Maryland health officials have denied a request for financial help from the leaders of Gaudenzia drug treatment centers. Now, the nonprofit is looking for other ways to keep its doors open in Crownsville and Baltimore.
Cut off from Medicaid reimbursements and federal and state funding, Gaudenzia is one of several residential treatment centers straining under large deficits caused by the coronavirus pandemic. It faces a $3.4 million loss in revenue driven by a drop in treatment referrals for incarcerated patients while courts were closed the spike of cases in the spring.
The Maryland Department of Health denied Gaudenzia’s request for direct financial relief Thursday in a letter saying it wouldn’t be fair to other facilities.
“Should Maryland choose winners and losers among the more than 2,200 behavioral health providers by subsidizing one provider, it will create perverse incentives for all providers,” state Health Secretary Robert Neall, a former Anne Arundel County executive, wrote.
“Any actions taken will be for the entire behavioral health system, as opposed to individual providers to ensure that potential actions reflect the needs of the entire system.”
The facility will keep trying for a solution, Gaudenzia CEO Dale Klatzker said.
“We continue to hear from many state and local officials that they appreciate and support Gaudenzia’s work,” Klatzker said. “Even though the health department advises that the approach we suggested will not work in Maryland, we are hopeful they will find a way to help us avoid the need to close any of our critical safety net programs.”
Gaudenzia is the largest treatment provider in a state-subsidized program for inmates struggling with addiction, running six treatment facilities with 200 beds between Anne Arundel County and Baltimore.
It served around 120 patients per day through the program in 2019. That rate dropped by 75% to about 30 people per day in September. Since court proceedings have resumed, patient volumes have increased slightly.
Since January, 717 overdoses have been recorded in Anne Arundel County. Of those, 124 people have died, a 12.7% increase in fatal overdoses from the comparable period a year earlier.
Statewide, Maryland recorded 1,187 opioid-related deaths from January to June, including heroin, prescription opioids, fentanyl and morphine. The most recent quarterly data is up by 9% compared to the same period last year and nearly on par with deaths seen in the same period in 2018, when Maryland recorded one of the country’s highest rates of death due to drug overdose, according to the CDC.
In his letter, Neall said the department had moved away from the grants-based funding model used early in the Hogan administration to respond to a sharp rise in the number of overdoses around the state.
He pointed out that the state had already paid Gaudenzia through August despite the decrease in referrals.
“A collateral benefit of these estimated payments is that many providers' revenue remained largely flat despite a decrease in patient volume during the most restrictive time in the pandemic. We believe that this MDH action has acted to provide financial stability for many providers,” he wrote.
Last week, the state set up a fund to award $50 million in grants for local treatment and recovery programs to combat substance use disorder. Gaudenzia said the company has applied for the relief, but the grant would be much lower than what the company has lost and continues to lose.
Neall wrote that he was confident the judicial system would resume court referrals for residential drug treatment and that his agency was exploring possible federal responses.
“We continue to look into our ability to provide support to the behavioral health provider community as this pandemic has affected most essential providers, including any federal flexibilities that may be available.”