Key Takeaways
- Residential SUD treatment addresses the acute phase of addiction but was not designed to deliver longitudinal continuing care. Most providers have historically asked patients to navigate recovery in the same environments where their addictions developed, without structured support.
- Clinical research shows the gap matters significantly. A 2021 meta-analysis in Social Science and Medicine found sustained post-discharge support was associated with substantially greater abstinence rates. A separate analysis in Psychiatry found that patients engaged in outpatient treatment for nine months or more had abstinence rates approaching 72 percent at twelve months, compared to roughly 37 percent for those participating for only three months.
- Recovery Centers of America’s hub-and-spoke strategy addresses that gap with standalone outpatient locations embedded in the communities where discharged patients live. RCA has opened spokes in Rolling Meadows, Illinois, and Newark, Delaware, with a Fairfax, Virginia, location forthcoming. Each spoke is connected to, but geographically separate from, one of the company’s twelve inpatient hubs.
- The addiction treatment sector remains heavily fragmented. SAMHSA’s 2024 National Substance Use and Mental Health Services Survey counted more than 21,000 eligible facilities, with infrastructure for delivering longitudinal care across multiple settings still lagging behind the clinical consensus on what patients need.
- Deerfield Management’s sustained investment since 2015 distinguishes RCA’s capital situation from shorter-horizon PE-backed competitors. CEO Brett Cohen described the spoke model as demanding patient capital: outpatient locations generate lower per-visit revenue than inpatient beds, and their value lies in downstream metrics including retention and payer relationships.
- Outcomes measurement remains the sector’s unresolved challenge. Cohen acknowledged “limited consensus” on what to measure and inconsistent measurement integrity across providers, calling readmission-rate-only tracking “shortsighted, though not wrong.”
- RCA’s September 2025 in-network agreements with Optum covering Indianapolis, Greenville, and New Jersey facilities represent a first step toward the value-based contracting Cohen sees as the long-term goal. The hub-and-spoke model, if it generates the longitudinal patient data the industry has lacked, could eventually enable payment models that reward outcomes rather than volume.
The residential addiction treatment industry was built to stabilize people in crisis. Large inpatient campuses offering medically monitored detox and round-the-clock clinical care became the standard model for providers treating substance use disorders, and for good reason: the acute phase of addiction, marked by withdrawal, medical risk, and psychological volatility, demands intensive intervention. But the model has always carried an implicit limitation. Residential treatment addresses the beginning of recovery. What happens after discharge, when patients return to the environments where their addictions developed, has historically fallen outside the scope of what most providers were designed to do.
The clinical literature has reinforced that gap for years. A 2021 meta-analysis published in Social Science and Medicine found that sustained support after discharge from residential treatment was associated with significantly greater rates of abstinence compared to shorter treatment episodes. A separate analysis in the journal Psychiatry found that patients who regularly participated in outpatient treatment for nine months or more had abstinence rates of nearly 72 percent at the twelve-month mark, compared to roughly 37 percent for those who participated for only three months. Research from the Recovery Research Institute has noted that approximately 1.3 million Americans receive care in a residential treatment setting each year, representing about a third of those seeking treatment, yet many do not participate in any continuing care after discharge and face heightened risk of relapse.
Recovery Centers of America, a national SUD treatment provider backed by the healthcare investment firm Deerfield Management, was not immune to those dynamics. Founded in 2014 and built around large inpatient campuses in the Northeast, Mid-Atlantic, Midwest, and Southeast, RCA spent much of its existence operating what its CEO, Brett Cohen, described as a “very much inpatient-centric business.” Cohen, who joined RCA as chief executive in 2023 after eight years as COO of Sevita, formerly The MENTOR Network, said the company has spent the past two years deliberately building what he called its “outpatient muscle”: a reorientation away from the acute-phase model and toward something more durable.
The result is a hub-and-spoke strategy that RCA sees as its answer to the post-discharge problem: a network of standalone outpatient locations planted in the communities where patients actually live, connected to, but geographically distinct from, RCA’s twelve inpatient hubs.
How Recovery Centers of America’s Hub-and-Spoke SUD Model Works
The concept borrows its name from a framework that gained national prominence in public health through Vermont’s opioid treatment system. Beginning in 2013, Vermont built a statewide network of regional hub clinics offering intensive medication-assisted treatment for opioid use disorder, connected to smaller spoke sites in primary care offices and community health settings. By 2017, the state had the highest per-capita capacity for treating opioid use disorder in the country, and the model had been replicated in Washington state and California with federal support from SAMHSA.
RCA’s application of the framework differs in scope and clinical focus. Rather than organizing around medication prescribing for a single substance category, RCA uses the model to bridge the gap between residential treatment and sustained outpatient engagement across the full spectrum of SUD care. Each of the company’s twelve inpatient facilities serves as a hub, offering detox through intensive outpatient programming. The spokes are smaller, standalone outpatient centers positioned in communities where discharged patients live and work.
“When patients are moving into outpatient, it’s really hard for them to continue going back to that location three or five days a week to get care,” Cohen said in an interview with Acuity Media Network. “They can go back to their homes, start engaging in their lives, their jobs, their families, their schools, but also get easy access to care that’s part of that same continuum.”
RCA has opened spokes in Rolling Meadows, Illinois, and Newark, Delaware, with a Fairfax, Virginia, location forthcoming. The Rolling Meadows site, which opened in mid-2025 as RCA’s third location in the Chicagoland area, can support more than 350 patient visits per week across group counseling, individual therapy, family support, and medication for addiction treatment.
The Addiction Treatment Sector Is Reckoning with Its Episodic Care Model
RCA’s expansion into satellite outpatient reflects a broader reckoning across the residential SUD sector about whether the prevailing treatment model adequately addresses what clinicians and researchers increasingly describe as a chronic condition. The traditional approach: admit, stabilize, discharge, mirrors the episodic care models used in acute medicine. But addiction, like diabetes or hypertension, tends to recur. Patients who leave residential settings without structured continuing care face the highest risk of relapse during the first ninety days, a period when neural pathways associated with substance use remain strong and new behavioral patterns are still fragile.
The challenge has not been a lack of clinical awareness. The American Society of Addiction Medicine’s patient placement criteria have long recommended stepdown care following residential treatment, and research consistently shows that combining formal outpatient programming with community-based support groups produces better outcomes than either intervention alone. The obstacle has been structural: most residential providers were not built to deliver outpatient care at scale, and the ones that were often asked patients to return to the same campus where they received inpatient treatment, sometimes hours from home.
Cohen drew a direct comparison to the traumatic brain injury field, where he spent years building services at Sevita. “When we started building the brain injury and traumatic brain injury services at Sevita, it was a fairly immature industry,” he said. “Fragmented provider community, lots of really passionate people who wanted to provide good care, but they lacked sophistication. They lacked resources.” He sees similar dynamics playing out in addiction treatment, an industry he described as still in its “early innings.”
That description carries some empirical weight. SAMHSA’s 2024 National Substance Use and Mental Health Services Survey counted more than 21,000 eligible substance use and mental health treatment facilities across the country, a landscape that remains heavily fragmented among small, independent operators. The addiction treatment sector has professionalized rapidly over the past decade, driven by the Affordable Care Act’s inclusion of SUD treatment as an essential health benefit and by growing private equity investment in behavioral health, but the infrastructure for delivering longitudinal care across multiple settings still lags behind the clinical consensus about what patients need.
Private Equity, Patient Retention, and the Capital Behind Outpatient Expansion
Building outpatient satellites requires capital, and Cohen was candid about the role private equity has played in making it possible. Deerfield Management, which first partnered with RCA in 2015 and has been a sustained investor in the company since its founding, is among the largest private backers in the addiction treatment space. Cohen described Deerfield as “a great firm to work with” that “sees a need for ongoing investment in high-quality behavioral health care.”
The comment carried an implicit contrast with PE firms that have drawn criticism for short investment horizons in behavioral health platform building. “The PE firms that are patient and able to invest for the long term are really making a difference,” Cohen said. “If a PE firm is looking to turn it around quickly and flip a company, I don’t think that’s helpful.”
The hub-and-spoke model tests that patience directly. Outpatient locations generate lower per-visit revenue than inpatient beds, and their value lies less in immediate returns than in downstream metrics: patient retention, readmission avoidance, and payer relationships anchored in demonstrated continuity of care. RCA now operates across fifteen locations, with the majority offering outpatient services at the same site as inpatient facilities. Whether the spoke model produces outcomes at a scale that justifies continued capital deployment remains the central question for both the company and the investors backing it.
Outcomes Measurement and the Path to Value-Based Addiction Treatment Contracting
RCA’s spoke strategy addresses the geographic gap in post-residential care, but it does not resolve a deeper challenge that has dogged the industry for years: measuring what actually works. Cohen acknowledged that “there’s limited consensus on outcomes” across the sector, and that even where providers agree on what to measure, “the integrity and consistency of how it’s measured varies across providers.” Readmission rates, the metric payers most commonly track, he called “shortsighted,” though “not wrong.”
The measurement gap matters because it constrains the next step Cohen envisions: value-based contracting with commercial payers. He suggested that in-network relationships, which RCA expanded significantly in September 2025 through agreements with Optum covering its Indianapolis, Greenville, and New Jersey facilities, could eventually enable payment models that reward outcomes rather than volume. “You can start thinking differently about what that looks like and really differentiate based on quality,” he said. “Think about value-based contracting or different payer structures that you can’t achieve in an out-of-network model.”
The hub-and-spoke model, if it functions as designed, could eventually generate the kind of longitudinal patient data the industry has struggled to produce. A patient who moves from detox to residential to partial hospitalization to intensive outpatient within a single provider’s ecosystem creates a continuous clinical record far more useful to payers than a discharge summary from a standalone residential facility. Vermont’s experience offers a partial precedent: its hub-and-spoke system for opioid treatment generated enough claims and clinical data to demonstrate that healthcare costs for patients receiving medication-assisted treatment were lower than for those with opioid addiction who were not in treatment, even after accounting for the cost of treatment itself. The growing application of AI-driven analytics in behavioral health could eventually accelerate that kind of longitudinal insight for providers like RCA.
Whether RCA or anyone else can convert that kind of data into value-based arrangements that reshape how addiction treatment gets paid for will determine whether the hub-and-spoke model represents a genuine structural shift or simply a more expensive way to deliver care that still gets reimbursed on a fee-for-service basis. For now, the spokes keep opening, and the patients keep coming home.
How Stigma Functions as an Economic Barrier to Addiction Treatment Funding
Cohen repeatedly returned to stigma as both a cultural barrier and a financial one. “Historically there’s been a lot of stigma,” he said. “Not just from the investor community or the payer community, but from neighbors and family and friends. It’s not something that’s often talked about because it’s historically been seen as a weakness, which it’s not. It’s a true illness.”
The framing matters beyond rhetoric. Stigma shapes reimbursement policy, zoning decisions, legislative priorities, and employer willingness to fund robust behavioral health benefits. When RCA was building its early campuses, the company encountered legal challenges from communities resisting the placement of treatment facilities in their neighborhoods, a pattern well documented across the industry. To the extent that the twelve-dollar argument reflects reality, the gap between what the data suggests and what the market delivers functions as a rough measure of what stigma costs the system.
Closing that gap may require more than better data, though better data would help. It may require the kind of structural shift that Cohen and other industry leaders have described: moving addiction treatment from a siloed, out-of-network, episodic model into the mainstream of American healthcare, where it can be measured, benchmarked, and paid for on the same terms as the chronic conditions it most closely resembles. The twelve-dollar figure has been making the case for years. What remains to be seen is whether the institutions that finance healthcare are finally ready to test it.
Frequently Asked Questions
What is the hub-and-spoke model in addiction treatment?
The hub-and-spoke model in addiction treatment is a care delivery framework in which a central facility (the “hub”) providing intensive services is connected to satellite locations (the “spokes”) embedded in surrounding communities. The model originated in public health and gained national recognition through Vermont’s opioid treatment system, which beginning in 2013 connected regional clinics offering intensive medication-assisted treatment for opioid use disorder to smaller spoke sites in primary care offices and community health settings. By 2017, Vermont had the highest per-capita capacity for treating opioid use disorder in the country. Recovery Centers of America adapts the framework to bridge the gap between residential SUD treatment and sustained outpatient engagement across the full spectrum of substance use disorders, rather than organizing around medication prescribing for a single substance category.
How does Recovery Centers of America’s outpatient expansion work?
RCA operates twelve inpatient facilities that serve as hubs, offering services from detox through intensive outpatient programming. The company has opened standalone outpatient spoke locations in Rolling Meadows, Illinois, and Newark, Delaware, with a Fairfax, Virginia, site forthcoming. Each spoke is positioned in the community where discharged patients live and work, allowing them to continue structured care, including group counseling, individual therapy, family support, and medication for addiction treatment, without traveling back to the inpatient campus several times per week. The Rolling Meadows location, opened in mid-2025 as RCA’s third Chicagoland facility, supports more than 350 patient visits per week.
Why is residential SUD treatment alone considered insufficient for long-term recovery?
Addiction research increasingly frames substance use disorders as chronic conditions that recur without sustained intervention, rather than acute events that resolve with a single treatment episode. Patients who leave residential settings without structured continuing care face the highest risk of relapse during the first ninety days after discharge, when neural pathways associated with substance use remain strong and new behavioral patterns are still fragile. A 2021 meta-analysis in Social Science and Medicine found that sustained post-discharge support was associated with significantly greater abstinence rates. A separate analysis found that patients engaged in outpatient treatment for nine months or more had abstinence rates approaching 72 percent at twelve months, compared to roughly 37 percent for those in treatment for only three months. The American Society of Addiction Medicine’s patient placement criteria have long recommended stepdown care following residential treatment, but most residential providers were not structurally designed to deliver it at scale.
How does private equity investment affect the long-term viability of SUD treatment models?
Investment horizon matters considerably for models like RCA’s hub-and-spoke strategy, where the financial payoff lies in downstream metrics such as patient retention and payer relationships rather than immediate per-visit revenue. Deerfield Management, RCA’s primary backer since 2015, has maintained a sustained investment stance that Cohen explicitly contrasted with PE firms oriented toward quick exits. The broader behavioral health sector has seen significant private equity consolidation, with mixed results for models that require long-term capital commitment. Cohen’s assessment was direct: “The PE firms that are patient and able to invest for the long term are really making a difference.” The hub-and-spoke model’s value depends on demonstrating outcomes over time, which requires investors willing to wait for those metrics to materialize.
What is value-based contracting in addiction treatment, and why is it difficult to achieve?
Value-based contracting in addiction treatment would tie reimbursement to measurable patient outcomes, such as sustained abstinence, reduced readmissions, or functional improvement, rather than paying for volume of services delivered. The model is appealing in theory but structurally difficult in a sector where there is “limited consensus on outcomes,” as Cohen acknowledged, and where “the integrity and consistency of how it’s measured varies across providers.” Most addiction treatment reimbursement today remains fee-for-service, and payers most commonly track readmission rates as a proxy for quality, a metric Cohen called “shortsighted, though not wrong.” RCA’s September 2025 in-network agreements with Optum are a prerequisite step: in-network relationships create the data infrastructure and payer alignment that could eventually support more sophisticated analytics-driven payment models. The hub-and-spoke model, by keeping patients within a single provider ecosystem from detox through intensive outpatient, could generate the longitudinal clinical record that value-based arrangements require.
How does Vermont’s hub-and-spoke model differ from RCA’s approach?
Vermont’s hub-and-spoke system, launched in 2013, was designed specifically to expand access to medication-assisted treatment for opioid use disorder, organizing hub specialty clinics around medication prescribing and connecting them to spoke sites in primary care offices where community physicians could provide ongoing buprenorphine maintenance. It was a public health framework built for a single substance category, funded through Medicaid and federal support, and evaluated primarily on treatment capacity and healthcare cost data. RCA’s adaptation applies the structural concept to the full spectrum of SUD care across a for-profit provider network, using inpatient campuses as hubs and community outpatient centers as spokes to bridge the post-residential discharge gap. Where Vermont’s spoke sites were largely primary care offices, RCA’s are dedicated outpatient treatment centers offering the same clinical services as its hub facilities. The scale and clinical breadth differ significantly, and so does the reimbursement model RCA ultimately aims to achieve.
