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Hope House seeking merger with Reality Inc.

By Gwendolyn Glenn, gglenn@patuxent.com

5:36 PM EDT, July 19, 2011

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Officials with Anne Arundel County-based Hope House, a 41-bed substance abuse treatment facility in Crownsville, have signed a letter-of-intent to merge with Reality Inc. and take over the operations of the now-closed addiction treatment center on Main Street, in Laurel.

Reality's board of directors abruptly closed the 38-year-old facility April 29 afterPrince George's County Health Department officials earlier that day removed the substance-abuse clients they had referred there and canceled the county's $1.4-million contract with Reality over concerns about how the agency was being managed.

At the time of the controversial closure, Reality's board members said they were seeking a partner to merge with to reopen the facility, which included the county's only intensive, 28-day substance-abuse treatment program in its main building and a halfway house next door.

"When Reality closed and I heard that they wanted to merge with someone, I thought it would be a natural fit for us," said Peter DeSouza, executive director of the 26-year-old Hope House, which is located near Annapolis on the grounds of the former Crownsville Mental Hospital. "They're the same as us except we have a medical detoxification program. Some addicts go to hospitals for that and then go to a place like Reality, but they get detoxed here."

According to DeSouza, they are in the due diligence phase of the process to determine if a merger agreement can be worked out.

"We met at Reality last week with their board members. We're looking to see if it is worthwhile for us and checking to see if Reality's assets are greater than its liabilities," DeSouza said. "I'm trying to step up the due diligence process because the longer an organization stays closed, the harder it is to reopen."

County reluctant on contracts

County Health Department officials, however, are reluctant to reinstate the county's contract with Reality, which is a big stumbling block to reopening Reality as Hope House.

"They have said no at this point, but I hope to convince them otherwise because Reality depended almost 100 percent on the county (for clients)," De Souza said.

John Irvine, Reality's accountant who is spearheading the group's reorganization, said county officials told him also that the contract would not be reinstated this year. Irvine was appointed acting director when Reality director Scott Graham was placed on administrative leave shortly before the agency was closed.

"It makes no sense to me and is very disappointing that once we get staffed and reopen strong, they won't use us," Irvine said. "We get calls daily of people needing help and … they have to get referred outside the county. The county is spending county dollars outside the county when there will be an option inside the county," he said.

Candace Cason, manager of the Health Department's division of addictions and mental health, said clients removed from Reality are being treated currently at substance abuse facilities in St. Mary's and Calvert counties.

"We can't stop the contracts of those providers," Cason said. "We're going by county rules and there's no way we can send new clients to them (Reality)."

The funds awarded in contracts the Health Department approves for substance abuse agencies pay for the treatment of those who cannot afford to pay for their care. County officials are currently in the process of accepting new applications from substance abuse facilities interested in having clients referred to them by the county for contracts that will kick in January 2012.

"We hope Reality and Hope House will submit a strong application. These next few months will give them time to get their ducks in a row and develop a plan that includes new treatments available now for substance abuse," Cason said. "Many clients have mental health disorders and the federal government is moving toward merging the treatments where the mental issues are addressed, which is a big change for Reality and other residential treatment programs that started in the 1970s and haven't operated this way."

Irvine said Reality officials realize that they will need a new business model that reflects regulatory and treatment changes and are considering not only admitting those who the county pays for, but also clients who can afford to pay and those with insurance coverage.

If the merger goes through with Hope House and the county sticks to its rules of not awarding new contracts until January, Irvine said, "We have ideas of where our clients will come from because, given our location, we're in a great place to take clients from Howard, Anne Arundel, Montgomery (counties) and D.C."

Reviving Reality

Prior to ending its contract with Reality at the end of April, county officials suspended it for a two-week period in late March and informed the agency's board at that time that they were concerned about state regulations not being adhered to and Reality's leadership.

Irvine, whose qualifications to run Reality were questioned by county officials and some staff members when he was appointed acting director, has not said if he will remain at the agency when it reopens.

According to Cason, county officials have made it clear that there "needs to be a separation of duties between (administrative) managers and those who run the day-to-day treatment programs. They need to be in compliance and I hope their application will reflect that they plan to operate within regulations."

DeSouza said if the merger goes through, the Main Street facility would be staffed with some Hope House employees, former Reality staffers and new hires. He was noncommittal as to Irvine's future with the agency.

"It's not my call. We will have one board and that will depend on my board's decision. He (Irvine) will definitely not be the CEO because he does not have the qualifications," DeSouza said.

Which was good news to Elyssa Spangler, a former case manager at Reality who left when Irvine became acting director and blames him for many of the issues that led to Reality's closure. Although Spangler does not want to return to the agency, she hopes it will reopen.

"I wish it the best because the county needs an agency like Reality," Spangler said. "There were a lot of wonderful staff people at Reality and many of them still need work, so I hope they bring them back and that there's a complete change from the top."

Sidney Hill, a 53-year-old Army veteran, was in the middle of treatment at Reality's halfway house when the agency closed. He was placed in a substance abuse program in Beltsville, but was dissatisfied with it and is now receiving treatment and medical benefits in a program for veterans in Perryville.

"I'm on a large campus where I'm getting the therapy, dental and medical treatment I need, so I'm doing great," Hill said. "But I do stay in touch with the only case manager that's still in the office at Reality because I hope Reality opens back up so others can get help. I've been praying for them to open up and it looks like it's going to happen."

In addition to giving Hope House a presence inPrince George's County, DeSouza wants to reopen Reality so it can continue to help those such as Hill.

"I want to preserve Reality's legacy and keep it alive. It's a shame it had to close but I hope to revive it and put it back on its feet," he said. "When we take over, we need to show we're in compliance with state regulations and hopefully the county will be willing to do business with us."