The Maryland Department of Health announced Thursday the pause on new licenses for certain types of addiction and mental health providers will continue for another six months as the state grapples with suspected Medicaid fraud, waste and abuse.

The moratorium, first announced in June following explosive growth of new providers, was originally set to expire at the end of this year. The affected licenses are for psychiatric rehabilitation, partial hospitalization and intensive outpatient programs.

On Friday, The Banner, in collaboration with The New York Times Local Investigations Fellowship, revealed that state officials for years failed to vet and audit addiction treatment operators properly, allowing for a flood of new programs, some of which used tactics officials described as unscrupulous and illegal.

The investigation looked into PHA Healthcare, a government-funded addiction treatment program that provided little help to its patients and put them in free housing where many relapsed and overdosed. At least 13 deaths have been linked to the program since 2022, according to The Banner/Times investigation.

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Halting the issuance of new licenses is one step the state is taking to try to address problems in the field. The health department said in a news release Thursday that it is also rewriting regulations, moving to a new vendor to process Medicaid payments, analyzing services which may be underutilized and exploring new services with lower costs.

“Quality behavioral health care for Marylanders continues to be a top priority of the Department,” Alyssa Lord, the state’s deputy secretary of behavioral health, said in a statement. “This pause is one essential part of a larger plan to ensure much-needed oversight and compliance of new provider applications and protect Marylanders in need of behavioral health services.”

Shannon Hall, executive director of the Community Behavioral Health Association of Maryland, who welcomed the news of the license pause earlier this year, said in a statement Thursday that the extension is not unexpected. With a new Medicaid payments vendor starting on Jan. 1, Hall said she believes “substantial progress toward effective provider management will be coming soon.”

Clarification: This story has been updated to clarify when the moratorium was first announced.