent contractors do for the same services. “The real story is that nursing homes are struggling right now — to recruit and retain caregivers and to keep their doors open,” Martino said.

Lawyers for The Villages and its investors have asked the judge in the case for a delay until April to respond to the allegations of fraud and resident neglect in the lawsuit that the attorney general filed last November. One of the lawyers, Cornelius Murray, said in court papers that many allegations of short-staffing occurred during the pandemic when workers were out sick and the facility was required to accept any patient with covid-19. Lawyers declined to discuss the case with KHN.

In a deposition for that case, Ephram “Mordy” Lahasky, one of Fulton’s owners, disputed that he and fellow investors improperly depleted The Villages’ resources to the detriment of residents.

“I can assure you there was a lot of money left in the facility to make sure that it was not running on a shoestring budget,” he testified. The Villages, Lahasky said, was a “beautiful facility” with “beautiful gardens” where “residents look great” and employee morale was strong.

That wasn’t the opinion of Margarette Volkmar. She said in an affidavit filed with the state lawsuit that her husband was left in his bed with only a diaper on, was bruised by a fall, choked by another resident, given the wrong medication doses, dressed in other residents’ clothes, and covered in unexplainable bruises. After she moved him to another home, he gained back the 60 pounds he had lost and never fell at the new facility, she testified.

“I wouldn’t put a dog in Villages,” she said. “A dog would get better care than he did.”

Owners Invested in Hundreds of Homes

Both The Villages and its related real estate corporation, Telegraph Realty, were controlled by the same trio of investors, although they arranged for the nursing home to be listed in regulatory filings as solely owned by a silent partner and did not disclose their co-ownership of The Villages, court records show. One co-owner, David Gast, disclosed his net worth was $22 million and revealed that he had shares in more than 100 nursing homes, according to a loan application included in court records. Lahasky, whose disclosed net worth was nearly $73 million, said in a deposition he was the biggest nursing home proprietor in Pennsylvania and owned one of New York’s largest ambulance companies.

A third co-owner, Sam Halper, who reported a net worth of about $23 million, is under federal criminal indictment in Pennsylvania on charges of submitting false reports to the government about staffing and patient health at two nursing homes. He has pleaded not guilty. Added together, all the investors in corporations tied to The Villages have stakes or official roles in 275 other facilities across 28 states, federal records show.

The lease that The Villages had with Telegraph Realty required the home to pay up to $1 million in profits on top of the costs of debts and $50,000 a month for rent, according to a copy filed with the lawsuit. The attorney general alleged that, over seven years, the owners gave themselves and other investors more than $18 million from outsized rent profits, management fees, and proceeds from refinancing the property, an act that saddled The Villages with higher debt.

Lindsay Heckler, a supervising attorney at Center for Elder Law & Justice in Buffalo, which provides free legal help to older, disabled, and low-income adults, said she is concerned other nursing home owners in the state fail to provide quality care after purchasing facilities.

“When you see quality of care decline after an ownership change, the question needs to be asked: What’s going on with the finances?” she said.

Inflated Rents and a Plea to Die

Separating a nursing home operation and its building into two corporations is a common practice around the country. In New York, for-profit nursing homes with related-party realty companies spent 19% more of their operating revenue toward rent in 2020 than did for-profits that leased from unaffiliated firms, KHN found.

Fulton Commons Care Center, a nursing home on Long Island, spent nearly a third of its 2020 revenue on rent, a higher portion than all but three other facilities in New York, financial records show. In a lawsuit filed in December, the attorney general charged that the rent paid to Fulton Commons Realty, the company that owned its East Meadow, New York, building, was grossly inflated. Both the home and real estate company were owned by Moshe Kalter and his extended family, according to documents filed with the lawsuit.

In 2020, the nursing home paid nearly $10 million in rent to Fulton Realty, but an auditor for the attorney general calculated the property expenses that year were less than $6 million. The owners of Fulton and their families gave themselves nearly $16 million over four years from inflated rent, substantial management fees, and “no-show” jobs for Kalter’s eight children, the attorney general alleged.

“Rather than honor their legal duty to ensure the highest possible quality of life for the residents in their care, the Fulton Commons owners allegedly maintained insufficient staffing so they could take more money for their own personal gain,” James said in a statement.

Raul Tabora Jr. and David Yaffe, lawyers for Kalter, called the lawsuit’s charges “one-sided” in a written statement to KHN. They said that the payments to the children were not for jobs but because they were shareholders, and that Fulton kept an average balance of $3 million on hand to cover any pressing needs. “The evidence will demonstrate that any time resources are needed, they are provided by Mr. Kalter,” the lawyers wrote.

Residents’ families told investigators that staff shortages existed well before the pandemic. In an affidavit filed with the lawsuit, Frank Hoerauf Jr. said workers left his father sitting in adult diapers without pants and let his hair grow so long it covered his eyes. Another time, they left him screaming in pain from a urinary tract infection, he said.

“Fulton Commons seems like it was operated to be a cash machine for the owners where the care and the quality of life for residents there was very poor,” Hoerauf said.

Another resident, Elena Milack, who had lost one foot to diabetes, complained about poor care for years, including having to ring the call bell for an hour to get help to get to the bathroom, according to an affidavit filed by her daughter-in-law and health proxy. “GET ME OUT OF HERE OR TELL ME WHAT I CAN TAKE TO KILL MYSELF,” she texted her son in summer 2019. In 2020, she contracted an infection that turned her remaining foot black.

“Toes are all infected now,” Milack, a retired law school secretary, texted. “[M]y upper foot is dying and will soon fall off. I am hoping the good Lord will take me before that happens.” She died in November 2020.

Kalter said in a deposition he had never stepped inside his nursing home and did not supervise the quality of the care. He testified he granted full authority over the facility to its administrator and relied on his nephew, who was the controller of the home, to interact with the home’s leadership, according to court records.

In his deposition, Kalter said: “I have no personal knowledge of anything that’s going on in the nursing home.”

According to an affidavit from an auditor for the attorney general’s office, over the course of four years, Kalter deposited nearly $12 million from Fulton into his joint bank account with his wife, Frady.

KHN data editor Holly K. Hacker contributed to this report.

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When the covid-19 pandemic hit, Dr. Corey Siegel was more prepared than most of his peers.

Half of Siegel’s patients — many with private insurance and Medicaid — were already using telehealth, logging onto appointments through phones or computers. “You get to meet their family members; you get to meet their pets,” Siegel said. “You see more into their lives than you do when they come to you.”

Siegel’s Medicare patients weren’t covered for telehealth visits until the pandemic drove Congress and regulators to temporarily pay for remote medical treatment just as they would in-person care.

Siegel, section chief for gastroenterology and hepatology at Dartmouth-Hitchcock Medical Center, is licensed in three states and many of his Medicare patients were frequently driving two to three hours round trip for appointments, “which isn’t a small feat,” he said.

The $1.7 trillion spending package Congress passed in December included a two-year extension of key telehealth provisions, such as coverage for Medicare beneficiaries to have phone or video medical appointments at home. But it also signaled political reluctance to make the payment changes permanent, requiring federal regulators to study how Medicare enrollees use telehealth.

The federal extension “basically just kicked the can down the road for two years,” said Julia Harris, associate director for the health program at the D.C.-based Bipartisan Policy Center think tank. At issue are questions about the value and cost of telehealth, who will benefit from its use, and whether audio and video appointments should continue to be reimbursed at the same rate as face-to-face care.

Before the pandemic, Medicare paid for only narrow uses of remote medicine, such as emergency stroke care provided at hospitals. Medicare also covered telehealth for patients in rural areas but not in their homes — patients were required to travel to a designated site such as a hospital or doctor’s office.

But the pandemic brought a “seismic change in perception” and telehealth “became a household term,” said Kyle Zebley, senior vice president of public policy at the American Telemedicine Association.

The omnibus bill’s provisions include: paying for audio-only and home care; allowing for a variety of doctors and others, such as occupational therapists, to use telehealth; delaying in-person requirements for mental health patients; and continuing existing telehealth services for federally qualified health clinics and rural health clinics.

Telehealth use among Medicare beneficiaries grew from less than 1% before the pandemic to more than 32% in April 2020. By July 2021, the use of remote appointments retreated somewhat, settling at 13% to 17% of claims submitted, according to a fee-for-service claims analysis by McKinsey & Co.

Fears over potential fraud and the cost of expanding telehealth have made politicians hesitant, said Josh LaRosa, vice president at the Wynne Health Group, which focuses on payment and care delivery reform. The report required in the omnibus package “is really going to help to provide more clarity,” LaRosa said.

In a 2021 report, the Government Accountability Office warned that using telehealth could increase spending in Medicare and Medicaid, and historically the Congressional Budget Office has said telehealth could make it easier for people to use more health care, which would lead to more spending.

Advocates like Zebley counter that remote care doesn’t necessarily cost more. “If the priority is preventative care and expanding access, that should be taken into account when considering costs,” Zebley said, explaining that increased use of preventative care could drive down more expensive spending.

Siegel and his colleagues at Dartmouth see remote care as a tool for helping chronically ill patients receive ongoing care and preventing expensive emergency episodes. It “allows patients to not be burdened by their illnesses,” he said. “It’s critical that we keep this going.”

Some of Seigel’s work is funded by The Leona M. and Harry B. Helmsley Charitable Trust. (The Helmsley Charitable Trust also contributes to KHN.)

For the past nine months, Dartmouth Health’s telehealth visits plateaued at more than 500 per day. That’s 10% to 15% of all outpatient visits, said Katelyn Darling, director of operations for Dartmouth’s virtual care center.

“Patients like it and they want to continue doing it,” Darling said, adding that doctors — especially psychologists — like telehealth too. If Congress decides not to continue funding for remote at-home visits after 2024, Darling said, she fears patients will have to drive again for appointments that could have been handled remotely.

The same fears are worrying leaders at Sanford Health, which provides services across the Upper Midwest.

“We absolutely need those provisions to become permanent,” said Brad Schipper, president of virtual care at Sanford, which has health plan members, hospitals, clinics, and other facilities in the Dakotas, Iowa, and Minnesota. In addition to the provisions, Sanford is closely watching whether physicians will continue to get paid for providing care across state lines.

During the pandemic, licensing requirements in states were often relaxed to enable doctors to practice in other states and many of those requirements are set to expire at the end of the public health emergency.

Licensing requirements were not addressed in the omnibus, and to ensure telehealth access, states need to allow physicians to treat patients across state lines, said Dr. Jeremy Cauwels, Sanford Health’s chief physician. This has been particularly important in providing mental health care, he said; virtual visits now account for about 20% of Sanford’s appointments.

Sanford is based in Sioux Falls, South Dakota, and Cauwels recalled one case in which a patient lived four hours from the closest child-adolescent psychiatrist and was “on the wrong side of the border.” Because of the current licensing waivers, Cauwels said, the patient’s wait for an appointment was cut from several weeks to six days.

“We were able to get that kid seen without Mom taking a day off to drive back and forth, without a six-week delay, and we were able to do all the things virtually for that family,” Cauwels said.

Psychiatrist Dr. Sara Gibson has used telehealth for decades in rural Apache County, Arizona. “There are some people who have no access to care without telehealth,” she said. “That has to be added into the equation.”

Gibson, who is also medical director for Little Colorado Behavioral Health Centers in Arizona, said one key question for policymakers as they look ahead is not whether telehealth is better than face-to-face. It’s “telehealth vs. no care,” she said.

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Mother-to-be Kathleen Founds made a routine doctor’s appointment to discuss the risks of antidepressants in pregnancy. After the visit, Founds, who relies on medication to quell the manic highs and despondent lows of bipolar disorder, learned the physician was out of network.

She received a surprise bill for $650, launching her into a maze of claim forms and hours on the phone being routed from one office to the next to dispute the charges — insurance red tape that so many Americans have encountered. A decade later, Founds captured her experience in a graphic novel, “Bipolar Bear and the Terrible, Horrible, No Good, Very Bad Health Insurance,” a richly illustrated, darkly funny fable for adults about the country’s dysfunctional health system.

The book, published in November, follows Theodore, an intelligent but angst-ridden bear, on his quest for treatment for his own manic-depressive illness. But first he must navigate the demands of the WeCare company, a shady outfit run by cigar-smoking felines who profit unfairly from a lopsided economy and a corrupt justice system, among other things. His fellow outcasts include such characters as an overeducated owl drowning in student debt and a bomb-sniffing puppy suffering from PTSD.

America is internationally known for high-quality care, for those who can afford it. A new Gallup Poll shows that a record-high proportion of Americans — 38% — postponed medical care because of high costs in 2022. Federal and state “no surprise” laws of the past few years seek to protect consumers from unexpected medical bills. But they don’t prevent expenses like high deductibles or fees hidden in the fine print of their insurance policies.

“Bipolar Bear” joins other recent works to shine a light on health inequities — part of the emerging genre of graphic medicine. It includes seminal illness narratives such as “Mom’s Cancer” by Brian Fies and nurse MK Czerwiek’s “Taking Turns: Stories from the HIV/AIDS Care Unit 371” as well as “Rx,” Rachel Lindsay’s memoirs about taking a job at a pharmaceutical company to secure insurance to cover treatment for bipolar disorder.

Descended from the underground comics of the 1960s, graphic medicine has grown into a new field of scholarship on the medium’s role in the study and delivery of health care, said Ian Williams, the Welsh physician who coined the term back in 2007. “It’s ideal for exploring subjects having to do with one’s life and well-being in an ironic and funny way,” he said.

As Founds puts it, humor is a powerful weapon against despair.

The 40-year-old mother of two teaches English at a community college in Santa Cruz County on California’s central coast. She has never taken an art class and didn’t set out to write a graphic novel. The book began as a doodle in the margins of her notebook while studying for a master’s degree in fiction writing at Syracuse University in New York. Her 2014 novel in short stories, “When Mystical Creatures Attack,” is about a teacher who suffers a nervous breakdown and communicates with her students from a psychiatric hospital.

KHN contributing reporter Rachel Scheier spoke to Founds about bringing Theodore to life. The interview has been edited for length and clarity.

Q: How did you come to write a book about a bear with bipolar disorder?

I’d been making children’s books for my little brother. They were all about angst-ridden animals: a lonely giant squid, a possum with social anxiety disorder who falls asleep whenever he’s in an awkward situation, a burro who wants to be a unicorn. My goal was to write a novel. But whenever I was too depressed to string a sentence together, I’d draw bears. Then I realized that anyone dealing with a mental health issue in this country is going to have to deal with the labyrinth of health insurance. And I thought it would be fun to depict it as an actual labyrinth with trapdoors and man-eating flowers. Once I went in that direction, it was no longer a children’s book.

Q: Was the book based on your own experience with mental illness?

Yes. I had my first major depressive episode at the end of high school, but I didn’t seek out professional help. I just sort of muddled through it. Then, when I was a sophomore at Stanford, I had my first manic episode. I had a series of realizations about the nature of the universe, and I didn’t sleep or eat very much. Then, in graduate school, I went to a clinic because I was going through a depression, and the psychiatrist asked me questions like “Was there ever a time when you had a lot of energy and didn’t feel a need to sleep?” And I said, “Oh, sure, but that was a spiritual awakening.” So, I had to reframe my life story a bit after that.

Q: But religion still has a role in your life?

I’m a Quaker. It’s something I came to through my interest in nonviolent social change. When I am severely depressed, I feel like life has no purpose. So, following a code that says life does have meaning, that we are all connected by a force of love that undergirds the universe, is something that has helped me a lot.

Q: Why animals?

People are hard to draw! Cartoon animals are a lot easier. I wasn’t interested in art in school — actually, when I started drawing was during that first manic episode. I do not recommend writing a 200-page graphic novel with no artistic training. I mean, it took 13 years, but I did finish it.

Q: Why did it take so long?

I worked on it off and on while I was writing essays and working on the beginnings of several other novels. When I finally finished it, I was so excited. I was ready to see it on bookshelves within a year. I sent it to my agent, and she wrote me a very nice email which said, “I love this. It’s very creative. But there’s no way I can sell it.” Most graphic novels for grownups are memoir — there wasn’t a clear genre. Then another agent I reached out to said, “I can’t take this on, but you should try Graphic Mundi, which had published several novels in the field of graphic medicine.”

Q: What made you want to write about health insurance?

Our system is actually killing people. We have a high suicide rate in this country, and people are not able to access mental health care. And then, when they do get help, it’s not necessarily the psychiatrist who determines the course of care; it’s the insurance company. If you go into a room of 10 Americans, five can tell you a health insurance nightmare story.

But I also wanted to explore what it means to develop a healthy lifestyle and grow a strong community and go through all this growth and healing that Bipolar Bear goes through in the story, only to have the depression come back again. What is the meaning of my journey if I find myself right back where I was before? Ultimately, there’s no answer to that question, but there is a right thing to do, which is to ask for help. We’re all saved by each other.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

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Renuka Rayasam and Blake Farmer, Nashville Public Radio

Near the end of his scheduled three-month stay at a rehab center outside Austin, Texas, Daniel McKegney was forced to tell his father in North Carolina that he needed more time and more money, he recently recalled.

His father had already received bills from BRC Recovery totaling about $150,000 to cover McKegney’s treatment for addiction to the powerful opioid fentanyl, according to insurance statements shared with KHN. But McKegney, 20, said he found the program “suffocating” and wasn’t happy with his care.

He was advised against the long-term use of Suboxone, a medication often recommended to treat opioid addiction, because BRC does not consider it a form of abstinence. After an initial five-day detox period last April, McKegney’s care plan mostly included a weekly therapy session and 12-step group meetings, which are free around the country.

McKegney said a BRC staffer recommended he stay a fourth month and even sat in on the call to his dad.

“They used my life and [my] father’s love for me to pull another 20 grand out of him,” said McKegney, who told KHN he began using fentanyl again after the costly stay.

BRC did not respond to specific concerns raised by McKegney. But in an emailed statement, Mandy Baker, president and chief clinical officer of BRC Healthcare, said that many of the complaints patients and former employees shared with KHN are “no longer accurate” or were related to covid safety measures.

But addiction researchers and private equity watchdogs said models like the one used by BRC — charging high patient fees without guaranteeing access to evidence-based care — are common throughout the country’s addiction treatment industry.

The model and growing demand are why addiction treatment has become increasingly attractive to private equity firms looking for big returns. And they’re banking on forecasts that predict the market will grow by $10 billion — doubling in size — by the end of the decade as drug overdose and alcohol-induced death rates mount.

“There is a lot of money to be made,” said Eileen O’Grady, research and campaign director at the Private Equity Stakeholder Project, a watchdog nonprofit that tracks private equity investment in health care, housing, and other industries. “But it’s not necessarily dovetailing with high-quality treatment.”

In 2021, 127 mergers and acquisitions took place in the behavioral health sector, which includes treatment for substance use disorders, a rebound after several years of decline, according to investment banking firm Capstone Partners. Private equity investment drove much of the activity in an industry that is highly fragmented and rapidly growing, and has historically had few guardrails to ensure patients get appropriate care.

Roughly 14,000 treatment centers dot the country. They’ve proliferated as addiction rates rise and as health insurance plans are required to offer better coverage of drug and alcohol treatment. The treatment options vary widely and are not always consistent with those recommended by the federal Substance Abuse and Mental Health Services Administration. While efforts to standardize treatment advance, industry critics say private equity groups are investing in centers with unproven practices and cutting services that, while unprofitable, might support long-term recovery.

Baker said BRC treats people who have been unsuccessful in other facilities and does so with input from both clients and their families.

Private Equity Skimps on the Known Standards

Centers that discourage or prohibit the use of Food and Drug Administration-approved medications for the treatment of substance use disorder are plentiful, but in doing so they do not align with the American Society of Addiction Medicine’s guidelines on how to manage opioid use disorder over the long term.

Suboxone, for example, combines the pain reliever buprenorphine and the opioid-reversal medication naloxone. The drug blocks an overdose while also reducing a patient’s cravings and withdrawal symptoms.

“It is inconceivable to me that an addiction treatment provider purporting to address opioid use disorder would not offer medications,” said Robert Lubran, a former federal official and chairman of the board at the Danya Institute, a nonprofit that supports states and treatment providers.

Residential inpatient facilities, where patients stay for weeks or months, have a role in addiction treatment but are often overused, said Brendan Saloner, an associate professor of health policy and management at Johns Hopkins Bloomberg School of Public Health.

Many patients return to drug and alcohol use after staying in inpatient settings, but studies show that the use of medications can decrease the relapse rate for certain addictions. McKegney said he now regularly takes Suboxone.

“The last three years of my life were hell,” he said.

Along with access to medications, high-quality addiction treatment usually requires long-term care, according to Shatterproof, a nonprofit focused on improving addiction treatment. And, ideally, treatment is customized to the patient. While the “Twelve Steps” program developed by Alcoholics Anonymous may help some patients, others might need different behavioral health therapies.

But, when looking for investments, private equity groups focus on profit, not necessarily how well the program is designed, said Laura Katz Olson, a political science professor at Lehigh University who wrote a book about private equity’s investment in American health care.

With health care companies, investors often cut services and trim staff costs by using fewer and less-trained workers, she said. Commonly, private equity companies buy “a place that does really excellent work, and then cut it down to bare bones,” Olson said. During his stay, McKegney said, outings to movies or a lake abruptly stopped, food went from poke bowls and pork tenderloin to chili that tasted like “dish soap,” and staff turnover was high.

Nearly three years ago, BRC landed backing from NewSpring Capital and Veronis Suhler Stevenson, two private equity firms with broad portfolios. Their holdings include a payroll processor, a bridal wear designer, and a doughnut franchise. With the fresh funds, BRC started an expansion push and bought several Tennessee treatment facilities.

NewSpring Capital and Veronis Suhler Stevenson did not respond to emails and phone calls from KHN.

High Prices and Low Overhead = Big Business

Before the sale to BRC, Nashville Recovery Center co-founder Ryan Cain said, roughly 80% of the center’s offerings were free. Anyone could drop by for 12-step meetings, to meet a sponsor, or just to play pool. But the new owners focused on a new high-end sober living program that cost thousands of dollars per month and relied on staffers who were in recovery themselves.

In 2021, Nanci Milam, 48, emptied her 401(k) retirement fund to go through the sober living program and tackle her alcohol addiction. She had been sober for only six months when she was hired as a house manager, overseeing some of the same residents she had gone through the program with. She had to handle other residents’ medications, which she said she could have abused. Milam said she was fortunate to maintain sobriety.

“I think it served their need. And I was ambitious. But it should not have happened,” said Milam, adding that she left because the company hadn’t helped her start her certification as a drug counselor as promised.

A licensing violation reported to Tennessee regulators in late 2021 involved a staffer who was later fired for having sex with a resident in a storage area. And KHN obtained a copy of a 911 call placed in August 2022 — after a resident drank half a bottle of mouthwash — during which a staffer admitted there was no nurse on-site, which some other states require.

Removing the Burden from Consumers

The regulations of treatment providers largely focus on health and safety rather than clinical guidelines. Only a handful of states, including New York and Massachusetts, require that licensed addiction treatment centers offer medication for opioid use disorder and follow other best practices.

“We have a huge issue in the field where licensing standards don’t comport with what we know to be the most effective quality-of-care standards,” said Michael Botticelli, former director of the Office of National Drug Control Policy during the Obama administration and a member of a clinical advisory board for private equity-backed Behavioral Health Group. Some organizations, including Shatterproof, guide patients toward appropriate care. The federal and state governments largely direct public funds to centers that meet clinical quality-of-care standards.

But access to treatment is limited, and desperate patients and their families often don’t know where to turn. State or federal regulators aren’t policing claims from rehab facilities, like the “99% success rate” touted by BRC.

“We cannot put the burden on patients and their families” to navigate the system, said Johns Hopkins’ Saloner. “My heart really breaks for people who have thrown thousands of their dollars at programs that are bogus.”

When her niece was ready for inpatient rehab in summer 2020, Marina said, sending her to BRC was a “knee-jerk reaction.” Marina, a physician in Southern California, requested to be identified only by her middle name to protect the privacy of her niece, who suffers from alcohol addiction.

She had researched the facility three years earlier but didn’t investigate deeper because she was worried her niece would change her mind. BRC advertised success stories on the television show “Dr. Phil” and posted affirmations on social media.

Marina agreed to BRC’s upfront cost of $30,000 a month for a three-month stay in Texas, which she paid for out-of-pocket because her niece lacked insurance. She allowed KHN to review some of her niece’s pharmacy and treatment bills.

Marina said she paid for a fourth month, but said ultimately the program didn’t help her niece, who remains “horribly sick.” She said her niece felt constant guilt and shame at rehab. Marina thought there was inadequate medical oversight, and said the program “nickeled and dimed” her for additional services, like physicians’ visits, that she thought would be included.

“It almost doesn’t matter if you are educated and intelligent,” Marina said. “When it’s your loved one, you are just desperate.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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