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Clinic will be project of Mountain States, ETSU with staff from Frontier Health

Nathan Baker • Jul 31, 2016 at 12:00 AM

A proposed opioid addiction treatment clinic will be managed and housed by Johnson City’s hospital system, but is designed to lock into East Tennessee State University’s new over-arching center to fight prescription drug abuse, a multi-pronged approach health officials say is rare.

The clinic, which at first would administer methadone and counseling services to patients, then expand services to offer prescription buprenorphine in its third year, is a joint project of ETSU and Mountain States Health Alliance under a new nonprofit corporation called East Tennessee Healthcare Holdings Inc.

Under the co-owned organization, the clinic will be the patient care wing of ETSU’s Center for Prescription Drug Abuse Prevention and Treatment, a venture announced by the College of Public Health in April to research, treat and educate the public about the region’s documented opioid dependency problem.

“In our model, there are four large components: administration, research and evaluation, education and community outreach and patient care,” Dr. Robert Pack, associate dean of the ETSU College of Public Health and executive director of the prevention and treatment center, said. “This will be the clinical side, where we will take care of patients in need of treatment, and our research shows there is significant need for this type of treatment in the area.”

Allison Rogers, Mountain States’ vice president of strategic planning, who compiled and wrote much of the 198-page certificate of need application and its three subsequent supplements for the clinic, said the health system chose this specific partnership because of its collaborative, holistic treatment model for a problem plaguing the area.

“Historically, Mountain States was asked several times to operate a traditional methadone clinic, and we said no,” she said. “The traditional model is not the answer to prescription drug abuse, but the model we have here is different. ETSU approached us with more collaborative, recovery-based, whole-person and research aspects. It’s not just a methadone delivery clinic — it provides treatment options tailored for each particular patient.”

Though the certificate of need application submitted to the state in May puts the clinic in an existing MSHA medical office building along Highway 75 in Gray, local leaders are searching for another potential site after public outcry against the facility.

If a new site isn’t found, and if the Gray site is rezoned by Johnson City Commissioners and approved by the city Board of Zoning Appeals and the state Health Services and Development Agency, the clinic will take up 7,851 square feet in the building and open in March, after renovations.

In the certification documents submitted to the state, East Tennessee Healthcare Holdings estimates an initial capital investment of $1.7 million for renovations and leasing the space. That money will initially be fronted from Mountain States’ cash reserves, which will be reimbursed using revenue from patients.

A commitment letter from Mountain States Properties Inc., included with the certificate of need application, proposes a 10-year lease of the space starting March 1. The lease’s base rent, paid to Mountain States, would be $94,212 in the first year and increase annually in proportion to the national Consumer Price Index. The lease estimates $11,776.50 for the clinic’s utilities and $11,776.50 for a janitorial services contract.

The hospital system will also manage the clinic, demonstrated by an unsigned contract also included with the application.

For a fee of 6 percent of the clinic’s monthly net revenues, Mountain States will provide accounting and budgeting services. The system plans to lease 17 full-time clinic employees to East Tennessee Healthcare Holdings by the second year, adhering to the Tennessee Department of Mental Health and Substance Abuse Services staffing requirements.

Those year-two employees include a medical director, a program director, two on-site prescribers, two registered nurses and two licensed practical nurses, a licensed therapist overseeing four unlicensed, master of social work prepared therapists, a clinical pharmacist, a psychiatric nurse practitioner, an office manager and a billing and scheduling manager. Once fully staffed, the combined annual payroll for the 17 employees is estimated at $1.3 million.

Mountain States intends to contract with Frontier Health for the five therapists, drawing from the Gray-based behavioral health provider’s decades of experience in treating substance abuse and related issues.

A supplement to the certificate of need application describes the therapists’ roles as providing therapy and case management recovery services, like helping direct patients to sources for housing, employment and other social needs. The application also states patients may be referred by clinic staff to Frontier’s more intensive drug rehabilitation program.

“Recovery is a complex term, there are crucial support services some people need during the long-term process of recovery,” Dr. Randy Jessee, senior vice president of Frontier Health’s Specialty Services, said. “Our staff is there to direct people to these wrap-around services within the region. Some people are looking at this as just a methadone clinic, but what they don’t think about is what’s required to make it more effective and give patients the best treatment long-term.”

From the clinic’s start, Pack said, ETSU researchers plan to collect data about patient demographics and the effectiveness of their treatments. Working alongside nurses and therapists in the clinic, intensive studies will suss out the best courses of treatments, and may develop new models and standards for other health professionals to follow, he said.

“We’re working at a standard to be nationally comparable with our peers,” Pack said. “ETSU’s researchers and staff will be trained to go through the proper protocols to assess treatments and realize things that are going to be able to give us data to allow us to set the clinic apart from others in the country.”

Nursing and medical students from the college will also do training rotations at the clinic, giving them new opportunities for specialities not previously available to local students.

Applying the statewide per capita rate of methadone patients to the clinic’s 11-county service area in Northeast Tennessee and Southwest Virginia, Mountain States officials project an average of 60 new patients per month in the first year. With approximately 650 patients by the end of the first year, the clinic is expected to post a loss of $326,421. In year two, the facility is projected to make $956,425 from 1,050 patients.

According to the application, the clinic will charge approximately $13 per person per day for methadone treatments, resulting in projected first-year patient revenues of $1.6 million. The company listed comparable charges of $14 to $15 per treatment at clinics owned by Behavioral Health Group in Memphis, Dyersburg, Jackson, Paris, Columbia, Nashville and Knoxville.

Insurance payers, from both private companies and TennCare and Medicare, rarely cover methadone treatments, so revenue from those sources is expected to be low, although East Tennessee Healthcare Holdings indicated intentions to pursue those avenues to the greatest feasible extent possible. The new company expects to write off 5 percent of revenues as charity care to eligible patients.

In the third year, the clinic may begin offering buprenorphine, a synthetic opioid, like methadone, used to treat addiction. The drug will be offered as a second option for patients for which the drug’s ceiling effect, or a limit to the chemical effects of the opioid, is more appropriate.

Because buprenorphine is viewed as less likely to be abused, federal and state controls on the drug are more lax, allowing physicians to prescribe it more frequently than methadone.

According to the Substance Abuse and Mental Health Services Administration’s registry of doctors authorized to treat opioid dependency with buprenorphine, 120 are licensed in the proposed clinic’s coverage area.

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