Last year, then-Maryland Health Secretary Laura Herrera Scott promised changes to the state’s troubled drug addiction treatment system. She said they would begin with a long overdue rewrite of regulations, which she said lacked “teeth” for authorities to act.

But so far changes to strengthen oversight are a work in progress.

“Without decent regulations, you’re basically designing a system that’s set up to fail,” said Spencer Gear, a former state official who oversaw licensing and compliance for the Behavioral Health Authority until his retirement a year ago.

On Wednesday, the Maryland Department of Health marked one step forward by releasing its latest proposed regulations for drug addiction and mental health treatment programs. Final approval for any new regulations, however, would take months to complete.

The proposals come after a state health department report last week detailed mixed progress in its effort to create a more robust system to oversee treatment programs and protect patient safety.

The report published Friday was mandated by Maryland lawmakers in response to a 2024 investigation by The Banner and The New York Times revealed the state had failed to properly vet and inspect programs it helps fund. In one case, a program called PHA Healthcare received millions of Medicaid dollars a year as it placed patients into dilapidated and drug-ridden housing, where many overdosed and some died, including a 1-year-old boy who starved, reporters found.

The state’s regulations of these treatment providers were last updated in 2015, according to the report, though critics have long described them as “vague and confusing.” The new report revealed the effort to improve the regulations has been delayed because treatment providers and their trade associations voiced concerns about proposed staffing requirements, among other issues, in a previous draft.

Craig Lippens, president of the Maryland Addiction Directors Council, said providers previously were not given a chance to review a full version of the proposed regulations and fear any abrupt changes to the treatment system could “result in tragic public health consequences.”

The changes proposed to the regulations could be finalized by the summer, according to the report.

Lippens said he is also worried because the Maryland Department of Health is severely understaffed, which could hobble the ability of the state to enforce its new rules.

Despite the delays for new regulations, there has been progress in other areas, according to the report.

In April, the state created new civil monetary penalties, another tool it can use to fine treatment providers that break laws and regulations.

And starting in January officials will step up oversight and monitoring of state-certified recovery residences, which house people trying to stay off drugs.

The state will begin tracking data about such programs and increase audits and in-person site visits, according to the report. As of September, there were 285 recovery residences with more than 2,700 certified beds in Maryland.

There are many more houses for people in recovery from addiction that are not tracked by the state. Patient advocates have long warned that some operators of these unsanctioned residences, including those that were run by PHA Healthcare, have engaged in fraud and exploitation.

The report issued Friday did not describe efforts, if any, to address these recovery residences that officials have said are outside of state oversight. But language in the new draft regulations proposed by the state on Wednesday indicates that officials may be interested in certifying all recovery residences in the near future.

The state health department also began working more closely with investigative partners to root out bad actors, the report said.

Last month, the state extended its ban on some types of new drug and mental health treatment providers seeking to receive funding through Medicaid. The state said it imposed the ban, which has been in effect since July 2024, to crack down on suspected fraud after new programs flooded the system.

Authorities have started monitoring programs more closely, stepping up the number of audits and unannounced site inspections.

This year, the Maryland Attorney General’s Office announced the first prosecution in the crackdown on behavioral health providers, which involved a multimillion-dollar Medicaid fraud scheme that used stolen identities, fake patient records and forged signatures.

Through tips, the report said, state health authorities identified 79 credible complaints of potential fraud, waste and abuse. Since July 2024, more than 100 cases have been referred to the health department’s inspector general for investigation.

Of those, five have been moved to an Attorney General’s Office unit that specializes in prosecuting Medicaid fraud, according to the report. The office did not immediately respond to a request for comment Wednesday.

It’s hard to say how big a difference the state’s efforts have made.

Benjamin Toney, executive director of Valley/Bridge House, a Baltimore residential treatment program for men, said he frequently hears from patients about illegal practices at other programs.

Last month, two men asked Toney for $150 gift cards, similar to incentives handed out by some other providers seeking new patients, he said. When Toney declined, explaining it’s illegal for operators to entice people to enroll at specific programs with money or gifts, they refused to enroll with Valley/Bridge House.

“All you need is one bad player to give a bad name to all of us,” Toney said. “Most of us are in the business of really helping people, and some are in it just for the revenue.

“I just hope the state can do something about it,” he added.