Bain Capital company buys Brattleboro methadone clinic
BRATTLEBORO -- Brattleboro's opiate treatment center is the latest acquisition in a nationwide methadone clinic empire being assembled by a holding of private equity giant Bain Capital.
CRC Health Group, owned by the Boston-based firm founded by 2012 GOP presidential candidate Mitt Romney, has purchased Habit OPCO, the East Coast company that runs the Brattleboro methadone clinic and another in West Lebanon, N.H.
CRC on Feb. 28 purchased all 22 Habit OPCO facilities, in Vermont, New Hampshire, Massachusetts, Pennsylvania and New Jersey for $58 million, said Jonathan Ciampi, CRC vice president of marketing and business development.
Bain Capital, which Romney co-founded in 1984 and where he subsequently made his fortune, acquired CRC in 2006, according to Bain's website.
CRC is a for-profit company and calls itself the nation's largest provider of addiction treatment services. The Cupertino, Calif., based company owns 154 treatment facilities across the country and sees 30,000 patients a day, its website says.
CRC also operates eating disorder programs, boarding schools and wilderness camps.
CRC founder Barry Karlin is also the chairman and CEO of Prospira PainCare, a chain of pain management clinics across the country.
A Habit OPCO official Monday said the acquisition will not affect treatment at the hub, one of five methadone clinics in Vermont.
"Everything operates as-is," said Tracey Nicolosi, director of clinical services for Habit OPCO.
Nicolosi said the purchase was simply an acquisition of Habit OPCO stock.
Ciampi, in a statement emailed through a CRC spokeswoman, said, "we are very pleased with their operations and focus on clients."
The Brattleboro treatment center will be obligated to fulfill any contracts or grants of Habit OPCO, said Barbara Cimaglio, deputy commissioner for alcohol and drug abuse programs at the Vermont Department of Health.
"We do not expect any change in services," Cimaglio said Monday in an email.
The expectations of for-profit companies are the same as for nonprofits, Cimaglio said, and the rates for all the hubs are the same.
The Brattleboro center as of March is the only hub without a wait list, according to the Vermont Department of Health. It serves 505 clients- 106 on buprenorphine and 399 who receive methadone.
The Habit OPCO hub in Brattleboro collaborates with the Brattleboro Retreat, a nonprofit treatment center not owned by CRC.
Since founding CRC in 1995, CRC has bought 82 chemical dependency treatment facilities in 22 states that employ more than 2,000 staff, according to CRC's website.
Karlin also founded eGetgoing, an online alcohol and drug treatment program. The website for eGetgoing Monday appeared defunct.
A Bloomberg news report from 2013 said a CRC clinic was chronically understaffed and dispensed take-home methadone in doses as large as a 30-day supply.
A 2012 report by Salon found allegations of abuse and neglect in at least 10 CRC residential drug and teen care facilities across the country. Ex-staffers told Salon the company valued money-making over client safety.
Two months after the Salon report, R. Andrew Eckert, CEO of CRC, released a statement in response to what he called "one-sided" and "misinformed" media reports about CRC.
"Having for-profit, investor-owned treatment centers is a positive thing for our country. Unlike many non-profits or single-owned facilities, we have the geographic breadth and financial stability that enables us to continue to provide these necessary services, even in challenging economic times," Eckert's statement said.
Bain Capital holds about $70 billion in assets under management, according to its website. Among its other health care investments are Hospital Corporation of America and Lake Region Medical.
There are five addiction treatment hubs in Vermont, at seven locations. Hubs are regional centers that provide specialty treatment to addicts, including medication and access to counseling and other basic and medical services.
The other hubs are Rutland, Berlin, Burlington, Newport and St. Johnsbury.
The Newport, St. Johnsbury and Berlin hubs are run by another national for-profit company, BAART, a San Francisco-based company that also runs clinics in California, North Carolina, Arizona and Nebraska.
At the Berlin hub, BAART collaborates with non-profit Central Vermont Substance Abuse Services.
Between 70 percent and 85 percent of clients who use treatment hubs receive Medicaid, government-subsidized insurance for low-income people. Medicaid is billed a bundled rate of approximately $500 per month per patient.
One issue hub treatment centers face is clients who are uninsured or lose their insurance. There is money in the Habit OPCO's grant to pay for uninsured clients, Cimaglio said. However, she said, "no organization is mandated to serve everyone who comes to the clinic."
Green Mountain Care Board member Cornelius Hogan at a meeting last week questioned Cimaglio about the practice of contracting with for-profit treatment centers headquartered on the opposite coast.
"It has less to do with the distance," Cimaglio said. "I mean, quite frankly we were looking to bring in the provider who delivered what we needed to be delivered."
The state does not operate any of its own services, she said. It solicits bids and contracts with providers.
Running a methadone clinic is complicated and expensive. It comes with strict federal requirements to keep the medicine secure and documented.
It was difficult to get bids for the methadone clinics in Vermont, Cimaglio said.
"I think it also indicates that there's a real need for this type of specialty care and there aren't a lot of providers that are saying we want to do this," Cimaglio said.
Beth Tanzman, assistant director of Vermont Blueprint for Health Monday said there were three bidders for four hubs when the state issued a request for proposals in 2012, partly because the state asked a lot of bidders.
"It was a high bar," she said.
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