California Rehab Clinics Recruit Group Home Residents to Pad Client Lists

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    NEWSLETTERS

    Richard Hartog/The Center for Investigative Reporting
    At Grandview Retirement Home, a 216-person complex for the elderly in Los Angeles, the administrator says she can’t stop residents from going to drug rehab clinics or drivers from pulling up their vans outside on a public street.

    By Lance Williams
    Center for Investigative Reporting
    Publish date: Dec. 10, 2013

    Pat Thomas believes God made five of her.

    One of them is Beyoncé. She is also actress Brooke Shields, former Elvis Presley girlfriend Ann-Margret and singer Etta James – not actually dead, she says.

    And then there is “the first one,” as she calls herself: Pat Thomas, a woman with no teeth who sits alone in a wheelchair in the dreary courtyard of a Los Angeles board-and-care home, smoking cigarettes and battling nightmarish visions.

    “The other ones go places,” Thomas, who’s in her early 60s, said of her other identities. “The first one don’t go nowhere.”

    That’s why Thomas cherished the days when vans would pull up to take her and other residents to drug and alcohol rehab.

    Thomas didn’t go for the therapy. She said she’s been drug-free for a couple of years. She went, she said, for a temporary escape and perks like cigarettes and cash doled out by the clinics.

    A recent investigative series by The Center for Investigative Reporting and CNN uncovered rampant overbilling in California’s publicly funded drug rehabilitation system for the poor. It prompted a state crackdown that has cut funding to 177 Drug Medi-Cal clinic sites so far and opened dozens of Department of Justice probes.

    But even as clinics are shut down, others are filling in, picking up some of the same mentally impaired residents for counseling they may not need or understand.

    Dilapidated sober living houses and bed bug-plagued homes for the elderly and mentally disabled offer one-stop shopping for clients like Thomas – willing to come along for the ride whether they have addictions or not.

    Each warm body is a renewable resource, representing about $27 in government funding for a group counseling session and $64 for a one-on-one appointment. It adds up.

    Clinics employing the tactic have collected tens of millions of dollars a year, a CIR review found. The demand for Medi-Cal-eligible clients has created a competitive marketplace in which clinics bribe residents to attend counseling and pay kickbacks to home operators, according to government records and interviews with former clinic staffers.

    The practice is one of a variety of schemes targeting board-and-care residents on public assistance, said Molly Davies, coordinator of elder abuse prevention and long-term care ombudsman programs in Los Angeles.

    “It’s exploiting them,” Davies said. “It’s a little bit like Hansel and Gretel, luring them in with something that they want so that you can take advantage of them and make them, in some respects, part of the fraud.”

    Michael Farkas-Jones used to pick up Thomas and fellow residents of Grandview Retirement Home, a 216-person complex for the elderly across the street from MacArthur Park.

    Farkas-Jones was a van driver and counselor for Changing Steps and Clean & Free – two clinics run by the same person out of the same squat building in South Los Angeles. He remembered that Thomas was brought to both programs for years, even though she didn’t belong there. Farkas-Jones said his bosses told him to make up counseling notes about how she and others were benefiting from treatment.

    A former meth addict, he worked for the clinics from 2009 to 2012, when he said he was fired for damaging a clinic van while parking. The board-and-care residents were “pieces on a board,” he said. “They’re just being shuffled around.”

    Grandview’s administrator, Yeni Flores, said she can’t stop residents from going to clinics or drivers from pulling up their vans outside on a public street.

    The $2 million in combined annual funding for Changing Steps and Clean & Free was suspended in the statewide fraud sweep in July spurred by the CIR/CNN investigation. The suspension letters said some clients didn’t qualify for rehab, according to the president of the two clinics, Belinda Baker. But she disputes that.

    “If you can’t comprehend ... and you don’t have a problem, we didn’t intake you,” she said.

    Baker, a former crack addict-turned-entrepreneur, said she’s aware that other clinic operators pay kickbacks to board-and-care homes. But Baker said she gave out cigarettes for clients to smoke only on breaks during counseling and gave $2 of her own money to clients who needed bus fare.

    “I didn’t bribe nobody to come nowhere,” she said.

    Farkas-Jones describes a different scenario. He said he would give each of Baker’s clients a pack of low-quality cigarettes before he or she got out of the van – to hide the transaction from government auditors who might be on-site. After the counseling sessions, the clients got cash, he said – up to $4 for Grandview residents, $5 for those who came from a different home.

    Thomas liked listening to group discussions, she said, but was clear on her favorite part.

    “They give you money and then they give you a pack of cigarettes,” she said in her raspy croak of a voice. “I loved that one.”

    Curtis Williams worked at several L.A. clinics over the past decade. He said rehab centers routinely paid kickbacks to group living facilities for the privilege of picking up their residents at a rate of about $10 a head – ranging from $200 a month for 20 residents to $500 a month for 50.

    Williams knows this because he paid kickbacks himself. “I hand-delivered the money,” he said.

    He would ply communal home operators with money as an incentive for them to get their residents up, dressed and ready for the vans to pick them up, he said. Other residence operators would hear about the kickbacks and want in, he said. Some, approached by multiple clinics, could pick the highest bidder.

    Now, he said, “every facility knows that people are paying, so why are they going to give you access to their clients for free?” he said.

    Clinic owners disguised the scheme by paying themselves excessive salaries and peeling off the extra cash for the payoffs, Williams said.

    On a recent Thursday morning, a van emblazoned with the logo of VIP Outpatient Treatment Center stopped outside Faith Manor, a board-and-care home for the mentally disabled in Central Los Angeles. A few residents got in for an hour’s ride in traffic to the San Fernando Valley suburb of Northridge.

    They used to go to another clinic. But after it was shut down this year, VIP moved in.

    There, in the back of a parking lot, they sat in plastic chairs next to a dumpster and collected steak-and-cheese burritos and coffee as they signed in for group sessions. Then they crammed into the small counseling rooms of VIP Outpatient.

    Asked about the situation, VIP Executive Director Tigran Sargsyan said he was providing an “important service for society. … These people need the services.”

    But he also acknowledged that some have been clean for many years.

    “There are some of them they haven’t used let’s say for 10 years, but they are potential to get relapse,” he said.

    But that doesn’t meet the requirements of Drug Medi-Cal. Each patient must have an addiction diagnosis based on using drugs or alcohol in the past 12 months, according to the state Department of Health Care Services.

    At Grandview Retirement Home, Pat Thomas sits alone at her usual post in the corner of an internal courtyard, smoking her way through the day.

    Thomas gets scared in her room, she said, so scared she wants to die. The night before, she said, God was coming through the walls and putting animals inside of her. She’d like to get out of Grandview for good.

    “I’d love to be in a house and cook and have a computer and sewing machine,” she said. “And write some more records.”

    But she’ll settle for a temporary getaway.

    When Clean & Free and Changing Steps stopped coming, Thomas went to another clinic for a while, she said. But that one, Ultimate Lifestyle Center, also got suspended this year. She hopes the vans return.

    “Tell ’em to come get us,” she said.

     

    This story was edited by Amy Pyle and copy edited by Nikki Frick and Christine Lee.

    This story was produced by the independent, nonprofit Center for Investigative Reporting, the country’s largest investigative reporting team. For more, visit cironline.org. Evans can be reached at wevans@cironline.org.