Treatment Program Under Fire Critics Describe Chaos At Firm Helping Drug Addicts

The complaints began almost immediately, and they haven’t stopped.

For the more than two years that American Behavioral Health Services has been treating the state’s poorest drug and alcohol addicts, staffers and patients have consistently described chaos at the company’s two Spokane treatment centers.

Patients going weeks without treatment. Recovering addicts dipping their hands into baggies of addictive drugs, then going to group therapy stoned. A loaded heroin needle found in a toothbrush holder, and beers chilling in toilet tanks. Money from patient accounts transferred to cover payroll.

ABHS faces more complaints than any other state-funded treatment facility in Washington, including 10 in the last 10 months alone. State regulators have recently launched investigations that could shut the clinics down.

On Thursday, the Department of Health moved to revoke the for-profit corporation’s license at its men’s building, 44 E. Cozza. In August, the department began revocation proceedings of ABHS’ license at its other facility, for women, at 3400 W. Garland.

The separate investigations cited ABHS for “neglect or indifference to the welfare of patients.” Health inspectors found patients living in unsanitary conditions, with critical medical needs untended, according to an investigatory report.

The owner and CEO of ABHS, G. Craig Phillips, said last week that his troubles are the growing pains of a new business trying to live on low state payments. He said he feels “targeted” by regulators and competitors who don’t like his style.

In response to the health concerns, a second state agency, the Department of Social and Health Services, cut off all admissions to ABHS, severing the business’s source of new income. ABHS received more than $1.3 million from the state last year.

“We’ve invested everything we can,” Phillips said. “There’s been a lot of people who don’t want it to succeed, and we’ve had to deal with that.”

But for others, action by the state was overdue. Patients complained of going weeks without seeing a counselor. Former staffers alleged in written complaints and interviews that ABHS falsified records to cover up the missed sessions, thereby assuring the state would continue to pay.

Despite the complaints, officials have been reluctant to shut the facilities down. If they did, nearly a hundred addicts could be left with no immediate alternative for care. Dozens could be lost to the street.

Still, critics have questioned why the DSHS didn’t previously take action against ABHS, the second-largest treatment facility of its kind in the state.

Last May, a DSHS investigator wrote, “It is not unlikely that we will some day have to defend our actions publicly; can we do so?” The agency, the investigator continued, has “had to answer allegations that we have a `sweetheart’ deal with ABHS.”

Managers of other treatment facilities that have gone a decade without a serious, substantiated complaint can’t understand why ABHS has stayed open. The DSHS took more aggressive action four days after The Spokesman-Review inquired about the state agency’s handling of ABHS.

“The mystery to me is not so much why Craig does what he does, but where the checks and balances are,” said Mark Brownlow, administrator of the nonprofit Spokane Addiction Recovery Centers.

“Why don’t they take action? Is all this stuff I took so seriously really serious? Do I just need to lighten up?”

Phillips, 50, came to the treatment business after getting treatment for alcoholism himself, according to records filed in a divorce. A past girlfriend got him into treatment in 1987 while he was working at a grocery warehouse, according to the records.

Phillips enrolled at Eastern Washington University the same year, at age 37, and within five years earned a master’s degree in psychology. He was nearly $24,000 behind in child support at the time, according to the divorce records.

He soon landed a job running the Salvation Army’s treatment program on West Garland, just before the nonprofit decided to get out of the treatment business.

Phillips made a deal with the Salvation Army to get its patients, staff and contracts. He then bought a second building, a former nursing home on Cozza Drive. With two years in the field, Phillips soon opened the ABHS facilities.

He did it by borrowing $100,000 from an elderly Salvation Army maintenance employee, then using the money to get a $1.67 million loan from The Money Store, according to property records. The maintenance man sued Phillips last year for nonpayment; the case was settled out of court, confidentially.

The two ABHS facilities have a combined 171 beds and treat more than 1,000 people a year. Nearly all are indigent and severely addicted.

The DSHS pays ABHS for treatment, requiring weekly one-on-one counseling sessions and daily group therapy.

The Department of Health ensures that ABHS’ buildings are sanitary and that medical standards are followed. ABHS must remain in good standing with both to remain in business.

Patients - 90 percent of them on state assistance - arrive from across the state, sent by state-funded referral agencies. They stay between 30 and 90 days. About half come from the Puget Sound.

They often arrive under court order because of criminal convictions or entanglements with Child Protective Services. Failure to graduate from ABHS could cost them jail time or custody of their children.

Former employees said Phillips gets teary during job interviews when talking about his passion to help people overcome their addiction.

He said he built ABHS because the Salvation Army’s closure offered the opportunity. “I really didn’t have any business savvy or training,” he said. “I really didn’t know the scope of what I was doing.”

He stands out in the drug treatment community because ABHS shuns the common 12-step treatment approach, favoring a behavioral modification philosophy that emphasizes good decision-making.

While most others in the state-funded inpatient field work at nonprofit agencies and wear battered jeans and flannel, Phillips is a suit-wearing businessman who earns $75,000 a year, likes to talk about his 22-foot sailboat and charges a new Ford Expedition to his company.

His flashy style may be a reason that others are frustrated with him, Phillips said.

“I’ve got a strong personality, and if that’s a crime, string me up,” he said. “Do I cut corners to benefit myself? Absolutely not. I believe in what I’m trying to do and I’m not trying to take advantage of anybody.”

Just as Phillips relies on state funds, the DSHS needs treatment centers willing to accept its payments - $64.03 a day for an initial 30 days of treatment, $36.64 a day for up to 60 additional days - to provide counseling, shelter and food.

“You can’t stay in a lousy motel for what they reimburse people, and providers are expected to comply with all the regulations and all the training requirements,” said Helen Gorsuch, executive director of the Washington Association of Alcoholism and Addiction Programs, a trade group of public and private treatment centers.

“I think agencies have been squeezed because the requirements continue to go up,” she said. “If they don’t have a broad base of reimbursements like hospitals, something gets squeezed.”

But the low rates are not reason to provide substandard care, she said, and treatment centers shouldn’t agree to accept the rate if they can’t afford it.

There are 68 residential programs statewide that serve the poor, with capacity to serve just one in five addicts willing to get help. The shortage is more acute in Spokane County, with just 12 percent of addicts getting help, said Nancy Echelbarger, the Spokane Regional Health District official responsible for finding treatment for local residents.

Addicts now must wait three months or longer for treatment. That forces the DSHS to choose between funding a troubled agency or closing it and extending waiting lists further.

“All other treatment providers feel that they would do anything if (ABHS) would correct the problems and do a good job,” Echelbarger said. “We don’t want to see this facility close. But if they don’t correct the problems, I don’t see any other answer.”

As soon as ABHS fully opened in 1998, employees and patients began filing allegations that clients were being neglected.

One patient wrote to DSHS that she was at ABHS for 54 days and saw a counselor for 20 minutes. Another wrote that, after she had been in treatment for two weeks, her counselor didn’t know her first name.

An immigrant patient who knows very little English asked for a translator upon admission in July. Six weeks later, ABHS hadn’t provided one, according to state health records.

Another patient, Renee Slattery, said in an interview that patients were often told to skip afternoon group sessions in order to paint the Garland building.

Similar complaints were filed with the state by a DSHS social worker and Okanogan County’s counseling center, which refers patients to ABHS; their clients simply weren’t seeing a counselor, they said.

DSHS investigators were unable to substantiate the complaints, because they found notes in patients’ charts showing that counseling had occurred.

But in March, former counselor Todd Meyers told DSHS that he had been told to alter files in a way that misled investigators into thinking more treatment had occurred. With the complaint, he attached a signed note from his supervisor ordering him to do so. “I believe this to be illegal,” Meyers wrote on the note, which he sent to the DSHS.

At least four other complaints echoed his concern of falsified records. With Meyers leading them to specific files, the DSHS found evidence that files were altered three months after clients were discharged - a clear violation of regulations.

Ken Stark, head of the DSHS’ Division of Alcohol and Substance Abuse, concluded that the alterations were good-faith efforts to document treatment that had occurred.

“It was a stupid thing to do,” he said. “We didn’t feel then, nor do we feel now, that there was an intention to misrepresent themselves.”

The DSHS didn’t take any action to cancel ABHS’ contract as a result of the April report.

Phillips responded with a letter accusing Meyers of being “a negligent, insubordinate counselor” whose “incompetent, incomplete care” forced ABHS to make late entries. “If you only review a small sampling of files that have been reported to be deficient, it only stands to reason that you will … find a pattern of problems,” Phillips wrote.

But more questions about a lack of treatment arose a month later. DSHS’ internal auditor was asked to review ABHS because of “troubling trends,” including “allegations of changing or falsifying clinical records” and “inaccurate billing submitted for payment,” according to an internal DSHS memo.

The auditor, Sue Bush, in a May report found that 60 of the 77 patient files reviewed “lacked the documentation supporting the client’s participation” in a minimum amount of treatment. Some files showed no record of “participation in any program activity,” she wrote.

Phillips said last week that the problem was recordkeeping, not a lack of treatment. And he said problems with documentation have been fixed by more thorough counselors.

“I’ll guarantee you the services have been provided,” Phillips said. “Whether we can provide proof in a way they want is something else.”

Phillips suggested that ABHS’ complaint tally may be caused by continuing pressure by the DSHS. “I see staff running scared, and these clients know it,” he said.

Don Greenley was hired as ABHS’ food services director this summer after running the kitchen of the famous Betty Ford Center in Rancho Mirage, Calif.

Patients were being fed baloney sandwiches and watery soup when he arrived, Greenley said. He said Phillips denied his request to spend more than $4 a day per patient on food.

“The only way you can feed that many people for that little money is macaroni and cheese, which I wouldn’t do,” said Greenley. “It’s the worst run facility I’ve ever seen in my life, bar none, of any kind.” He quit after two months.

Turnover has been a concern for DSHS since ABHS opened. The result of turnover is inexperienced, overworked staff who don’t provide the level of counseling that patients need and that DSHS requires, according to complaints and interviews with former staff.

ABHS, which currently employs 43, has hired more than 275 staff since 1997, according to former management staff; 26 of the people on payroll June 1, 2000, are now gone.

To reduce the turnover, DSHS staff suggested this spring that Phillips back away from day-to-day management. He hired a well-recommended administrator; she lasted six weeks, climbing out a window on her last day to avoid a confrontation with Phillips.

Phillips blames the state for the high turnover. Frequent visits by state regulators investigating complaints are driving staff away, he said.

“You create a hostile environment and no one will want to work there,” he said.

He also said he inherited staff from Salvation Army that resisted his unconventional treatment philosophy. They had to go, he said.

Dr. John Hershey, a 74-year-old general surgeon, who has worked under contract with Phillips for five years, applauds him for doing a “remarkable job” treating his clients on limited resources.

But he, too, is concerned about turnover; Hershey said Phillips has fired several good nurses without consulting him. “I think he’s antagonized some good people,” said Hershey.

In April 1999, Spokane County staff were monitoring a contract for outpatient services when they found what was later described in an audit as a criminal act at ABHS.

According to the audit, someone at ABHS twice transferred money totaling $11,150 out of clients’ protective payee accounts, once to cover payroll, once to pay down ABHS’ $100,000 line of credit.

ABHS’ contract specifically said that taking money from protective payee accounts is a crime, wrote county treatment coordinator Dan Finn. The accounts hold a small state stipend to cover each client’s personal needs.

Because of the transfers, three clients’ checks bounced. The money from both transfers was eventually returned, according to Finn’s audit.

Finn recommended that Spokane County commissioners cancel the contract immediately and that the state auditor be alerted.

The commissioners declined to act, instead letting Phillips’ contract lapse a month later. County staff also declined to press for criminal prosecution or a state audit.

“Perhaps we should have, but we didn’t,” said Finn. The county did, however, forward its audit to DSHS.

Stark said he didn’t know that Finn’s audit found potential criminal conduct. “That’s news to me,” he said.

Phillips said he approved the transfers after being told by his former accountant, George Brower, that the transactions were appropriate.

Three former staffers, including business clerk Janel Jensen, say they heard Phillips order Brower to make the transfers. Brower declined to comment. Though DSHS was slow to act on the complaints, the Health Department moved more quickly. In June 2000, an investigator, acting on complaints, noted 120 separate “findings,” including serious lapses in oversight of medical care at the Garland building.

A month later, the investigator found the problems weren’t fixed, and the Health Department began to revoke ABHS’ license for the Garland building.

Among its concerns were misuse of prescription medications, moldy bathrooms and skipped patient meals.

Last Thursday, the Department of Health found problems at ABHS’ Cozza building as well, including flies and filth in the kitchen, and began the process of revoking its license.

Both investigations found a pattern of mismanagement of patient medications, including incidents where patient names were scratched off and prescriptions given to other patients.

A dozen former clients and staffers said in interviews with The Spokesman-Review that ABHS is so awash in prescription tranquilizers that patients used them to barter for cigarettes.

Diana Boyd, a 50-year-old heroin addict, said she was concerned how easy it was to get codeine pills, which are covered by Medicaid. Four times daily, patients could dip their hands into baggies full of prescription drugs, taking what they needed, she said.

Patients would take the medications, then go to group sessions in a fog, she said. “It was total neglect,” she said of the patient care at ABHS. “Absolutely anything could happen in there, because no one was in control.”

Phillips said he hadn’t heard that criticism before. “It hasn’t been brought to me,” he said.

Other drugs were reportedly found during spot checks by staff. One former staffer, Valerie Allen, reported finding a loaded heroin needle in a toothpaste holder. Another found beers chilling in a toilet tank.

Health Department inspectors also found lapses in medical care, particularly at the Garland building.

Among the most serious was that of Janeen Bates, a 51-year-old from Seattle, who checked into ABHS July 21 for treatment of alcoholism.

Bates’ cirrhosis of the liver was bad enough to qualify her for a transplant at the University of Washington Medical Center, but doctors dropped her from consideration because Bates relapsed in February. She hoped that treatment would put her back on the transplant list.

To prevent toxins from building in her body, Bates needs to have four to six bowel movements daily, said the UW’s Dr. Bruce Tung. She arrived at ABHS without her bottle of laxative, expecting the facility to order it.

According to health inspection reports, her prescription for the $14 bottle got lost, and Bates didn’t have a bowel movement for eight days. She was rushed to Holy Family Hospital with symptoms of jaundice and muscle spasms. ABHS staff later found her prescription slip lying in a box.

“It’s a serious lapse” of medical care, said Tung. Bates could have slipped into a coma, he said. She remains a patient at ABHS.

Of Bates’ problem, Phillips said, “I don’t know that happened.” The Department of Health didn’t thoroughly check out the complaints before citing ABHS, he said.

The license revocation proceedings against the Garland facility are on schedule for a Jan. 30, 2001, hearing; a schedule hasn’t been set for the Cozza proceeding. Without a health license, ABHS could not operate.

“We’d like to see that the place is run according to modern medical standards,” said Gary Bennett, head of the agency’s facilities licensing division.

“I’m not sure with their recent history that they’re going to convince us of that.”

He said the scope of problems - with medications, lack of staff training and unsanitary kitchens - distinguished ABHS.

“We’ve come across other facilities with similar problems in more focused areas,” said Bennett. “This is very broad-based, and that’s what makes it very concerning.”

The complaints documented by his investigators are “probably the tip of the iceberg,” Bennett said. In situations like this, patients are often too scared to come forward, he said.

The delay in DSHS’ reaction frustrated Mary Testa-Smith, the DSHS Division of Alcohol and Substance Abuse staffer in Spokane who investigates complaints against ABHS.

“Dozens of patients have complained to DASA about inadequate treatment; dozens of former and current staff members have complained to DASA about inadequate treatment; and, from all around the state, at least a dozen agency personnel … have complained to DASA about inadequate treatment,” she wrote to her bosses in a May 2000 internal memo.

“We have historically dismissed these complaints on the basis of jealousy of Craig, on a conspiracy theory, and on `disgruntled worker’ revenge. We have negatively impacted our reputation and have had to answer allegations that we have a `sweetheart’ deal with ABHS,” she wrote.

DSHS didn’t take action until the Department of Health began license-revocation proceedings. As a result, ABHS’ funding has withered; ABHS staffers said Phillips tapped his 401k plan to meet bills this month.

Stark defended the DSHS actions, saying his agency must be prepared to defend itself in court if it cancels a contract.

He described problems at ABHS as mostly bad paperwork - not “life-threatening” situations or patient abuse that would be grounds for immediate contract cancellation.

“We’re not trying to run around closing people down for every little problem,” he said Monday.

But he said on Friday, after the Department of Health report, that the DSHS was ceasing all new referrals.

His staff will return to ABHS on Oct. 20 to see if the business can prove it’s providing enough treatment by qualified staff. If not, the DSHS will cancel the contract, Stark said. “We’ve reached a last straw,” he said. “It’s up to the program to make or break it.”

“I think we’re going to weather the storm,” Phillips said. He’s spent weeks checking client files and said they look “perfect.”

“We’re going on providing services, and we have been providing some of the best quality services around.”