Jennifer O’Shea was hired by the for-profit drug abuse treatment company Liberation Way in December to supervise care of struggling addicts at a Montgomery County facility.
By March – as she later testified in an unemployment compensation hearing – she had seen repeated violations of state regulations, dangerous narcotic medicine being left unsecured and managers who failed to act when she pointed out the problems.
Beyond that, she had seen the same struggling clients return to Liberation Way, again and again and again, even though its approach had not worked for them.
Because O’Shea was worried about jeopardizing her career and she had a child to raise, she left Liberation Way in early March.
“It was a great business model, but an awful treatment model,” she said.
Over the course of 13 months, the Reading Eagle conducted dozens of interviews with 15 former and current Liberation Way employees, including O’Shea, in Pennsylvania and New Jersey. Former clients and loved ones of clients also were interviewed, and the newspaper reviewed documents obtained from sources and through Right-to-Know requests.
Among other things, the newspaper learned of an investigation involving Liberation Way being conducted by state Attorney General Josh Shapiro.
Seven of the employees who spoke to the Eagle said they were interviewed – at least six in person – by investigators working for Shapiro. The newspaper also was given copies of two statewide investigating grand jury subpoenas and a Liberation Way email that referred to another subpoena issued by the attorney general’s office.
The newspaper interviews and documents create a portrait of a company that – in the midst of a drug crisis killing thousands of people – appeared to put profits before employee and client welfare and allowed owners to cash in through a December sale of the company to investors worth more than $30 million.
Several original owners of Liberation Way pocketed millions of dollars.
Besides O’Shea, the other 14 former and current employees interviewed by the newspaper did not want their names published out of fear of retaliation or legal action by the company.
One former employee, who reported his concerns to the Pennsylvania Department of Drug and Alcohol Programs last summer, told the agency in an email, “In all transparency, I’m absolutely terrified.”

Multiple problems

The newspaper interviews and document reviews showed:
In less than three years, Liberation Way turned annual revenue of less than $1 million into an enterprise worth more than $30 million when it was sold in December 2017, according to a U.S. Securities and Exchange Commission filing and sale documents.
The four major owners of Liberation Way during its profit surge were D. Dallas Fetterman, Jason Gerner, Branden Coluccio and Andrew McLellan.
Gerner, who was fired as CEO in mid-May and has responded with a lawsuit, said in a court document that Liberation Way “more than doubled its profitability” from 2016 to 2017.
During that period, two of the company’s treatment centers compiled the worst state inspection records in their regions, which included 120 treatment centers, the Eagle reported in stories starting on March 11 of this year.
Problems at the company cited by DDAP included employees who did not know their titles, a lack of logs tracking doses of medication and the inspectors being “unable to determine the facility’s treatment methodology.”
One violation involved the improper handling of methadone, an opioid medicine to treat addicts that can slow or stop breathing if improperly administered.
In the March 11 story, the Eagle described another methadone incident at Liberation Way that occurred after the inspections and led to overdoses by three clients.
Former and current Liberation Way employees were deeply troubled by the apparent cycling of the same clients through its facilities.
A former manager of clinical staffers referred to Liberation Way as a “cash register” designed to milk insurance policies.
“When people started coming back five, six, seven, eight, nine times, that is when I started to protest,” he said. “It was clinically inappropriate. They didn’t belong there.”
Other former employees corroborated his description of clients returning to Liberation Way for six or more regimens of treatment.
Dr. William R. Miller, an emeritus professor of psychology and psychiatry at the University of New Mexico whose research has focused on substance abuse treatment, said he knew of no industry standard on how many times a client should be treated at the same facility.
“In medicine, of course, if one treatment has not worked with a chronic illness, the norm is to try something different rather than more of the same,” he said.
Daniel Kreitman, a health care and treatment fraud investigator who is program director at General Dynamics Information Technology in Maryland, said repeated recycling of people at a treatment center is unethical and “morally wrong.”
Another former employee said she was directed repeatedly to not tell clients’ probation officers if they had relapsed. This was done to ensure the clients were not returned to jail and could remain in treatment that could be billed, she said.
“I felt it was get a client and keep them in the system as long as you can,” she said.
Another former employee raised an index finger to her lips and said “Shhhhh!” to show the company’s response when a client who was on probation failed a drug test.
She said, “If they have a hot urine, Liberation Way will say, ‘Don’t report that.’ ”
Reading Eagle: Bill Uhrich | The Liberation Way LLC drug abuse treatment facility in Upper Dublin Township, Montgomery County, had more violations of law than any other treatment provider in the three-county region during recent inspections.

Troubling revelation

Liberation Way’s new owners have told the company they are aware that questions have been raised.
In a July 10 letter obtained by the Eagle, one of the investor-buyers, Thomas L. Greer, warned the sellers that the investors had received a copy “of a subpoena for the production of documents from the office of the Pennsylvania Attorney General” related to Liberation Way.
Greer also cited a March 22 letter to top Liberation Way officers, written by a DDAP official after multiple inspections of Liberation Way facilities.
It directed the company to halt admissions at two facilities, and said: “Please be advised it (is) your responsibility to keep all patients safe. The actions of Liberation Way have violated state and federal regulations, which compromised patients’ safety and confidentiality.”
Greer, whose letter notified the company of the buyers’ intention to seek repayment for any losses, wrote, “None of these circumstances were known by or disclosed to the purchaser prior to the closing.”
Gerner, one of the company’s co-founders, did not respond to multiple messages and phone calls. The attorney listed on his federal lawsuit also did not respond to messages left at his office.
Fetterman, the other co-founder, died of a drug overdose last year.
Attempts to obtain comment from Coluccio, who still works as chief financial officer, were unsuccessful. And McLellan declined an interview, saying he was a silent investor with no role in the operations of the company.
A spokesman for Shapiro said the attorney general’s office could neither confirm nor deny the existence of any criminal investigation.
LBH Letter by Reading_Eagle on Scribd
Reading Eagle: Natalie Kolb | Insurance statements detailing the cost of treatment at Liberation Way are pictured on Monday, August 6, 2018.

$2,000 a day and up

Liberation Way billing for treatment given to clients often exceeded $2,000 a day and sometimes more than $4,500 a day, according to former employees, former clients and copies of documents viewed by the newspaper.
A former employee said he put up a sign in a client area that listed $2,500 as the daily billing rate for a particular level of treatment, after receiving the figure from Gerner.
Bills or benefits statements for three former clients, shared with the newspaper, show charges of more than $4,500 a day for two different types of treatment.
One former client provided documents that showed Liberation Way out-of-network “outpatient medical service” charges of $27,720 over a six-day period in July 2016. Treatment bills for two other clients covering portions of January 2018 showed billing rates in excess of $4,500 a day.
None of the services involved staying overnight in the treatment center.
In at least two of the situations, insurance companies paid only portions of the billed amounts, according to the documents.
Miller, the retired professor, called $2,000 or more a day for outpatient-style treatment “outrageous overcharging” for what typically is a lot of talk groups and lectures.
Kreitman, who viewed a redacted copy of a client bill, called the billing amounts “an arbitrary number they throw against the wall to see if it sticks.”

Sale of company

In December, investors led by Fulcrum Equity Partners of Atlanta bought a majority interest in Liberation Way for more than $30 million, according to sale documents obtained by the newspaper. Those documents show Gerner, Coluccio, McLellan and the estate of Fetterman were to receive millions.
Less than 2 1/2 years earlier, the brand-new company reported revenue of less than $1 million, according to records filed with the U.S. Securities and Exchange Commission.
Jeff Muir, a partner at Fulcrum Equity, said in a written response to submitted questions, “Fulcrum Equity Partners was not aware of any illegal or questionable practices prior to acquiring Liberation Way.”
The company, he said, had been affected by a not-uncommon dynamic: growth that outpaced the treatment facility’s ability to keep operations smooth.
“That certainly was a contributing factor in the case of Liberation Way,” Muir said.

A career decision

The Pennsylvania probe apparently began in 2017. That year, at least one former employee reported to DDAP and other officials practices the employee believed were unethical, illegal or dangerous to clients.
Several employees said they were interviewed by the attorney general’s office before the end of 2017.
The directive from DDAP about reducing client load came soon after the first story appeared in the Eagle. The newspaper later reported that three Liberation Way employees had died of drug overdoses in less than a year.
In mid-March, O’Shea contacted the newspaper after seeing the first articles.
“I feel an ethical obligation to report the egregious practices of the company and am also planning to file a report with DDAP regarding the unethical practices I experienced in my brief 3 month employment with the company,” she wrote in an email. “I resigned from the company due to the unethical practices and potential jeopardy to my clinical license.”
O’Shea, who was hired in mid-December to oversee the clinical team at its Upper Dublin Township facility, said she was never told of the DDAP inspection and the violations.
She learned of them, from a Liberation Way counselor who worked for her, a few days before the newspaper published the story. Almost immediately, she gave the company six weeks’ notice of her intention to leave.
“I gave notice without having another position lined up,” she said. “I have never been unemployed, however, due to the seriousness of the citations and unethical practices occurring, I felt I had no other choice.”

New CEO, new start?

A few months after the newspaper’s inspection-related stories appeared, Fulcrum hired Andrew J. Rothermel as CEO at Liberation Way.
Rothermel, a Berks County native and former executive at the Berks-based nonprofit Caron Treatment Centers, started work in early May and replaced Gerner as CEO.
He said the company has entered a new era.
“The actions of staff and leadership at Liberation Way – prior to being acquired by Fulcrum Equity Partners – are not reflective of the current conditions,” Rothermel said in a written statement. “Former employees are not always the best indicators of present situations and plans to move forward.”
In the past, Rothermel wrote, the company grew so quickly that “operational gaps” developed.
Those, he said, have now been filled, and the new team is focused on quality oversight, clinical excellence and good patient care.
But even as Liberation Way hired new top staffers – including a new executive director and a new director of quality and compliance – more bad news about the pre-Rothermel operation came out.
DDAP released new inspections done in April and early May at all three of Liberation Way’s treatment facilities that revealed another 80 citations, a far worse showing than the previous set of inspections.
A DDAP spokeswoman said Liberation Way is being monitored for compliance and patient safety. Two of its facilities have been refused regular licenses and instead have been given more temporary, provisional licenses.

Amid the crisis

Fetterman’s widow, Cindy Rosario-Fetterman, would not comment on events involving her husband other than to say, “I miss and love him.”
When Liberation Way got started in 2015, Dallas Fetterman attracted many people to his passion for helping drug abusers.
“He was very charismatic. He has this infectious laugh,” a former employee and onetime client said.
Fetterman and Gerner were the key day-to-day decision-makers when Liberation Way opened in mid-2015.
At the time, Pennsylvania, like the rest of the nation, was overrun by a dramatic worsening of the drug-abuse crisis. The number of people who died of overdoses more than doubled from 2,488 in 2014 to about 5,260 last year.
At the same time, the for-profit side of the treatment industry surged.
Client capacity at Pennsylvania for-profit centers increased by more than 41 percent from 2013 to 2017, while the capacity of nonprofits only increased 28 percent, an earlier Eagle review of state records revealed.
Fetterman died of a drug overdose May 17, 2017.
The company said Fetterman “lost his fight with the disease of addiction” but gave few specifics about his death.
According to the medical examiner’s office in Palm Beach County, Fla., Fetterman died of causes that included heroin and cocaine intoxication.
Gerner, in an article that appeared on philly.com, said he did not know Fetterman was relapsing.
Another top Liberation Way official, Michael Armstrong, told the Eagle he did not know if Fetterman had been in a drug abuse treatment program outside of Liberation Way.
But several former employees said Fetterman had gone to outside rehabs more than once.
Police records from Delray Beach, Fla., indicated Fetterman was in treatment there when he died, and had been in and out of treatment.
“Dallas was the glue,” one employee said. “He was the moral compass for that treatment center.”
When Fetterman was not involved at Liberation Way, another said, “Things definitely got worse.”
Reading Eagle: Bill Uhrich | The Liberation Way LLC drug abuse treatment facility in Upper Dublin Township, Montgomery County.

‘A revolving door’

Former and current employees, describing the environment at the company prior to the arrival of new management, said the company’s desire to keep clients in treatment levels that could be billed at high rates often meant clinical recommendations were ignored.
Many clients came back to Liberation Way after relapsing, again and again, the employees said.
Clients could repeatedly spend weeks or months working their way through Liberation Way’s stages of treatment, leave, relapse and return, they said.
One former employee, who said he knew of an individual who returned to Liberation Way five times in a year, called the program at that time “a revolving door.”
Liberation Way’s treatment offerings, according to the former employees and documents, included state-licensed intensive outpatient and partial hospitalization levels of care. In both situations, addicts received treatment during the day and stayed in affiliated sober living homes at night.
“The clinics that are doing IOP (intensive outpatient) that also include sober home living, that is where we are seeing the majority of fraud, waste and abuse coming from,” said Kreitman, the fraud investigator.
His work involves the use of algorithms to detect patterns of fraud or waste in large numbers of insurance payments.
The practice of bringing the same client back into the same treatment program four or five times is unethical, Kreitman said.
“There is no continuity of care when you do that,” he said. “They are keeping them in the cycle of addiction.”

State takes a look

The DDAP, unlike similar agencies in some other states, has no power to levy fines on facilities that fail to comply with regulations.
Instead, it gives centers a limited time to create acceptable plans of correction, with the ultimate threat being loss of licensure.
DDAP, which has granted more than 1,200 active licenses, has pursued litigation to close a treatment center statewide just once since 2015. Spokeswoman Ali Fogarty said that center was closed by a bankruptcy court order.
The agency received complaints about Liberation Way, researched them and made its first site visit in response to those complaints in November 2017, she said. Additional visits were made before citations were issued.
“We must work within our regulations, and we work with facilities to try to reach compliance before taking steps to revoke a license,” Fogarty said in an email.
Ron Ruman, a spokesman for the Pennsylvania Insurance Department, responding to written questions by email, said his agency only has civil, not criminal, authority to enforce insurance laws. He said it would only become involved if an insurance company or licensed insurance producer was involved in possible misconduct.
“We are not involved in the investigation of Liberation Way,” he said. “We do not license it, so we would not have jurisdiction.”

Source documents:

Read some of the documents that were used for reporting this story:

Credible testimony

In late March, Liberation Way instructed employees to bring their laptops to its distinctive pink and white building in Yardley so the hard drives could be copied.
Some individuals knew a state investigation was underway because they had been interviewed by investigators or received subpoenas.
An email from a top Liberation Way manager provided to the Eagle indicated the company was under scrutiny. The email said data had to be protected “to fully comply with the grand jury subpoena issued by the Pennsylvania attorney general’s office.”
At that point, O’Shea had left Liberation Way.
The company, she said, did not respond to her initial resignation email sent March 9.
She wrote a second email on March 13, two days after the newspaper stories appeared, and asked for a response.
“After reading both articles in the Reading Eagle, and after learning about uncorrected DDAP citations, I am very concerned about the practices of the agency and its lack of compliance with state regulations,” she wrote to Liberation Way’s human resources administrator.
O’Shea provided an email that showed the company then made her resignation effective immediately.
When O’Shea filed an unemployment claim, Liberation Way contested it.
Then, the company did not show up for the hearing before a state Unemployment Compensation Board of Review referee.
O’Shea testified there about what she had seen at the company and her concern about her professional future. The referee found in her favor.
The decision read, “The referee finds the claimant’s testimony credible.”