This article was originally published on Behavioral Health Business and is shared here for our audience.
By Chris Larson on September 22, 2026
Behavioral Health Business
Tony Kilgore, CEO of Behavioral Health Group, (left) and Doug Leech, CEO of Ascension Recovery Services, (right) speaking at the SUD Business Summit.
Addiction treatment providers cannot assume everything will go according to plan when opening a de novo location.
Industry insiders say leaders of new-growth projects cannot assume state policies align or, even if followed closely, will lead to a location opening. Beyond navigating processes, leaders at growing organizations will likely have to build and lean on relationships with the people involved in the process to help them find a way around problems.
“It’s very, very complex; it’s not very transparent,” Doug Leech, CEO of Ascension Recovery Services, said during a panel chat at the 2026 SUD Business Summit. “I think states can do a much better job of laying that out if they truly do want good operators to come. … We’ve been doing this work and opening up programs in 35 states. There’s many states where the process, if you follow it to the “t”, will not work. … Those dollars that get burned during that time are going to affect patient care. That’s a real problem.”
Ascension Recovery Services operates nine programs across its 35 states. The company partners with investors, government entities, nonprofits and healthcare providers to develop and run addiction treatment locations.
The key to making relationship building work is time. So, it’s vital to reach the key decisionmakers and functionaries as soon as a project is conceptualized, Leech said. This is critical for the success of the project generally. But it can have an added benefit.
Often, state-level decision makers and the payers — both private and public – of an expansion state will be much more knowledgeable about opportunities, needs, challenges and potential roadblocks than newcomers. They will likely be eager to have their strategic needs met by collaborative providers.
But that is an added time burden on a project. And it’s one that may not be worth it to some providers. That is the case of Tony Kilgore, CEO of Behavioral Health Group, an opioid treatment provider (OTP) and office-based opioid treatment provider (OBOT) provider that operates in 20 states and Washington D.C. It lists 112 locations on its website.
“For us, if we don’t know the state, it’s not somewhere that we operate today; that’s already going to cause us to pause,” Kilgore said. “From there, if we can’t identify a consultant or an advocate or reason to believe that we’ve got an opportunity to understand the process and run things in parallel… we’ll back off of that state.”
Behavioral Health Business
Abigail Stoll, owner and founder of Restaura Behavioral Health, (center-right) answering a question during a panel chat at the SUD Business Summit.
The complicated weave between interplay between state licensure and payer contracting makes staying in extant markets “hugely beneficial” in developing de novo locations, Kilgore added. At times, payers can extend contracts to similar facilities, avoiding the need to spin up completely new ones. But when the company expands into new markets, it leans hard into establishing special relationships with the payers well in advance of going into an expansion. Those relationships can help refine which specific locations and service offerings are most enticing to the payer.
These kinds of partnerships with payers also help with underwriting conversations with investors and lenders. In some cases, these arrangements and local data can help demonstrate the viability of a new operation for investors.
Over the last 10 years or so, lenders have gotten a lot more savvy about financing de novo expansions. Back then, they assessed the building’s value. Now it’s more common for lenders to assess the building’s operator before handing over capital. This often requires growing companies to build deep knowledge about the marketplace and have relationships in place before going to a lender. It also helps to prove concepts with existing facilities in similar markets.
It’s inevitable that opening a de novo addiction treatment facility will go off the rails. Abigail Stoll, owner and founder of Restaura Behavioral Health, said that it is key to prepare for likely roadblocks and ensure that realistic expectations are set for lenders and investors going into a project. To some degree, investors have expectations of snags and stalls. But it is key to explain and factor in unexpected challenges as they arise.
“Why did the project stall? Is it regulatory? Is it staffing shortages? Is it investment? Then, what’s going to be the expanded project timeline now?” Stoll said this reflects the challenges of understanding and communicating about opening facilities. “Investors need to understand that the industry is being squeezed.”
Leech also said that it is always advisable to have more capital than you think you need. On top of being a buffer for unexpected challenges, it also prevents potentially painful cuts in a project that burn bridges within a project and the wider community. It’s also a much harder task to fund again a project that was mispriced.
“Once you build your model and you have all of your startup costs analyzed down to the penny, add 50% and get that much capital and start your program,” Leech said.