It’s been seven months since United Youth Care Services and Ready 4 Change, two Greensboro drug-treatment programs, received letters from the state Mental Health Licensure & Certification Section ordering them to stop admitting new clients.

State officials cited both agencies for violating a state regulation for “protection from harm, abuse, neglect or exploitation.”

Specifically, investigators with the state Division of Health Service Regulation found evidence of “serious exploitation” by both agencies. In the case of Ready 4 Change, a state report issued in August 2019 indicates that nine out of 14 audited clients in substance-abuse outpatient programs were exploited by Ready 4 Change. The report found evidence that “clients were provided transitional housing services contingent on their substance abuse treatments,” in violation of the licensing rules for outpatient drug treatment, while acknowledging that “the licensee was aware of the transitional housing, but maintained it was separate from the housing program.”

The report issued 11 days later on United Youth Care Services was even more damning.

It said that CEO Donald Booker and Clinical Director Sandra Grace “orchestrated an elaborate system of using clients with mental health and substance abuse diagnoses, to make their housing contingent on the facility obtaining Medicaid reimbursements for the treatment services that were not properly documented, falsified or not provided.

“Former clients interviewed reported their addiction became worse while being provided services by United Youth Care Services, due in part to the condition of the housing, and the threat of losing housing,” the report went on to say.

The two agencies were also notified that the state intends to revoke their licenses, citing findings that in each case the two agencies’ violations “endanger the safety and welfare of clients in your facility.” The two agencies’ were also assessed administrative penalties totaling $6,000 each. In United Youth Care Services’ case, the Division of Health Service Regulation assessed an additional penalty of $51,500 in January related to “serious abuse” finding, according to court documents.

Both agencies billed Medicaid through two state-mandated programs known as Substance Abuse Intensive Outpatient Program and Substance Abuse Comprehensive Outpatient Treatment. The state investigation came on the heels of reports published by Triad City Beat and the News & Record.

United Youth Care Services and Ready 4 Change both hired Knicole Emanuel, a lawyer who specializes in Medicaid matters, to appeal the state sanctions.

At issue in the upcoming hearings is whether the Division of Health Service Regulation “deprived” United Youth Care Services and Ready 4 Change “of property or substantially prejudiced” their “rights, and exceeded its authority or jurisdiction, acted erroneously, failed to use proper procedure, acted arbitrarily or capriciously, or failed to act as required by law or rule” when it levied the sanctions, according to legal documents filed by the state agency at the NC Office of Administrative Hearings in Raleigh.

Hearings for both Ready 4 Change and United Youth Care Services have faced repeated delays, even before the coronavirus pandemic struck North Carolina. But three days before Ready 4 Change was set to have its case heard before an administrative law judge in Raleigh, a lawyer from the state Department of Justice representing the Division of Health Service Regulation filed an emergency motion to continue.

Candace Hoffman, the assistant attorney general assigned to represent the Division of Health Service Regulation in the appeals, “has had a fever all week and is in the hospital,” wrote Assistant Attorney General Bethany Burgon, who also filed a notice of appearance on the same day. Hoffman “is very ill and will not be able to litigate this case next week,” Burgon wrote, adding that her colleague was “resigning from her current position.” (Hoffman’s LinkedIn page indicates that she is currently employed by the NC State Bar as a field coordinator for the NC Lawyer Assistance Program, a position she has held since March.)

Referring to herself in third person, the state lawyer said, “Counsel for respondent, Bethany A. Burgon, also has an extremely heavy caseload, as Ms. Hoffman’s 40-plus cases are being redistributed among the attorneys in the section on top of their normal caseload.”

By that time, Emanuel had already filed a motion opposing continuation of United Youth Care Services’ hearing. Due to the suspension of admissions, she wrote on Feb. 6, “UYCS has been unable to take on any new patients for nearly five months. UYCS has been suffering financial hardship due to this prohibition of new business admissions.”

Tim Vincent, who was responsible for marketing at Ready 4 Change, told TCB on Friday that the company is no longer operating. Vincent, who is the husband of CEO Christal Smith, said he blames the company’s demise not on the state sanctions but on negative media coverage.

While opposing the state’s efforts to drag out United Youth Care Services’ case, Emanuel also indicated she was seeking a declaratory judgment on her client’s behalf. Previewing the motion she planned to file, Emanuel wrote that UYCS would seeks findings from an administrative law judge at the Office of Administrative Hearings that “there are no existing conditions that could be considered Type A1 violations — defined as violations that resulted in death or serious physical harm, abuse, neglect or exploitation; and no conditions at UYCS’ facility are detrimental to the health and safety of clients, and therefore the suspension of admissions should be lifted.”

On March 2, Administrative Law Judge Donald Overby issued an order denying United Youth Care Services’ motion for declaratory judgment.

The state’s list of proposed witnesses in the upcoming hearings includes current and former staff members, as well as former and current clients of United Youth Care Services and Ready 4 Change, along with a half-dozen officials in the Mental Health Licensure & Certification Section. Emanuel indicated that she plans to call CEO Donald Booker; Clinical Director Sandra Grace; Constance Polite, a quality assurance/improvement professional; and LaTonya Neal, identified as the “housing director for United Youth Care Foundation” to testify in United Youth Care Services’ hearing; and plans to call CEO Christal Smith to testify in Ready 4 Change’s hearing.

The Division of Health Service Regulation report on United Youth Care Services’ documented deficiencies provides a preview of the case the state is likely to put on.

The report cites an interview with an unnamed client at a local apartment complex who reportedly told state investigators: “I don’t have a drug problem; I have a housing problem.” The report says the client told investigators that they had to have a positive urine drug screen in order stay in the housing program, while quoting the client as saying, “They said they could fix the urine. I was made to lie to get in the program. I don’t use drugs.”

The report also quotes an unnamed former recruiter who said she approached prospective clients at the Guilford County Department of Social Services, bus stops, parks and the courthouse. She reportedly told state investigators: “I gave out pamphlets and business cards. ‘Hey girl, you got Medicaid? I’m gonna hook you up (with housing).’”

The former recruiter is quoted in the report as saying Booker and Grace “were in control of this.” The former recruiter reportedly told investigators that she sent clients to a local hotel, while Grace and Program Director Richard Brian Graves “delivered the money” to the hotel to cover housing costs for the drug-treatment clients.

“They do mix up urine (drug screen tests) so they can falsify the record and get Medicaid for them,” the former recruiter reportedly told investigators. “They think the clients are stupid and don’t know.”

United Youth Care Services’ hearing is currently scheduled for the week of May 28.

Zalonda Woods, a former client, said she told state investigators last summer that she got involved with United Youth Care Services, she was under the impression that it was a housing program, and didn’t realize she would be receiving mental-health or drug-treatment services. Woods said to date no one from the state has asked her to testify against United Youth Care Services at the upcoming hearing.

“They need to be held accountable and brought to justice in regard to this situation and what they did to me and my kids,” Woods said. “The majority of [the staff at United Youth Care Services] is black. It hurts you as a black person to see another black person hurting you. We’re supposed to be sticking together and rising above any systemic injustice. For them to be part of that equation, it’s hurtful.”

The housing promised by United Youth Care Services sounded good, Woods said.

“Who wouldn’t want to support a company that is possibly ending homelessness in Guilford County?” she asked. “The reason I can’t support United Youth Care is the way they treated my family. For me as one of the clients and the fact I have children that was in this situation and got harmed, that’s hurt me.”

Donald Booker, the CEO of United Youth Care Services, could not be reached for this story. Knicole Emanuel, the lawyer who is representing United Youth Care Services and Ready 4 Change, declined to comment.

Judge Overby signed separate protective orders in each of the cases to prevent the public disclosure of “privileged patient medical records” that the embattled agencies are seeking from the state Mental Health Licensure & Certification Section. The orders instruct both parties in the cases to file confidential information in sealed envelopes. Judge Overby allowed City Beat to review electronic files from a terminal at the Office of Administrative Hearings in Raleigh. Some listed documents, like a “Pre-Hearing Statement (Amended)” filed by Emanuel on March 19, did not have corresponding electronic documents, suggesting they are maintained separately under seal.

An assistant to Judge Overby told City Beat that the hearings “will be closed to the public due to the protected nature of this case.”

Ready 4 Change’s hearing is currently scheduled for the week of April 27.

“I will be glad when this goes in front of a judge to get the work we’ve done cleared up and resolve these allegations,” Tim Vincent told City Beat.

That may take some time.

Citing the coronavirus pandemic and Gov. Roy Cooper’s stay-at-home order, which is effective through April 30, Burgon filed a motion for continuance on April 14, writing that due to the volume of evidence and number of witnesses the state plans to present, the idea of holding a hearing over the telephone or through videoconferencing technology is unrealistic.

“The present case is set for hearing for five day,” she wrote, “and respondent expects the case to take all five days.”

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