Acadia Healthcare (Nasdaq: ACHC), the largest behavioral health provider in the United States, continues to execute its ambitious mergers and acquisitions (M&A) strategy, cementing its leadership in the behavioral healthcare space. The company has recently expanded its footprint in the opioid treatment landscape by acquiring three opioid treatment programs (OTPs) in South Carolina. This acquisition marks Acadia’s first entry into South Carolina’s opioid treatment sector, signaling the company’s continued efforts to respond to the growing demand for addiction treatment services across the country.
Acadia’s proactive approach to expanding its geographic reach, particularly in underserved areas, has garnered attention as it positions itself to meet the needs of communities facing opioid use disorder (OUD) and other behavioral health challenges. This strategic move builds on its broader plans to grow its business and create more access to critical treatment services, positioning Acadia as a key player in the fight against the opioid crisis and improving opioid addiction recovery.
South Carolina: An Underserved Market with High Demand
South Carolina is one of the latest states to benefit from Acadia’s expansion, and it represents a market with significant untapped demand for opioid use disorder treatment. According to Chris Hunter, CEO of Acadia Healthcare, “South Carolina is an underserved market with clear, unmet treatment demand for those suffering from opioid use disorder.” The three clinics acquired in the state have already earned excellent reputations for providing quality care and producing positive patient outcomes through a combination of medication-assisted treatment (MAT) and clinical services.
By acquiring these facilities, Acadia is not only broadening its geographic reach but is also reinforcing its commitment to offering comprehensive care to individuals struggling with OUD. These three OTPs will become part of Acadia’s comprehensive treatment center (CTC) service line, offering patients a wide range of addiction treatment options. In addition to MAT, the centers will provide medical care, counseling, individual and group therapy, partial hospitalization programs (PHPs), and vocational and educational services. This comprehensive approach is designed to give patients the best possible chance for opioid addiction recovery and long-term success.
Furthermore, the three South Carolina clinics will expand access to care for underserved populations, including Medicaid beneficiaries. Acadia has long been committed to providing services to patients from diverse backgrounds and financial situations, making its CTCs a critical resource for those who need them most.
A Focused Growth Strategy: Building on Success in the Carolinas
This acquisition in South Carolina is just the latest example of Acadia’s strategic growth in the southeastern U.S. Earlier this year, in March, Acadia acquired three CTCs in North Carolina, further expanding its reach in the region. Dr. Nasser Khan, Acadia’s Chief Operating Officer, previously discussed the appeal of North Carolina’s Medicaid approach, noting that the state’s progressive stance on expanding Medicaid access made it an attractive target for growth. This move further solidified Acadia’s belief in the power of Medicaid expansion to improve access to care for individuals with opioid use disorder.
The company’s focus on expanding its CTC footprint in the Carolinas is part of a larger effort to increase the number of treatment facilities across the country. As of June 30, 2024, Acadia operates 258 behavioral healthcare facilities with approximately 11,400 beds. Acadia’s significant size and national presence place it in a prime position to leverage its network of facilities to meet the rising demand for opioid addiction recovery services.
The company’s 2024 goal of opening 14 new CTCs reflects its ongoing commitment to addressing the opioid epidemic and expanding access to treatment. These new centers will help Acadia further extend its reach, serving new communities and populations impacted by substance use disorders. By continuing to invest in the growth of its CTCs, Acadia aims to solidify its position as a leader in opioid addiction recovery and behavioral health services nationwide.
A Three-Pronged Approach to Growth
Acadia’s M&A strategy is just one part of a much larger plan for growth. In December 2022, the company unveiled a three-pronged strategy to double its annual revenue by 2028. The three main components of this strategy include:
- Mergers and Acquisitions (M&A) – Acadia continues to pursue strategic acquisitions, like its recent purchase of OTPs in South Carolina, to expand its geographic footprint and service offerings.
- De Novo Builds – In addition to acquiring existing facilities, Acadia plans to build new treatment centers from the ground up, which will allow it to expand into new markets and better serve underserved communities.
- Joint Ventures and Partnerships – Acadia is also actively seeking joint venture partnerships with other healthcare providers, which will further extend its reach and create more opportunities for collaboration in delivering high-quality behavioral healthcare services.
In addition to these growth strategies, Acadia is also focused on expanding its care continuum and enhancing its technology capabilities. This includes integrating innovative tools and services that improve patient care, streamline operations, and enhance treatment outcomes. As the opioid epidemic continues to ravage communities across the U.S., Acadia is uniquely positioned to meet the growing demand for services in this crucial area, driving better outcomes in opioid addiction recovery.
Nationwide Presence: Strengthening Acadia’s Network
With the recent acquisition of the three South Carolina OTPs, Acadia now operates 165 CTC locations across 33 states. This nationwide network of treatment centers is integral to addressing the opioid crisis and offering comprehensive care to individuals struggling with addiction. These centers provide a full range of treatment options, including medications for opioid use disorder (MOUDs), medical care, therapy, and specialized services like vocational and educational programs.
The three South Carolina clinics, which were previously known as Recovery Concepts, Recovery Concepts of the Carolina Upstate, and Clear Skye Treatment Center, will now be rebranded as Clinton Comprehensive Treatment Center, Easley Comprehensive Treatment Center, and Ridgeland Comprehensive Treatment Center. This rebranding will help align these facilities with Acadia’s broader vision of delivering high-quality, evidence-based care to patients in need, with a clear focus on opioid addiction recovery.
In addition to opioid use disorder treatment, Acadia’s CTCs provide vital services for individuals with co-occurring disorders, including mental health issues like depression, anxiety, and trauma. This holistic approach ensures that patients receive the full spectrum of care they need to achieve lasting recovery and improve their quality of life, enhancing their overall opioid addiction recovery journey.
Legal and Reputational Challenges: Navigating Scrutiny
While Acadia’s growth strategy is undeniably ambitious and impactful, the company has faced its share of legal and reputational challenges. Most recently, Acadia agreed to pay $19.85 million to resolve allegations of endangering patients and committing Medicare, Medicaid, and TRICARE fraud. The U.S. Department of Justice (DOJ) alleged that the company had engaged in improper billing practices and jeopardized the safety of patients.
Further scrutiny came after a New York Times exposé that accused Acadia of holding patients against their will, sometimes in cases where it was not medically necessary. Acadia has denied these allegations, asserting that its practices were misrepresented in the media. In an October 2023 statement, the company emphasized its commitment to providing life-saving care, noting that it had treated over 150,000 patients in 2023 alone.
Additionally, Acadia was named in a U.S. Senate Finance Committee report, which detailed “harms, abuses, and indignities” in youth residential treatment facilities. In response, Senate Finance Committee Chair Ron Wyden (D-Oregon) has called on the DOJ to investigate Acadia’s youth treatment programs further.
Despite these challenges, Acadia has remained committed to its mission of providing high-quality, compassionate care to individuals suffering from addiction and mental health issues. The company has pledged to cooperate fully with authorities and has worked to clarify any misunderstandings related to its practices, ensuring its continued focus on delivering essential care for opioid addiction recovery.
Looking Toward the Future
As Acadia Healthcare continues its expansion across the United States, the company’s leadership in behavioral healthcare and opioid treatment services remains clear. The recent acquisitions in South Carolina, along with the company’s ongoing investments in new facilities and partnerships, demonstrate Acadia’s unwavering commitment to meeting the needs of communities affected by substance use disorders.
However, as Acadia navigates legal and reputational challenges, it will need to balance its growth efforts with a continued focus on compliance, transparency, and patient care. By maintaining high standards of care and ensuring that its operations align with ethical and legal expectations, Acadia will be better positioned to overcome its challenges and achieve long-term success in the ever-evolving behavioral health landscape, ultimately continuing to drive positive outcomes in opioid addiction recovery.
