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Nashville partners enter into agreement to purchase Watauga Recovery Centers

Zach Vance • Aug 17, 2018 at 9:11 PM

One of the region’s largest opioid addiction recovery centers will soon be under new ownership.

Nashville-based healthcare attorney Lee Dilworth and healthcare executive David Dempsey have entered into a definitive agreement to buy Watauga Recovery Centers and its seven clinics in Johnson City, Knoxville, Morristown and Newport, Tennessee, and Abingdon, Duffield and Wytheville, Virginia.

Dilworth and Dempsey’s buprenorphine-assisted treatment clinics will be called VIDA Recovery Centers. The sales price of the transaction was not disclosed.

“This is the right move at the right time — for our patients, our staff and physicians” Dr. Tom Reach, Watauga Recovery Center founder and medical director, said in a press release announcing the transaction.

“Watauga has always been about offering hope and recovery to patients, and these changes will further its mission for years to come.”

After the sale, Reach will pursue other professional interests, the release stated.

Like thousands of Tennesseans across the state, Dilworth’s life was personally touched by the opioid epidemic. Three young men, all family friends of Dilworth’s, either died directly or indirectly because of painkiller prescriptions.

“They were all three young men that we knew. Each of their stories started with opioids, and eventually that led to their deaths,” Dilworth said.

“People are just now getting an understanding about opioid addiction that they didn’t have before. You don’t have to think when it doesn’t impact your lives, but now it’s affecting lives in all sectors. And that happened to me.”

Those experiences led Dilworth on a crusade to understand the opioid epidemic.

“I read a lot about the epidemic, the numbers and all that, and then I began to look at the treatment side of it,” Dilworth said.

“When I looked at the treatment side of it, I began to network and travel across the state, talking to people who were involved in various aspects of the treatment, whether it was abstinence, MAT (medication-assisted treatment) or residential. I took what I call a ‘deep dive.’ I went on a learning tour, and eventually, that got me to Watauga (Recovery Centers).”

Dilworth said the transition in ownership will be smooth, and the clinics will not be closed at all. VIDA plans to keep all employees of Watauga Recovery Centers and its 2,000-plus patients.

“For current patients, it will be business as usual. Their same doctors and counselors are going to be here,” Dilworth said. “I look forward to partnering with them in their recovery. We’re going to come alongside them, and support them with evidence-based protocols.”

In addition to providing patient-centered treatment, Dilworth said one of VIDA’s top priorities will be accepting insurance, including TennCare, Virginia Medicaid and commercial payers. Currently, very few buprenorphine providers in the Tri-Cities accept health insurance, as most operate under a cash-only model.

“It’s going to be one of our top-three priorities as soon as the sale closes. How many months that takes? I don’t know, but we’re going to start immediately on that process of getting credentialed,” he said.

VIDA also has plans to eventually expand its number of clinics.

“We intend to grow to be a much larger company. We’re going to start with the seven clinics here, but we intend to eventually grow with more clinics in more states,” Dilworth said.

One of the faces of addiction treatment in the Tri-Cities, Reach opened the first Watauga Recovery Center on East Watauga Avenue in June 2010. Reach himself struggled with addiction and found access to treatment difficult in the Tri-Cities, according to a brief biography posted on the Watauga Recovery Centers website.

Once sober, Reach practiced family and emergency medicine for a time before opening that first addiction recovery clinic, which centered around a “12-step recovery model.” In the eight years since, his company has continued to grow.

In May 2018, a number of Reach’s clinics and his home were raided by the Drug Enforcement Agency, who were reportedly searching for anything related to Medicaid or Medicare, banking records, medical records and anything related to the distribution of drugs or misbranding of drugs.

Reach claimed his treatment centers never accepted Medcaid or Medicare and do not file insurance claims, although some patients are reimbursed for their medications.

“This wasn’t necessary,” Reach said at the time. “There were no charges and no one was arrested. We have done absolutely nothing illegal, immoral or unethical.”

The DEA investigation is ongoing, and Dilworth said he does not expect the raid to impact the transaction.

The sale is expected to be finalized this fall.

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