The trouble with rehab, Malibu-style

Times Staff Writer

Hollywood rehab can produce unhappy endings, even when the patient isn't named Lindsay or Britney.

That's what Kelly Logan learned when he sought treatment for a methamphetamine addiction at Promises Malibu, detox destination to the stars.

Logan's brother, Garfield, says he paid $42,000 up front to admit the former professional surfer for a month at Promises' canyon-top Mediterranean-style home. Five days later, he says, Promises kicked Logan out for belligerent behavior but kept all the money.

"They're scam artists," said Garfield Logan, a plaintiff in one of four consumer-rights, breach-of-contract and unfair-business-practice lawsuits filed against Promises Malibu and its Westside branch in the last year. Promises has denied the allegations.

The suits and state licensing violations reveal a little-seen side to the high-end rehabilitation centers that have become a Malibu cottage industry and -- thanks to such patrons as Promises alums Lindsay Lohan and Britney Spears -- a tabloid feeding ground.

The legal problems also reflect how the Malibu properties -- the area has one of the densest concentrations of rehab retreats in the nation, experts say -- can differ from industry norms, as represented by the Betty Ford Center, Hazelden, Phoenix House and other leaders in addiction treatment.

All of the Malibu centers are for-profit enterprises in a field dominated by not-for-profits. With luxury as a principal appeal, many charge far more than the going rate for residential care. Court records indicate that Promises' fee is more than double the $23,000 cost for a month at Betty Ford.

At the same time, Promises and fierce rival Passages Addiction Cure Center make sweeping claims on their websites about their clinical successes and reputations, purporting to have few or no equals in the world. Addiction researchers say the boasts are virtually impossible to substantiate.

In addition, Promises, Passages and other Malibu rehab firms have identified on their websites a number of psychiatrists and other physicians as staff members, even though the centers are not licensed to provide medical care.

Instead, they are limited to offering services such as detox monitoring that does not require medical treatment; group and individual counseling; and addiction education, state officials say. Over the last few years, Promises and several other centers that do business in Malibu have been cited by state regulators for providing medical services outside the scope of their licenses.

Until recently, the Promises website said the center had a medical staff led by Jack Kuo, director of psychiatry; and Robert Saltzman, medical director. The site no longer refers to a medical staff, and it describes Kuo and Saltzman as "independent affiliates" with the title "independent detox specialist."

The changes occurred after The Times inquired about Promises' operations. The center did not respond to questions about the physicians, and attempts to interview Kuo and Saltzman were unsuccessful.

Two doctors, Robert Waldman and M. David Lewis, have been listed as staff internist and psychiatrist, respectively, and sometimes "addictionologist," on the websites of at least three of the 11 centers that run rehab houses in the Malibu area. Renaissance Malibu described Lewis as an "adjunct" staffer; Waldman was listed as the "medical director" of Cliffside Malibu, but his staff designation has been changed on the website to "M.D./detox."

Bruce Moorman, intake coordinator at the Canyon, a center that identifies Waldman and Lewis as staffers, said there was nothing misleading about the characterization. "They take care of our clients," Moorman said. "They're on site more than not."

Don Grant, director of Harmony Place, whose website also lists Waldman and Lewis under the staff heading, said they do not provide medical care but "monitor the detox" of patients. The state cited Harmony in 2005 for advertising "medical detoxification services" on its website and contracting with physicians.

Grant said Harmony now strictly adheres to the state rules and that Waldman and Lewis are part of the center's "ancillary staff."

"They are not paid by us," he said. "Our clients contract with them independently."

Asked about the website staff listings for several Malibu centers, Lisa Fisher, spokeswoman for the state Department of Alcohol and Drug Programs, which licenses the firms, said the agency planned to investigate. "There should be no medical staff," Fisher said. "No medical services."

Fisher said the Malibu centers are allowed to recommend doctors to patients but that they should not create the impression that they have in-house physicians available to prescribe and administer drugs or provide other types of medical care.

Similarly, physicians are permitted to serve as counselors at rehab centers, but even in that role, they must refrain from practicing medicine as staff members, said Rebecca Lira, deputy director of licensing and certification for the alcohol and drug department. "I have never seen a physician who is only a counselor," Lira said.

Since 2002, the state alcohol and drug agency has cited nine of the centers that operate in Malibu for a total of about 20 substantiated licensing violations, records show. These included improper administering of medications and TB tests; contracting with physicians; operating beyond patient capacity; failing to have staff members trained in first aid and cardiopulmonary resuscitation; and for an employee's having sex with a patient.

State officials said the problems were corrected.

By contrast, the four Phoenix House centers for adults in Los Angeles and Orange counties -- which together have about 230 beds, compared with 167 in Malibu -- have received no citations in that five-year period.

Malibu Ranch Treatment Center closed in January after regulators said they found that alcohol and illicit drugs had been taken onto the premises; it had no licensed or registered counselors; staff members did not supervise residents; it exceeded its treatment capacity; and its sewer line was clogged.

Malibu Ranch director Jerry Schoenkopf said the violations were technical.

"We didn't close down because we were running a substandard treatment center," he said. "We were having economic problems."

Schoenkopf said his center was an affordable alternative in Malibu, with a monthly fee of $15,000, and that it treated many low-income patients free of charge.

In recent years, clean and sober retreats have mushroomed in the privileged environs of Malibu. The firms licensed in Malibu operate more than two dozen rehab houses there. Some are clustered in adjoining or nearby residences.

"What is taking place in Malibu is rather unique," said Michael Cunningham, chief deputy director of the state alcohol and drug department. He said most communities have a dire shortage of rehab beds. "Clustering is not the norm."

Some of the Malibu centers are known for lavish accommodations, including 500-thread-count sheets, gourmet meals and ocean views. Passages offers multiple mansions; marbled baths; 65-inch flat-screen televisions; and massage, acupuncture and hypnotherapy rooms.

Many of the Malibu firms typically demand a month's payment in advance and refuse to refund any portion if the patient leaves treatment early or is expelled. No-refund policies at more traditional centers often apply to just part of the fee -- $5,000 in the case of Betty Ford, for example.

Cynthia Moreno Tuohy, executive director of NAADAC, the Assn. for Addiction Professionals, said such no-money-back rules are an exception and "a shame."

"People do leave programs, they do get expelled from programs when they act out," said Tuohy, whose organization has about 11,000 members. "That's not a reason not to be reimbursed for services that aren't received. It's important not to take advantage of someone who is ill."

Promises and other centers say the stringent financial terms motivate patients to complete their treatment and are spelled out in admissions contracts.

Promises lawyer Gerald Sauer said that when patients leave early, the balance of the month's payment is retained for their use if they check back in, or the money is sometimes transferred to other rehab centers where the patients seek treatment. "No one is losing any money," he said.

But former patients and their relatives who have taken Promises to court maintain that the company intended to unjustly enrich itself at their expense by refusing to refund any money, no matter how short the patients' stay.

"They get people at their most vulnerable point to turn over huge sums of money," said Michael Parks, a lawyer for a former patient identified only as John Doe, a 50-year-old lawyer and alcoholic who sued in July. "Promises has a double standard of caring for celebrities first, at the expense of regular people."

The suit accuses Promises of evicting the plaintiff after a week -- and keeping the balance of his $49,000 payment -- because of false claims that he had made a "sexually inappropriate remark" to an unnamed celebrity patient.

The Promises staff tolerated "racially insensitive comments" by a celebrity, the suit alleges. Promises denied the allegations. A hearing is set for November.

Tucky Masterson said she wasn't in her right mind when she paid about $35,000 for a month at Promises. "I was on heroin," she said.

Masterson left Promises after two stays that totaled about a week, according to a suit she filed in 2003. She said she eventually received $15,000 in a settlement, minus legal fees.

"I was treated at Hazelden -- I was there for three days -- and they charged me to the penny for those three days," said Masterson, 48, who runs a sobriety house for women in Huntington Beach. "With Promises, I had to fight tooth and nail to get any money back."

Her story mirrored those of other plaintiffs and their relatives.

Sauer said Promises did nothing wrong. "Just because someone files a lawsuit, does that mean anything?" he asked.

In 2004, the state cited Promises for providing medical services, administering TB tests and having doctors conduct physical exams at its Westside location, all of which it was not licensed to do, records show. Fisher, of the state agency, said Promises stopped the practice as a result.

Promises founder and Chief Executive Richard Rogg declined through a publicist to be interviewed for this article.

Among the other Malibu rehab centers with no-refund policies are Renaissance, whose website features a testimonial by actor Daniel Baldwin, and Passages, which counts fashion designer Marc Jacobs among its graduates.

"If you leave, your money stays," said Passages co-founder Chris Prentiss, who added that the center immediately resells the vacated bed -- the monthly cost is $67,550 -- and that returning patients must wait for the next opening. Their payment stays on account, he said.

In the last six years, Prentiss said, only seven patients have departed early and failed to complete treatment later.

In 2005, the state cited Passages for exceeding its patient capacity. The center complied with a corrective order, Fisher said.

Passages says on its website that it has the "highest cure rate in the country" and is "renowned as the most successful alcohol rehab and drug treatment center in the world for many reasons."

Addiction researchers have criticized Passages for saying that it cures patients. "A cure? That's pretty good," Scott Walters, a University of Texas School of Public Health professor, said facetiously. Walters co-wrote a landmark 2001 study on treatment success rates. "People have been making claims about successful treatment since the dawn of time, since the snake-oil salesmen," he said.

Prentiss says his center eliminates dependencies by treating their underlying causes -- depression and anxiety, for example -- through intensive one-on-one therapy. Passages also disdains Alcoholics Anonymous' 12-step program, which Promises and other Malibu centers have adopted or adapted.

"We have an 84.4% success rate since we opened our doors in 2001, the highest in the world," Prentiss said.

Not to be outdone, Promises declares on its website that it is designed for "anyone wanting the finest rehab program in the world."

Promises attorney Sauer did not respond to questions about the basis of those statements. The center also declined to put The Times in contact with former patients who could provide testimonials.

"Anybody can make any claim they want and get away with it," Walters said. "It's essentially an unregulated industry."

paul.pringle@latimes.com

Times researcher John Tyrrell contributed to this report.

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