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Morningside ends another legal fight

After dropping its appeal of a ruling barring rehab homes from Newport, the company settles with the state over licensing dispute.

April 23, 2014|By Jeremiah Dobruck

A Newport Beach-based chain of rehabilitation centers that had been under fire from state regulators for years has agreed to pay a $75,000 settlement and limit its control over residents in its sober-living homes.

Until Tuesday, Morningside Recovery had been battling the state in court over allegations that it was running unlicensed residential addiction treatment centers in Orange County.

The California Department of Alcohol and Drug Programs argued that Morningside essentially combined its seven sober-living homes in Newport Beach and Costa Mesa with three licensed rehab homes and an outpatient treatment center in Costa Mesa to skirt licensing requirements.

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Group homes for recovering addicts do not require state approval, but residential facilities that offer recovery treatment must be licensed.

Under a settlement signed in December, Morningside agreed to draw a clear line between its sober-living facilities and outpatient treatment.

"Under the terms of the settlement agreement, Morningside will stop requiring clients who stay at its residential locations to participate in treatment services offered at its non-residential clinic," said Carol Sloan, a spokeswoman for state Department of Health Care Services, which absorbed the California Department of Alcohol and Drug Programs.

No longer will there be "package deals" for recovery treatment and lodging in one contract, according to the agreement.

Morningside is not even allowed to use the words "residential treatment" or "residential rehabilitation" when referring to itself, according to the terms.

The $75,000 settlement will be paid to the state. The pact also requires that the rehab chain refrain from managing its clients' schedules, prescriptions and access to personal belongings.

In 2012, the state revoked Morningside's licenses to operate the three residential treatment centers in Costa Mesa, alleging it mismanaged prescriptions and offered medical services it wasn't authorized to perform.

But the settlement allows Morningside to keep its separate license for outpatient treatment, as long as it complies with probationary requirements.

The authorization can be revoked at any time during the next five years if Morningside breaks any conditions of the settlement. It must also submit to unannounced inspections by regulators.

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