Acadia Healthcare, one of the largest providers in the behavioral health care sector, has agreed to pay $19.85 million in a settlement with the U.S. government and several states’ governments. This payment resolves allegations that the company knowingly billed Medicare, Medicaid, and TRICARE for medically unnecessary inpatient behavioral health services and endangered patient safety by failing to provide adequate treatment and proper staffing between 2014 and 2017. The resolution of these claims marks the latest chapter in a series of issues surrounding Acadia’s practices and its approach to patient care, including allegations of behavioral health care fraud.
The Allegations Against Acadia Healthcare
The U.S. Department of Justice (DOJ) has detailed multiple claims against Acadia Healthcare, the majority of which revolve around false billing practices and behavioral health care fraud. Specifically, the DOJ accused Acadia of knowingly submitting false claims to federal health care programs, including Medicare, Medicaid, and TRICARE, for inpatient behavioral health services that were medically unnecessary. According to the DOJ, Acadia admitted patients who did not require inpatient treatment, extended their stays beyond the medically appropriate duration, and failed to discharge patients when they no longer needed care, all of which are central to the behavioral health care fraud allegations.
These alleged practices resulted in what the DOJ described as “improper and excessive lengths of stay,” which the department claimed were a direct violation of federal regulations governing behavioral health care. Furthermore, the DOJ contended that Acadia did not adhere to the necessary standards of inpatient care, failing to maintain individualized treatment plans, provide proper discharge planning, and deliver consistent therapy—both individual and group—during inpatient stays. These failures also contributed to what can be classified as behavioral health care fraud, as the company allegedly received reimbursements for services that were not medically necessary.
In addition to the billing issues, the DOJ’s investigation highlighted serious concerns about Acadia’s staffing practices. Specifically, it was alleged that the company failed to provide adequate staffing at its facilities, which led to dangerous situations for patients. These included assaults, suicides, and other incidents of harm that resulted from staffing shortages and a lack of proper training and supervision. The DOJ claims that Acadia’s neglect of staffing requirements directly jeopardized patient safety, raising questions about the company’s commitment to providing a secure and therapeutic environment for those under its care. These staffing failures were also part of the broader behavioral health care fraud that the DOJ was investigating.
The Financial Settlement and Legal Resolution
To settle these allegations, Acadia has agreed to pay a total of $19.85 million. The bulk of this settlement, over $16.5 million, will go to the United States government to resolve claims related to improper billing of Medicare, Medicaid, and TRICARE for unnecessary services. In addition, Acadia will pay over $3 million to four states—Florida, Georgia, Michigan, and Nevada—to resolve allegations that it violated state-specific regulations governing behavioral health care.
Importantly, Acadia’s settlement does not include any admission of wrongdoing or liability. According to the DOJ’s announcement, the claims resolved by the settlement are “allegations only,” and no determination of liability has been made. Acadia, in its own statement, reiterated this point, noting that it had cooperated with the government since the matter was first brought to light in 2017. A company spokesperson commented, “Importantly, the agreement includes no admission of wrongdoing or liability and resolves historical matters which allows us to ensure our focus remains on providing quality care to our patients and their families.”
Acadia has been under investigation since 2017, and the settlement effectively brings closure to this chapter of legal scrutiny. However, the company’s ability to focus on delivering high-quality care moving forward remains to be seen, especially given the broader pattern of issues it continues to face.
Additional Controversies Surrounding Acadia Healthcare
The legal settlement with the U.S. government and several states comes on the heels of other troubling revelations about Acadia’s practices. In June 2023, the U.S. Senate Finance Committee released a report examining systemic problems within the youth residential treatment facility sector, with Acadia’s facilities being specifically mentioned. The report alleged that numerous facilities, including those operated by Acadia, subjected children to harmful practices, including neglect, abuse, and maltreatment. The Senate Finance Committee expressed grave concern over the lack of adequate oversight and the poor treatment of vulnerable populations within the behavioral health system.
In addition to the Senate report, Acadia came under further public scrutiny in March 2024, when The New York Times published an investigative article based on interviews with current and former employees and patients. The article described how Acadia allegedly coerced patients into treatment, sometimes holding them against their will. The report focused on four Acadia-operated hospitals in Florida, Georgia, and Missouri, and it raised serious ethical concerns about the company’s practices. These revelations about involuntary treatment, coupled with the other legal and regulatory issues the company has faced, have significantly damaged Acadia’s reputation and raised important questions about its commitment to patient rights and well-being.
The DOJ’s Position on the Settlement
The settlement is a clear signal from the Department of Justice that the government is committed to holding health care providers accountable when their actions endanger patient health and safety. U.S. Attorney Roger Handberg, for the Middle District of Florida, stated in the DOJ’s announcement, “Federal health care programs rely upon the honesty and credibility of participating providers. The Justice Department will hold accountable those who seek to exploit these programs for personal gain, jeopardizing the health of patients.” This case serves as a reminder to other healthcare providers that misusing federal programs for financial gain, especially when it endangers patients, will not be tolerated.
While the settlement resolves the specific allegations related to improper billing and staffing failures, it does not address the broader systemic concerns raised by the Senate report and The New York Times investigation. These ongoing issues suggest that Acadia still faces considerable challenges in restoring trust among patients, employees, and regulators. The settlement does not mark the end of Acadia’s legal troubles, and the behavioral health care fraud investigations are likely to continue in some form.
What Does This Mean for Acadia’s Future?
The settlement allows Acadia to move past some of its legal troubles, but the company remains under close scrutiny for its past practices. Moving forward, Acadia must focus on demonstrating a commitment to patient safety, improving staffing levels, and ensuring compliance with both federal and state regulations. As one of the largest providers of behavioral health services in the country, Acadia’s actions have wide-reaching consequences, and its ability to restore its reputation will depend on the steps it takes to address these serious concerns.
For patients, families, and advocates, the ongoing revelations about Acadia’s facilities underscore the importance of continued oversight and reform within the behavioral health care industry. As more scrutiny is applied to youth treatment centers and inpatient care, it is clear that providers must prioritize both ethical standards and high-quality care for all patients. With the rise of cases related to behavioral health care fraud, it is more important than ever to ensure that patients are receiving the care they need, rather than being subjected to unnecessary treatments or extended stays for profit.
Acadia’s legal settlement may resolve specific allegations, but the company’s reputation and commitment to reform will remain under intense examination in the years ahead. The company faces the challenge of rebuilding trust and ensuring that similar instances of behavioral health care fraud do not occur again. Only time will tell whether Acadia can overcome its troubled past and refocus its efforts on providing compassionate, high-quality care for all its patients.
