AAC president resigns after investigation

An American Addiction Centers (AAC) official has resigned from his key roles in response to a California Department of Justice investigation and resulting charges involving a 2010 incident in which a patient died at an AAC facility. According to an announcement from AAC, Jerrod Menz, president and a member of the board of directors, has voluntarily stepped down from those roles.

“I don’t think that there’s a facility in the United States that’s been open any length of time that hasn’t experienced someone pass away in one of their beds or something happen,” said Chairman and CEO Michael Cartwright in the company’s second-quarter earnings call presented late yesterday. “It’s very unfortunate. It’s very sad for the staff and the family members, but there’s no at-fault here. It’s really hard for me to imagine or fathom that it would damage the company.”

The California investigation has resulted in charges against subsidiaries of AAC and three former employees, as well as Menz, and Meg Dean, operations director of the residential facility in San Diego, who will remain in her current role. AAC at the same time offered a prepared statement in response to the grand jury indictment.

AAC’s statement says: “We firmly believe that the California Department of Justice’s case is without merit. We will vigorously defend the company and each individual in court.”

The case involves the 2010 death of a client who passed away the morning after he checked in to an AAC facility. A separate civil case was settled a year ago.

“The company is not currently aware of any evidence that the company or any of the individuals charged were responsible for the resident’s death,” AAC said in the statement.

AAC also released it second quarter earnings this week. Revenues increased 85 percent to $53.8 million. Currently, AAC has 587 total beds.

[Editor's Note: This article was updated in August to reflect a clarification from AAC indicating that Menz only resigned from his board member and president position, while still acting in a business development role.]