Howard County has reached a $3 million deal with a private company to build an inpatient drug treatment center there with beds reserved for county residents.
In what Howard officials say is a first-of-its-kind public-private partnership, the county will pay Delphi Behavioral Health Group $750,000 annually for four years to build a treatment center with shorter-term detoxification services and month-long residential treatment options. The money will be a grant awarded in the county’s operating budget, said Carl DeLorenzo, director of policy and programs for County Executive Calvin Ball.
In return, for the length of the deal Delphi will be required to admit an average of nine patients a month from Howard County, or 108 total residents for the year. And Delphi has agreed to make 35% of its beds available to people either on or eligible for public insurance — such as Medicaid or Medicare.
But a competitor is protesting the deal, arguing it should have had a chance to bid on the proposal. Officials with Owings Mills-based Amatus Health contend the county avoided bringing the project before the County Council and out to bid, which might have yielded a better deal.
The Howard treatment center would be the second in the state for Delphi, a relatively new addiction treatment provider founded in 2016 that has 15 facilities spread across the East Coast and California.
While Delphi has had to allocate beds for Medicaid-eligible patients at previous facilities — such as when it applied for state approval for a Linthicum facility called Maryland House Detox — Howard County officials say tying public funding to the requirement to treat county residents is a first in the state. The county has been discussing the idea since at least last year.
According to the state Department of Health, Delphi’s center would be the first in Howard County to offer either detoxification treatment or high-intensity residential services. Delphi has not selected a site for the center.
The county hopes the center will be completed within two years. Although the county just announced a 25.5% decrease in opioid overdoses in 2018 compared with 2017, officials stress that Howard is largely underserved for a county that has seen more than 200 opioid overdoses, fatal and non-fatal, in each of the past two years.
The Howard County agreement requires Delphi to admit a county resident to the new facility within 24 hours once they are referred for treatment.
David Stup, director of corporate business development for Delphi, said the grant would help with initial startup and building costs, but also offset lost revenue the center would incur when treating people on Medicaid.
“At the end of the day, the services that they’re prepaying for go to offset all of the costs associated with operating a facility, including the startup costs to get the door open,” Stup said. “We have come together and decided that we want to be able to see patients of all income levels in Howard County.”
But another addiction treatment provider said the county should have sought bids on the facility.
Mike Silverman, chief operating officer of Amatus Health, said his company was not aware the county was looking to partner with a private addiction treatment center. Amatus operates addiction treatment centers on the East Coast and in Ohio.
“As a provider that is local to the state and very capable of doing the same types of things … we 1000% would’ve been very open to the bidding process,” said Silverman, pointing to the fact that Amatus recently opened a facility in Hagerstown that exclusively serves Medicaid and Medicare patients.
Mike Gimbel, the former Baltimore County “drug czar” and now a consultant for Amatus, criticized county officials for not looking at more immediate options, such as tying the new facility to an existing vacant building.
“There are closed psychiatric hospitals in Howard County. The fact that we’re talking two years away is kind of silly,” Gimbel said.
DeLorenzo said the project was not subject to the typical bidding process because the county is awarding a grant to a private entity, not building a county-owned facility. Typically, the county would ask companies to bid on a proposal, the county council would review the plan and the public could comment before the county chose a winning bid.
DeLorenzo wrote in an email that the full grant agreement — including stipulations on repayment if Delphi backs out of the deal — would be finalized once the facility is built. Officials said part of the funding would be given to the center before the building is built to help with construction costs.
While the county has stipulated that it wants the center to serve nine Howard County residents a month, that figure would depend on outside agencies referring at least that many county residents. Delphi won’t be responsible for finding additional patients if it receives fewer than nine referrals.
Stup said it’s highly unlikely the proposed 60-bed facility would ever need to turn someone down in favor of a Howard County resident.
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“The nature of a facility this size means that beds open up. … You’re looking at 85 to 100 admissions per month across the board,” he said, just like at hospitals. “If somebody else calls, most likely we’re going to be able to admit them in a timely manner.
“And we’re all going to be flexible to meet the supply and demand,” he added.
There is a market for this. The demand has increased. To me, this is like the heart of the public-private partnership.
Carl DeLorenzo, director of policy and programs for Howard County Executive Calvin Ball
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As for the treatment center itself, few details have been determined other than the county as a funding source. Stup said neither a location nor a cost estimate has been finalized. And while county officials hope a new center can be completed in two years, there’s no deadline.
But county officials stress that this was an agreement years in the making that they believe will cater to Howard County’s needs.
“I wanted something that was innovative,” said Ball, the county executive, “that would ensure that we had a facility that would have a treatment level [capacity] that would reserve beds for our residents.”