State senator seeks to regulate 'recovery homes' in Md.

State Sen. Catherine E. Pugh said Friday that she is submitting legislation to create new state oversight of transitional housing for recovering drug and alcohol abusers.

Her bill would require owners of recovery homes, for the first time, to obtain certification from the state health department, and only individuals with at least a year of sobriety could manage the houses.

Pugh, a Baltimore Democrat, said the legislation is in response to a Baltimore Sun investigation of Baltimore Behavioral Health Inc., a nonprofit mental health clinic that has long offered patients a bed in an unregulated network of rowhouses that it rents.

BBH's houses have been managed by patients with as little as 60 days of sobriety. More than a dozen former patients and staff members described illicit drug use by patients at some of the houses spread around Southwest Baltimore.

The lack of state oversight "just didn't make sense," Pugh said, given that the state is spending large sums on treatment. "This is our money," she said.

Also Friday, Pugh finished drafting a related bill that would direct state health officials to develop guidelines for treating individuals diagnosed with both drug addiction and mental health problems.

Baltimore Behavioral Health specializes in such "co-occurring" cases and is among the area's largest providers of drug treatment. Former BBH patients and employees, as well as some outside doctors, have told The Sun that the clinic has been diagnosing mental illness — and collecting public funds to treat it — in some patients whose main affliction is drug addiction.

Reimbursement rates for mental health have historically been higher than those for drug treatment.

David Paulson, a spokesman for the Department of Health and Mental Hygiene, said the department "is going to carefully review these proposals and others as we move forward during this legislative session."

William "Kris" Hathaway, chief executive of BBH, could not be reached. The West Pratt Street clinic received about $17 million in state funds in fiscal 2009 and about $11 million last fiscal year.

State health officials have said the transitional housing offered by providers such as BBH falls outside state oversight because no health services occur there. While BBH chooses to offer subsidized housing to its patients, the government's Medicaid program pays only for the outpatient treatment that the clinic performs.

In BBH's case, the only oversight of the houses comes from the city and is limited to zoning and housing code compliance. Baltimore housing officials said last year that most houses leased to BBH were not properly registered.

The state certification process, which the provider would pay for through new fees, would help ensure the housing is suitable, Pugh said. One house rented by BBH had nine or 10 residents and just one bathroom, an arrangement she called "crazy."

After The Sun's investigation was published in November, Pugh expressed concern that BBH was letting newly sober patients serve as patient-managers, with duties that included unlocking a cabinet containing other patients' psychiatric medication. None of the houses in a network that once numbered more than 20 had professional staff.

Nancy Grimm, director of the state Office of Health Care Quality, told The Sun last year that the lack of oversight troubled her and said, "Maybe we should be licensing them."

Others have questioned putting newly sober patients in charge of the houses. Gaudenzia Inc., which offers mental health and addiction treatment services, requires even entry-level staff to document a year of sobriety.

Last month, the state health secretary, Dr. Joshua M. Sharfstein, laid out new oversight measures aimed at better policing taxpayer-funded drug treatment and mental health providers such as BBH.

Among the steps he presented to lawmakers in Annapolis: monitoring the federal tax filings of nonprofit providers to look for questionable executive salaries and scrutinizing the medical diagnoses of clinics whose billing patterns raise red flags.