Investigation into Acadia Healthcare by Veterans Affairs Department
The Veterans Affairs Department is currently investigating Acadia Healthcare, one of the largest chains of psychiatric hospitals in the United States, over allegations that it may be defrauding government health insurance programs. Sources familiar with the inquiry have indicated that the investigation is focused on whether Acadia has been holding patients longer than medically necessary, raising serious concerns about their practices.
This investigation, spearheaded by the agency’s inspector general, follows a recent disclosure by Acadia to its investors regarding scrutiny from multiple federal entities. These include prosecutors in Manhattan and a grand jury in Missouri, all examining the company’s admissions practices. Acadia, which heavily relies on government insurance programs such as Medicare and Medicaid for its revenue, has also indicated that it anticipates inquiries from the Securities and Exchange Commission and other regulatory bodies.
In a statement to investors, Acadia expressed its commitment to fully cooperate with the authorities, yet refrained from speculating on whether these investigations might affect its business operations or overall viability. The company has categorically denied any allegations of improperly detaining patients, asserting that all care-related decisions are made by licensed medical professionals who prioritize patient well-being.
The Veterans Affairs Department has not provided immediate responses regarding the specifics of this new investigation. However, a report by The New York Times in September highlighted troubling practices within Acadia, suggesting that the company has been holding patients against their will, potentially in violation of state laws. The report detailed instances where patients, initially seeking routine mental health care at emergency rooms, were subsequently transferred to Acadia facilities and confined there. In some cases, employees reportedly retained patients until their insurance coverage expired, even in the absence of medical justification for continued hospitalization.
This comprehensive report was based on a combination of official complaints, court documents, and firsthand accounts from patients, as well as insights from over 50 current and former employees of Acadia.
In a related development last month, Acadia agreed to a settlement of nearly $20 million with the Justice Department. This settlement addressed claims that the company had engaged in fraudulent practices by unnecessarily prolonging patient stays and admitting individuals who did not require inpatient care. Notably, Acadia did not admit to any wrongdoing in this case, which pertained to conduct between 2014 and 2017.
The ongoing investigations are now centered on more recent events. The Veterans Affairs Department is specifically examining whether Acadia improperly billed insurance programs for patients who were stable enough to be discharged and did not require the intensive inpatient care provided by the facilities. According to two sources familiar with the investigation—who requested anonymity due to the sensitive nature of the inquiry—this aspect is a significant focus of the current inquiry.
Furthermore, several former employees of Acadia from Georgia and Missouri have recently been interviewed by agents from the FBI and the Health and Human Services Department’s inspector general’s office, indicating a broadening scope of investigation into the company’s practices.