Acadia Healthcare Settles for $20 Million Amid Fraud Allegations from Justice Department

Acadia Healthcare, one of the largest for-profit psychiatric hospital chains in the U.S., has agreed to pay nearly $20 million to settle a federal investigation into accusations of defrauding Medicare and Medicaid. The Justice Department announced the settlement on Thursday, citing practices that involved holding patients longer than necessary and admitting individuals who did not require hospitalization.

Prosecutors indicated that once patients entered Acadia facilities, they often did not receive adequate therapy, and the hospitals operated with dangerously low staffing levels, contributing to incidents of patient assaults and suicides. The settlement will compensate the federal government and the states of Florida, Georgia, Michigan, and Nevada, addressing alleged violations of state laws.

Tim Blair, a spokesperson for Acadia, emphasized the company’s cooperation with the government, asserting that they did not admit to any wrongdoing. He stated that resolving the investigation allows Acadia to refocus on delivering quality care to its patients.

Acadia operates over 50 psychiatric hospitals across the nation, with more than half of its revenue derived from government insurance programs. The investigation focused on the company’s practices from 2014 to 2017. However, a recent New York Times investigation revealed that similar problematic practices may still be ongoing. Based on official complaints, court records, and interviews with current and former employees, the report found that financial motives often dictated patient stays at many of Acadia’s hospitals.

Despite the claims made in the Times investigation, Blair maintained that the examples cited failed to acknowledge the positive experiences of many patients, stating that decisions were made in the best interests of patient care.

The Justice Department is also looking into Acadia’s more recent activities. Former employees in Georgia and Missouri have reported being interviewed by FBI agents about pressures to refer patients to Acadia’s facilities. Some former nurses from Missouri indicated they were pressured to classify patients as uncooperative or combative to justify extended hospital stays.

Robert DeConti, chief counsel to the inspector general, noted that the settlement does not preclude ongoing investigations into Acadia’s recent conduct. Neither the FBI nor Acadia has commented on the ongoing inquiries.

The settlement stems from whistle-blower accounts from three former Acadia employees at the Lakeview Behavioral Health Hospital in Norcross, Georgia, and Park Royal Hospital in Fort Myers, Florida. These whistle-blowers described a corporate culture overly focused on profit, often at the expense of patient care.

Jamie Clark Thompson, a former director of nursing at Lakeview, expressed shock at the extent to which staffing was compromised while the company billed insurance for services that were not provided. Her lawsuit highlighted alarming conditions, such as units with 19 patients being supervised by only one nurse, and instances where patients did not see a doctor.

Thompson reported that her concerns were dismissed, leading her to feel frustrated and helpless. Another whistle-blower, Brian Snyder, a former executive at Park Royal, stated that the hospital’s practices systematically aimed to maximize insurance reimbursements by prolonging patient stays.

Snyder emphasized that the issues at Acadia were not isolated incidents but rather a widespread, intentional strategy within the organization.