BANGOR, Maine — Well-known social services organization Manna Ministries owes the state $1.3 million for mismanaging an addiction recovery clinic it operated in Medway and Medicaid reimbursement overpayments, according to the Maine Department of Health and Human Services.

The state informed the faith-based nonprofit organization last year it would have to reimburse DHHS but Manna has made little progress paying the debt and is now facing a financial crisis, according to the organization’s leader.

Bill Rae, Manna’s executive director, said Friday the resulting financial problems could force him to cease badly needed in-patient addiction recovery services offered by his organization, which has an annual operating budget of $1.2 million.

The debt stems in large part from a mismanaged Medway clinic that closed in 2013 after widespread errors in paperwork and records were uncovered, according to Rae.

“It went sideways,” Rae said, citing poor oversight by the clinician Manna hired to run the facility, as well as himself.

DHHS spokeswoman Samantha Edwards did not have information available Friday on specific issues the department found when it investigated the Medway clinic, but said a Program Integrity audit uncovered several record-keeping problems. She did share documents outlining the communication DHHS has had over the past year with Rae regarding the organization’s debt.

Those communications show Rae was uncooperative in meeting to set up a plan for making good on the debt. The department sent six letters between August 2015 and March 2016, when it finally sat down with Rae at a hearing. In that time frame, DHHS says Rae canceled three scheduled meetings.

Rae said Friday that he is battling cancer, and that he was forced to cancel meetings, sometimes on short notice, because of treatments. He was diagnosed several years ago, but his condition has worsened recently, he said.

Rae said the financial fallout has led him to consider closing a pair of residential faith-focused drug addiction rehab programs operated at Manna’s Main Street headquarters in Bangor. He has approached media outlets in recent days to ask the public for donations to help dig Manna out of the hole. He says Manna has to raise $35,000 by the end of May to continue operating those clinics, which he said have helped 250 Mainers combat their addictions over the past 11 years.

“Here we are, in a huge financial hole, and trying to get out of it and the only thing we can do is go to the public and say, ‘If you believe in us and you believe in helping the people that are [in treatment here], this is what we need,’” Rae said Friday.

Eleven years ago, Manna started Derek House, a nine-month residential rehab program, and Elijah House, a 45-day program. They focus on faith-based rehabilitation and counseling, and do not offer Suboxone, methadone or other forms of drug replacement therapy.

At this point, Rae said he is considering ending only those two programs, and not the outpatient treatment, food kitchen, pantry or other services that Manna offers. He said he’ll have to make a decision in about three weeks.

“The residents that come into this building want to get clean and sober without drug replacement, without having to be addicted to something else,” Rae said. “We know it goes against the normal flow, but every single person that left here started off the journey knowing what they’re going to get when they come through here.”

The rehab services cost about $3,000 per week to operate, according to Rae.

Problems at Medway clinic

Manna’s debt stems in large part from a failed outpatient mental health and substance abuse clinic the agency operated in Medway from about 2010 to 2013.

Manna leadership allowed that clinic to operate, hiring three clinicians and a secretary, but neglected to adequately oversee its operations, Rae said. As a result, staff there made errors that went unchecked for long periods of time.

Rae decided to close the clinic, laying off the employees and bringing the records back to Manna’s Bangor headquarters.

When DHHS found out the Medway clinic had closed, it launched an investigation and audit of the facility. The department found extensive problems, ranging from missing signatures, progress notes and treatment plans to instances in which the clinic billed for six hours when they actually only had seen the patient for four, according to Rae.

“They saw neglect and lack of protocol” but no fraud, Rae said. “This is something that happened up there, and when we found what was wrong we had to shut it down, and like anything else, there’s a cost you have to pay.”

The debt comes in two areas. First is a $499,000 penalty for a Program Integrity violation. That amount was reduced from $894,000 after an appeal, according to DHHS. Rae, DHHS officials and a representative of the attorney general’s office attended that hearing, according to Rae.

A spokesman for the attorney general contacted Friday was unable to provide information about the office’s involvement with Manna.

The remainder of the debt — $825,246 — stems from Manna being overpaid by DHHS for MaineCare reimbursements. DHHS is garnishing 12 percent of Manna’s reimbursements as a result. That means a $125,000 overall reduction in state funding, which puts the future of Manna’s rehab programs in jeopardy, according to Rae.

“The Department would like to ensure that the State receives these funds as soon as possible, as they are ultimately owed to the people of Maine,” DHHS said in a letter to Rae in August 2015.

Rae is appealing to reduce the amount of debt he owes on the Medicaid reimbursement overpayments.

“We’re not contesting anything,” Rae said. “Yes, these things happened, but we’re trying to get some assistance from them.”

A decline in donations since the winter has made it difficult to make up for the lost revenue from the state, Rae said. DHHS audited the rest of Manna’s rehab and counseling operations and continues to license and fund them on the reduced level, he said.

Clients praise treatment

The loss of two rehabilitation options would be felt in a region that has been coping with the rampant spread of opiate abuse in recent years. It would mean the loss of a rarer form of treatment — one that relies on a person’s faith rather than alternative drugs such as methadone and Suboxone.

For some who want to avoid dependency on a replacement substance, that’s an attractive option. People who enter the program live at Manna during their nine-month or 45-day stay. They have their own room, participate in group meetings and activities, go to church and meet regularly with counselors who guide them through their recovery.

Joel Berry, a 21-year-old from Belfast, has been struggling on and off with alcohol and drug addiction since he was a teenager.

His substance abuse put him in a hospital bed about seven months ago. When he got out, he and his father decided he should enter rehab.

“I knew I needed a change in my life, so I started seeking after God, more than I ever have in my whole life,” he said Friday. “Now that I’m here, I just found a new way of life really.”

He has been living at Manna for 6½ months and recently started working a construction job.

He said he’d like to return to volunteer at Manna after finishing the program, to help others who have struggled like he has.

Amy, 38, who asked that her last name be withheld, said she walked into Manna on May 23, 2011, after her family said they were “done with her” and her addiction. She remembers the date easily.

“It’s the day my life changed,” she said.

She had tried to stop using drugs in the past, but ended up abusing her replacement therapy drugs, so she turned to faith-based treatment and counseling.

“I had stuff buried down deep that I needed to get through,” she said. She says she hasn’t used drugs since May 23, 2011, and she visits Manna every year on the anniversary of her “graduation” date to thank the staff, she said.

Despite testaments of its success from clients, Manna has struggled financially. Rae appealed to the public last year for $9,000 to help pay utility costs. More than double that amount was raised.

Manna’s headquarters — a historic four-story brick building at 629 Main St. that has served in the past as Beal College, an orphanage, asylum, farm and debtors prison — is up for sale and has been for about three years.

Rae said the space is too large and expensive to heat and maintain for Manna to continue operating there long term. The asking price is $975,000, and the sale of the building could go a long way toward helping pay off debts to the state, he added.

If Manna receives $35,000 in financial support from the community, Rae said he can keep the clinics open and work toward resolving his debts without losing vital addiction recovery support services in the community.

“If I can get that, it will get us over this hump,” he said. “I believe that once this community hears about what’s going on with us, my faith and my trust in this community is that they’ll want to jump on the bandwagon.”

More information is available at Manna’s website, mannamaine.org

Follow Nick McCrea on Twitter at @nmccrea213.