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Addiction Industry Lobbying: Centers are More Active, Getting Results
July 2006

When you talk to Chris Crosby about managed care, it quickly becomes apparent that you're talking to a man on a mission: "The whole way managed care approaches addiction treatment is a travesty," says Crosby, who, as CEO of South Florida-based Watershed Treatment Programs, runs one of the nation's largest and fastest growing treatment operations. "The payors wouldn't dream of denying coverage to someone with diabetes who has, yet again, ignored the advice of doctors about diet and exercise and wound up, yet again, in the hospital. But if an alcoholic seeks help repeatedly, that's somehow less worthy? The situation our industry finds itself in with respect to the payors is absurd and wrong, and it needs to change."

Florida State CapitolOf course, Crosby is certainly not alone in his feelings of antipathy towards the damage that managed care has wrecked on the treatment business - more than half of all inpatient treatment centers closed in the 1990s - as well as on the overall advancement of the cause of recovery from addiction in America.

Some of the industry's most respected luminaries, including the revered founder of Pennsylvania-based Gateway Rehabilitation Center Dr. Abraham Twerski, have decried the huge cutbacks in outlays for inpatient addiction treatment, with managed care gatekeepers responding that inpatient hasn't been proven any more effective than other less expensive types of treatment, like outpatient. Treatment industry congressional allies, like Minnesota's Jim Ramstad, have nevertheless continued working tirelessly on Capital Hill to get addiction and psychiatric parity legislation passed.

Payors Not Paying

But few institutions have as much at stake in efforts to get the payors to pay than does Watershed, which, unlike most private inpatient centers, still relies on insurance carriers for the large bulk of its revenues - about 80 percent. Over the past 15 years, inpatient centers have increasingly moved up the patient economic food chain, seeking out only those that could afford to pay out-of-pocket the seemingly ever higher prices charged by many of the nation's inpatient providers. But Watershed has resisted going that route, choosing to do battle on a daily basis with payors, most whom fight back every step of the way. "We do not even come close to getting reimbursed for the all the services that we provide," says Crosby, adding that if Watershed did, "our revenues would easily double."

One of the key ways that payors would routinely attempt to deny care or payment, according to Watershed, is to assert that the center's designation as simply a "residential" treatment facility under Florida licensing nomenclature meant that Watershed was merely providing "custodial" services, which the payors often resisted paying for. "The payors said that there had to be a medical need, as well such services provided, if inpatient care was to get paid for," says Crosby. "We would, of course, explain to them that there are few treatment centers in the country that adhere more to a medical model of treatment than we do, but they would always use the excuse that our license said "residential," insisting that it meant our services were just custodial in nature."

Bridge Back to Life Executive Director Gary ButchenThe Watershed had understood several years ago that it might one day need help in the state capital of Tallahassee. So, it made a conscious decision to court its newly elected state representative from Delray Beach, Adam Hasner. "Had I not been invited to the Watershed, I would likely still not know that Delray Beach has one of the highest concentrations of treatment facilities in the country," says Hasner, adding that he now has an in depth understanding of some of the issues that surround the treatment business. That understanding was to prove vital to Watershed when it finally made its move in Tallahassee.

Going to Tallahassee

In 2004, Crosby decided that a change was needed to Florida's licensure categories, one that would ultimately reflect the highly medical approach taken by Watershed, which has nearly 200 beds and employs 30 full-time and part-time psychiatrists and MDs, as well as over 60 nurses. "We went to the state regulators first," said Crosby. "They were quite sympathetic to our cause, but made it clear that legislative action would be needed for what we required." Watershed then hired well-known Florida political operative Jim Daughton, who represents such heavyweights as Microsoft and American Express in the state. "What you had here with the Watershed was a situation where they needed a licensing designation that better described the comprehensive services they offer," said Daughton. "The existing licensing nomenclature was really more suited to the publicly funded treatment centers, which had over the years had more of a voice in governmental affairs."
The upshot of all Crosby's efforts was that Adam Hasner, along with a colleague of his in the state Senate, sponsored successful legislation creating an "Intensive Inpatient" treatment licensing category in Florida, with the Watershed acquiring the first such license in March. "We expect this will be a very useful tool with the payors," said Crosby.

The Watershed, which has made use of its Tallahassee contacts and lobbyists for a variety of initiatives, is just one among many treatment centers to use more aggressive advocacy tactics in recent years to further their interests. Also in Florida, the WestCare Foundation has joined up with lobbying powerhouse Associated Industries of Florida, where Miami's The Village South founder Matt Gissen now sits on the board. The Village South, one of Florida's oldest treatment operations, is now part of WestCare after the two merged last year. And in New York, the newly formed Addiction Treatment Association of New York is aggressively moving forward with advocacy on a number of fronts, while the California Association of Alcohol and Drug Program Executives, CAADPE, has been highly visible with respect to issues surrounding Proposition 36, which mandates drug treatment instead of jail in the state.

The Pennsylvania Story

Among the most important pieces legislation ever passed with respect to the treatment business was in Pennsylvania. For years, since 1989 in fact, the state has had a law on the books requiring that insurance carriers pay for 30 days inpatient so long as such care was deemed necessary by a licensed MD, psychiatrist or psychologist. Unbelievably, despite the decimation wrought on inpatient by managed care during the 1990s, the statute was never enforced by Pennsylvania authorities. Even more unbelievably, the providers didn't quickly file a lawsuit seeking enforcement. "A few years ago, we finally got more aggressive," said Ken Ramsey, CEO of the state's largest treatment provider Gateway Rehabilitation Center, which has extensive operations throughout Pennsylvania and Ohio, with a large concentration of facilities in the Pittsburgh area.

During the 1990s, Gateway did battle with a number of managed care providers, especially the much hated behavioral health unit of managed care company Magellan Health Services, which had been contracted to handle the business of Highmark Blue Cross Blue Shield, Western Pennsylvania's Blue Cross carrier.

Working through the able Deb Beck of the Drug and Alcohol Service Providers of Pennsylvania, DASPOP, the industry put intense pressure on the state insurance commission to enforce the statute, belatedly making lawsuit noises . The result was a victory so complete that in 2003 lobbyists for managed care interests readily conceded that managed care had been "thrown out the window as to drug and alcohol treatment benefits" in the state. Despite the fact that inpatient care decisions are now firmly in the hands of Pennsylvania's treatment providers, Gateway says it's inpatient beds are mostly committed to publicly funded clients. The center embarked on the publicly funded strategy to save its inpatient operations in the 1990s, even as it opened large numbers of outpatient facilities to accommodate clientele covered by commercial insurance. "What we will be doing is expanding our inpatient capability to meet the newly rising inpatient needs of the commercially insured," says Ramsey, adding that Gateway will soon begin work on a new 40-bed facility near Pittsburgh.

In New York, the Addiction Treatment Providers Association of New York , ATPA, was founded last year and has fifteen members, including Bridge Back to Life, Liberty Management Group and Cornerstone Treatment Network. "Our members are forprofit providers who felt their interests were not being looked after by other state provider groups," explains Gary Butchen, who runs Bridge Back to Life and is ATPA's first president. The biggest hurdle in getting ATPA off the ground, according to Butchen, has been "persuading the members to set their egos and competitive issues aside to find a common agenda." But Butchen says that this has been accomplished. "Our common goal - to overcome the treatment gap - overwhelms our differences," he says. ATPA is currently in a major dialogue with OASAS, New York's treatment industry regulator -the largest in the U.S.- about pending regulations concerning detox in the state.

"These new rules were set without any input from the for-profits," says Butchen, adding that they now have a seat at the table through the association. ATPA is also in discussions with state authorities on issues surrounding recovery homes in the state, and has met with many senators and with the governor's office. The newly formed group has also hired a lobbyist in Albany to represent its interests, Tom Doherty of Mercury Public Affairs.

Comments (1)Add Comment
Coming from the future.
written by Josh, December 13, 2016
I just discovered this story, but it still holds true. There are even more people addicted to drugs in the future and treatment facilities have proven to be effective, though not perfect. Hopefully the future can bring us even more effective treatment.
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