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After a holiday week scramble by Erie County and New York State mental health departments, hundreds of former clients of Alcohol and Drug Dependency Services will be able to continue treatment without interruption into 2014, most of them in the same locations and with the same staff.

ADDS, which operated inpatient halfway house and outpatient alcohol and drug treatment services for adults and teens at five locations in Erie County, lost its operating license Tuesday. Four other treatment agencies confirmed they accepted the governments’ request to take over the ADDS clients, effective Wednesday.

Ellery Reaves, county commissioner of mental health, said ADDS had serious revenue problems in the past year after anticipated state payments for patient treatment did not come through.

“ADDS began to experience some financial issues involving their billings through the state Medicaid system after New York switched to a managed care system,” Reaves said. “Basically, their expenses overrode their revenues – they were unable to pay their bills.”

He said the situation seemed to be caused by a lack of suitable infrastructure at ADDS “to catch the nuances of the changes in Medicaid billing.”

Tax filings for the year 2011 by ADDS show that, of more than $9.6 million in revenue that year, nearly $4 million came from Medicaid.

Other agencies that are compliant with the billing procedures noted that the managed-care system also required changes in how they structure their services so they would be eligible for reimbursement, and that also may have been a problem at ADDS, Reaves said.

The changes in patient care and billing practices coincided with an effort to broaden services at ADDS, according to Reaves. His department had been working with the agency “for some time” to try to resolve the billing issues, he said, but in the end the deficit was too much to overcome.

“The timing was all bad,” he said. “And you have to show that you are a viable agency if you want to remain certified.”

In December, ADDS had announced its intention to close its inpatient program at Terrace House, 291 Elm St., and it laid off staff members in a money-saving effort. But on Monday, another treatment facility, Horizon Village, announced it would take over the Elm Street facility and keep it open. A spokeswoman for Horizon, which has a waiting list of 90 clients itself, said it expects to have no trouble filling the 28 detox beds and 43 inpatient rehabilitation beds at Terrace House.

The ADDS outpatient treatment center at 460 Main St. will be closing, but its clients are being contacted to continue treatment through Spectrum Human Services, according to that agency’s president, Bruce Nisbet.

Nisbet said Spectrum was contacted Dec. 26 about coordinating care for approximately 200 people who were receiving outpatient services at the Main Street site, along with other “first time” clients with appointments scheduled through January.

“We’ve been able to reach about 120 of them face to face, and we are sending letters to the others we have not been able to reach,” Nisbet said earlier this week.

Spectrum serves 17,000 people each year in its 14 locations.

“I think the state called on us because they know we have the capacity to do this,” Nisbet said. “The important thing is they [the clients] can get the care they have been receiving.”

Reaves said state and county officials saw Spectrum’s absorption of the Main Street clients as an opportunity to localize services for those patients, so they could get treatment closer to where they lived.

“There’s going to be some mild change for people who have to go to other providers, but it looks like everyone will get treatment, uninterrupted,” he said.

Three other ADDS programs with more than 80 clients, including two halfway house facilities, are being picked up by Cazenovia Recovery Systems. Cazenovia announced Thursday that it has taken over Ivy House, 2025 Broadway, which serves men, and Casa Di Vita, 200 Albany St., which serves women. It also will operate ADDS’ supportive living program. The new programs bring Cazenovia Recovery to more than 300 treatment beds.

Kids Escaping Drugs, which has worked in conjunction with ADDS at its youth treatment facility, Renaissance House, 920 Harlem Road, West Seneca, will be taking over that campus. Renaissance House can treat up to 62 clients ages 12 to 20, and is at about 85 percent of capacity now, according to Robin Clouden, executive director of Kids Escaping Drugs.

She said Thursday that she is expecting a smooth transition. “We’re keeping the same staff, the same programs. We have no immediate changes planned.”

Each of the agencies has made a commitment to operate the respective programs for three months, and all indicated an interest in taking them over permanently.

Reaves said that in three months the county will be sending out the requirements for those services to continue and they will be open for bid.

He also said that, although it has lost its operating license, as far as he knows, the Alcohol and Drug Dependency Services organization has not closed down and still could find a way out of its financial problems.

Efforts to reach representatives of ADDS about their plans have been unsuccessful.

However, Reaves said, “If they feel they can regroup and retool and get it together, they can bid for those services again. Anyone who is qualified can bid on them.”

email: mmiller@buffnews.com