Maryland regulators ordered an addiction treatment provider to stop seeing patients after an investigation by The New York Times and The Baltimore Banner showed it had placed some of them in apartment buildings where drug use was rampant. The state’s Behavioral Health Administration issued a “cease and desist notice” to PHA Healthcare, on Dec. 23, three days after the investigation was published, the Times reports. The news outlets reported that the company collected millions from Medicaid providing online group counseling sessions. It offered free rooms to people who enrolled, but some of its buildings were effectively government-funded drug houses, where many patients relapsed and sometimes died. The state said PHA Healthcare had been operating without a valid license since April. The program was told to transfer its patients to other providers or make alternative arrangements “to ensure continuity of services” by Jan. 23.
The company’s owner, Stephen Thomas, had no significant experience providing drug treatment when he started operating the for-profit business in 2020. In the fiscal year that ended in June, the company enrolled more than 720 patients and received $8.5 million from the state for providing counseling services. Last year, PHA Healthcare’s operators received a grant through the city and a commendation from the City Council for affordable housing. The investigation traced the deaths of at least 13 people to the company since 2022, including that of a 1-year-old boy who starved after his mother died in the program’s housing. Patients described living in poor and unsanitary conditions, where even house managers got high. Some group counseling was conducted online by people who lived in places like Nigeria and did not appear to be licensed as counselors in Maryland. The Times/Banner investigation showed that state officials for years failed to vet and audit addiction treatment operators adequately, allowing a flood of new programs, some of which used tactics that health officials and other, longstanding providers have described as unscrupulous.