Psychiatric Hospital Chain Faces New Federal Investigations #

A major for-profit psychiatric hospital chain is facing fresh federal investigations into its patient admission practices and billing methods. The company, which operates over 50 psychiatric hospitals across the country and receives significant revenue from government insurance programs, disclosed this information recently.

The company stated that federal prosecutors have requested information, and it has also received subpoenas from a federal grand jury. Additionally, the company anticipates similar inquiries from a federal regulatory agency.

This news had a significant impact on the company’s stock price, which experienced a sharp decline before partially recovering.

These federal investigations follow recent reports of the company allegedly holding patients against their will in ways that may violate state laws. Some patients reportedly sought routine mental health care at emergency rooms but were then sent to the company’s facilities and confined.

The investigations were announced shortly after the company agreed to pay nearly $20 million to settle claims of defrauding government health insurers. The allegations included holding patients longer than medically necessary, admitting people who didn’t require hospitalization, failing to provide therapy, and maintaining dangerously low staffing levels, which led to assaults and suicides.

The settlement involved payments to the federal government and four states to resolve allegations of violating state laws. The company did not admit wrongdoing in that case, which covered conduct over a three-year period.

The company stated that the new federal subpoenas and information requests relate to its admissions, length of stay, and billing practices. They expressed full cooperation with authorities but could not speculate on the potential impact on their business or operations.

In response to recent reports, the company asserted that the described patient experiences were inconsistent with their policies. They maintained that all decisions on patient care, including treatment necessity and duration, are made by licensed physicians in accordance with the law.

Recent reports indicate that former employees of the company in two states have been interviewed by federal agents as part of the ongoing investigations.