Abrupt closure of one of Minnesota’s largest peer recovery providers leaves hundreds in limbo

One of Minnesota’s largest peer recovery service providers shut down this month amid fraud allegations, leaving roughly 1,000 clients — and hundreds of staff — in the lurch.

State officials and providers across Minnesota are racing to fill the gaps left by the abrupt closure of Minneapolis-based Kyros. The for-profit technology company had a staff of hundreds of peer recovery specialists who lived through addiction and provided services, including one-on-one mentoring and helping people access resources from housing to employment.

“I am really worried about the people who are going to fall through the cracks here,” said Philip Rutherford, who helped start peer recovery in the state a decade ago and works at the National Council for Mental Wellbeing.

“We’re talking about people who are trying to navigate substance abuse disorder. ... We have to go the extra mile to get them the resources they need.”

Kyros also offered telehealth services and virtual substance use assessments — a first step in getting someone Medicaid-covered treatment. Many other recovery organizations relied on the company’s digital platform to run their businesses.

The state Department of Human Services (DHS) inspector general said this year that the department was investigating Kyros and an affiliated nonprofit, Refocus Recovery. Kyros clients said their insurance was billed for services they did not receive, and a series of KARE 11 stories put a spotlight on questionable practices at the company.

Refocus Recovery submitted claims for 1,418 clients for July and August, a DHS spokesman said.

DHS halted payments to the nonprofit this month. Refocus Recovery has suspended work and “our whole mission set is up in the air right now,” said Matt McLane, the nonprofit’s managing and interim executive director.

He said the nonprofit has canceled its service agreement with Kyros and has been an “open book.” McLane said Refocus Recovery has long cooperated with the state but that DHS did not work with the service to ensure an orderly outcome.

“They could have said, ‘Hey, we’re about to do a suspension because of these suspicious billings, but we know that you are the largest provider of peer services in Minnesota and we’re concerned about the clients. What can we do to wind these down during this suspension period?’” McLane said.

“They did none of that, and when we reached out and asked them, ‘What we can do?’ They just went silent on us.”

According to a voicemail at Kyros’ office, the company closed its Minneapolis headquarters Sept. 19. Its website also lists a program in Ohio.

“This decision did not come without concern for our assessors, peers and the clients we serve. The impact to lives with this decision breaks our heart,” the automated message says.

DHS has created a list of support resources to help former Kyros and Refocus Recovery clients, and is talking with the organizations’ lawyers about how to help clients transition to new providers, a department spokesman said. DHS is also making a long-term plan for supporting people affected by the sudden closure.

Nearly 30 nonprofits are trying to help those people, said Wendy Jones, executive director of Minnesota Alliance of Recovery Community Organizations. The group created a spreadsheet of other organizations that help in recovery, and noted whether they are hiring.

The alliance held a town hall meeting Thursday where substance-use disorder providers, including former Kyros peer recovery workers, discussed what is needed in the aftermath of the closure and long-term changes they want see in the field. DHS and other state officials participated, including Rep. Luke Frederick, DFL-Mankato, who said lawmakers could make further changes around peer recovery next session.

Several recovery providers said Kyros’ closure not only destabilizes those relying on peer support, but the workers providing it — some of whom are only a year into recovery.

Kyros hired many of its peer recovery workers as contractors, not full-time employees. That means they likely won’t qualify for unemployment insurance, said Marla Beaty of the state’s Department of Employment and Economic Development. But she said people should still apply, and added that they could qualify for a dislocated worker program that aims to get people re-employed fast.

Emanuel Roberts said he worked with Refocus Recovery as a trainer for about two years and was “shocked” by how quickly operations stopped. The nonprofit offered free training for people to become certified peer recovery specialists, an unusual move in the industry. Roberts said he’s volunteering to continue training for some people who had signed up.

“It wasn’t their fault that the organization shut down,” he said. “You never know if that could be somebody’s first gig out of recovery, or the only way they could survive.”

Many people doing good work have been displaced, said Tiffany Neuharth, executive director of Rise Up Recovery. That organization held a virtual event Thursday where she encouraged Kyros employees to apply for a job with it.

Organizations want to be a safety net for some Kyros employees, she said, but also stressed that they need to be cautious not to perpetuate problems in the field.

“In the wake of a really, in some ways for a lot of folks, devastating situation that happened, you are also seeing the beauty and the heart of recovery and the recovery community,” Neuharth said. “That’s us coming together to support each other and to make sure lives aren’t lost and livelihoods are saved.”