Youth behavioral health residential treatment centers for youth, which provide care to children facing mental health and behavioral challenges, are facing heightened scrutiny. A recent push by a powerful federal lawmaker has raised concerns about the quality of care in these facilities, calling attention to issues ranging from Medicaid fraud to violations of children’s civil rights. This increasing pressure is part of a broader conversation about the need for reform in the way youth with behavioral health needs are treated in the United States.
A Call for Investigation by Senator Ron Wyden
On March 12, 2025, Senate Finance Committee Chair Ron Wyden (D-Oregon) publicly called on the U.S. Department of Justice (DOJ) to investigate four major behavioral health providers. These providers—Universal Health Services, Acadia Healthcare, Devereux Advanced Behavioral Health, and Vivant Behavioral Healthcare—operate a large number of residential treatment centers for youth across the nation. Wyden’s request for a DOJ investigation comes after growing concerns over Medicaid fraud, the mistreatment of children, and systemic issues within these facilities.
Senator Wyden specifically called for an inquiry into whether these providers are committing Medicaid fraud by submitting claims for services they do not adequately provide. He also raised concerns about whether these facilities are violating the civil rights of children by keeping them in residential treatment settings, where they may face neglect, abuse, or unnecessary separation from their communities. Wyden’s public call to action has brought these concerns to the forefront of national attention, adding to the growing momentum for reform in the youth behavioral health system.
Medicaid Fraud Allegations and Substandard Care
In his letter to U.S. Attorney General Merrick Garland, Wyden detailed troubling allegations against these four providers. According to Wyden, many of these residential treatment centers for youth are submitting Medicaid claims for services that either do not meet federal standards or are never fully provided to the children in their care. The funds that are meant to provide vital mental health and therapeutic services are instead being used to bolster the profits of these companies, all at the expense of vulnerable children and American taxpayers.
Wyden’s letter paints a grim picture of the conditions within these facilities, accusing them of operating substandard programs with insufficient staff training, inadequate therapeutic treatment, and poor living conditions for the children placed there. These providers, which collectively receive billions of dollars in Medicaid funding, are accused of failing to provide the quality care children need, leaving them at risk of harm rather than healing. The failure to meet basic care standards, Wyden argues, represents a broader systemic issue that may affect many residential treatment centers for youth across the country.
One of the most alarming allegations involves the use of restraints and seclusion. Wyden’s letter notes that, under Centers for Medicare & Medicaid Services (CMS) regulations, psychiatric residential treatment facilities are prohibited from using restraints or seclusion as forms of coercion, discipline, or retaliation. However, these practices are still reported to be widely used in some facilities, putting children in dangerous situations that could worsen their mental health issues rather than helping them recover.
Civil Rights Violations and ADA Concerns
Beyond allegations of fraud and poor care, Wyden also raised concerns about civil rights violations. In a separate letter, Wyden expressed that states might be in violation of the Americans with Disabilities Act (ADA) by placing children in segregated residential treatment centers for youth without first providing them with community-based care options. The ADA mandates that individuals with disabilities, including mental health and behavioral conditions, be provided with services in the least restrictive setting possible.
Wyden argues that many states are failing to offer a continuum of in-community services that could better meet the needs of children. Instead, these states often resort to removing children from their families and communities, sending them to out-of-state or isolated residential treatment centers for youth. This practice, Wyden asserts, not only violates children’s civil rights but also exacerbates the trauma many children experience as they are removed from familiar surroundings and supportive networks.
The harm does not stop once the child leaves the residential facility. Wyden highlights evidence that states often fail to adequately prepare for a child’s reintegration into their community following discharge. This lack of planning can result in children having fewer community connections and support, especially when they are sent to out-of-state facilities that make it harder for families to maintain contact. These barriers to successful reintegration can have long-term consequences for a child’s mental health, stability, and future success.
Education Gaps and the Impact of Segregation
Another major concern raised by Wyden and others involves the education provided in residential treatment centers for youth. In many cases, children in these facilities are receiving inadequate or segregated education that isolates them further from their peers and communities. The lack of proper educational services compounds the negative impact of institutionalization. Without access to quality education, children may fall behind academically, which could affect their long-term development and opportunities for success once they leave the facility.
Wyden’s concerns underscore the broader issue of how these facilities can be harmful to children’s overall development, both emotionally and academically. While these programs are intended to provide therapeutic support and education, the realities of life inside many residential treatment centers for youth fall far short of those goals. Instead of preparing children for reintegration into society, these facilities often contribute to further alienation, leaving children isolated and ill-prepared for life outside institutional settings.
Legislative Push for Reform
Senator Wyden’s efforts are part of a larger, growing movement to reform the youth behavioral health system. Earlier this year, a group of lawmakers introduced the Stop Institutional Child Abuse Act, which seeks to increase information sharing between states to better identify and address institutional child abuse. The bill is intended to help ensure that states are held accountable for the safety and well-being of children placed in residential treatment centers for youth and to promote greater transparency in the system.
Wyden’s concerns align with a report issued by the Senate Finance Committee, which accused the behavioral health industry of intentionally profiting from “taxpayer-funded child abuse.” The report, which Wyden helped spearhead, pointed to systemic issues in the industry and emphasized the need for greater oversight. Industry insiders have pushed back against the report, criticizing it for being biased and missing key contextual information. They argue that the findings fail to acknowledge the complexities of providing care for youth with behavioral health needs and that simply increasing regulation without addressing underlying issues will not solve the problem.
A Path Forward: Increased Oversight and Systemic Reform
The pressure for change is intensifying, with calls for better oversight, improved care, and a reevaluation of the very structure of youth behavioral health treatment programs. Wyden’s request for a DOJ investigation marks just the latest step in a growing movement to address the failings of these residential treatment centers for youth.
The outcome of these investigations, along with the ongoing legislative efforts, will have far-reaching consequences for the future of youth behavioral health care in the U.S. There is increasing recognition that the current system is not working as it should—either in terms of providing effective care or in upholding the rights of children. While some industry voices argue that these investigations and calls for reform are misguided, the weight of the evidence continues to mount. The well-being of children in these facilities must be the priority, and the current system, as it stands, is being called into question.
As lawmakers, advocacy groups, and the public continue to push for change, it is clear that the issue of how to care for vulnerable youth in the behavioral health system is far from resolved. The outcome of these efforts will determine the future of residential treatment centers for youth and, most importantly, the future of the children who depend on them for care and support. As scrutiny increases, there is hope that real change may be on the horizon—change that will better serve the children and families who are impacted by the youth behavioral health system.
