State moves to revoke license for Veterans Village

State health department regulators are seeking to revoke the license of Veterans Village of San Diego to provide residential substance abuse treatment, citing “serious concerns about client safety” there in the wake of seven deaths since 2022. 

The state has issued a temporary suspension order, cutting off reimbursements under the state Medi-Cal program, including the Drug Medi-Cal services that paid for scores of people at the Pacific Highway facility. It is effective Monday. 

A spokesperson for the Department of Health Care Services, which licenses facilities like VVSD, said in an email Thursday that the agency’s move to revoke the license was prompted by a series of incidents over the past 2 ½ years. 

“This action follows serious concerns about client safety at VVSD,” spokesperson Tessa Outhyse wrote. “Between January 2022 and October 2022, five deaths at VVSD were reported to DHCS, prompting investigations that uncovered multiple health and safety violations.”

The agency and VVSD resolved those violations by entering into a settlement agreement in March 2023. It resolved numerous complaints and death investigations, and also put the license for VVSD on probationary status with the department. 

That probation was supposed to end Tuesday.

But Outhyse wrote that two more deaths, in September 2023 and this past March, along with other “further violations” which she did not provide details on, “revealed VVSD’s failure to adhere to the agreement, leading to this licensing action.”

No one from VVSD responded to requests for comment on the state licensing action either Thursday or Friday. 

The license revocation is not effective immediately. The state has started the process to revoke the license, but VVSD can challenge that, which could take time. The temporary suspension order stops the provision of licensed services, effective Monday, while the revocation process plays out.

The state’s move against VVSD sent county officials scrambling on Thursday to find placements in other programs for more than 70 people receiving treatment. 

San Diego County has a contract with VVSD to provide Drug Medi-Cal services for adults with substance use disorder diagnoses. This year Veterans Village was set to receive $6.5 million through the end of August, county contracting records show.

Tim McClain, a spokesperson for the county Health and Humans Services agency, said that since learning of the state’s action against the license on Thursday the county has been focused on finding new locations for the Drug Medi-Cal county clients at the site. 

“The state has taken this action, and we are committed to our clients who are there, and by the end of the day Monday, having them all moved into other appropriate services and places,” he said.

A spokesman for the VA San Diego Healthcare System said late Friday afternoon that 48 vets receive substance abuse services at VVSD. The VA is talking with those veterans to give them other choices to get services.

The statement said vets can continue to stay at VVSD while getting services elsewhere, or they can move to another housing program, all funded by the VA. But the agency said it has halted funding for any new admissions, though veterans whose services were being funded through the state Drug Medi-Cal program can continue, with the VA paying.

In a series of stories beginning in 2022 inewsource has reported on troubles at VVSD, including the multiple deaths as well as staff turnover, poor conditions, and other issues. 

In the wake of the stories the county temporarily stopped sending new clients to VVSD, but resumed doing so in early 2023. 

The county has also issued corrective action notices, which detail failure to comply with one or more terms of the contract, to VVSD. The organization filed plans to correct the problems, which the county approved. 

VVSD has strongly objected to inewsource reporting, contending it was biased, sensationalized, and inaccurate, and ignored the work the group does helping thousands of veterans and non-veterans through its various programs. inewsource has stood behind its reporting and no corrections or retractions have been made.

It is not only state and county regulators who have found fault with the organization. Earlier this year a group of veterans wrote a scathing letter to the VA complaining about poor quality food, drug use on campus and lax security. 

Zach Wildey, a Navy veteran who organized the group, said Friday that state investigators were on the site in the late morning on Thursday.

“It’s an unfortunate occurrence for a lot of people,” Wildey said. “A lot of people are suffering behind this. But it’s a necessary thing I think.”

Veterans Village began in the 1980s and became a nationally recognized model for helping veterans. The organization launched the “Stand Down” program that connects homeless veterans with community resources. The now annual event has been replicated in hundreds of cities across the country. 

4:40 p.m. Friday: This story was updated to include additional information from state officials and the VA.