Healthcare Agency that Billed for Unnecessary Inpatient Psychiatric Services Settles With Feds for $20 Million
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Healthcare Agency that Billed for Unnecessary Inpatient Psychiatric Services Settles With Feds for $20 Million

Park Royal Hospital in Fort Myers Fla. Is an Inpatient Psychiatric Hospital Owned by Arcadia Healthcare - The Daily Muck

Park Royal Hospital in Ft. Myers, Fla., is an inpatient psychiatric facility operated by Acadia Healthcare. The for-profit medical chain has settled allegations of inadequate and unnecessary inpatient treatment at its facilities with the federal government for almost $20 million. Photo Credit: Acadia Healthcare.

Acadia has agreed to pay almost $20 million after a federal investigation and accusations that the company defrauded taxpayer-funded health insurance programs, including Medicare, Medicaid and TRICARE, a federally funded program for veterans and military members.

Acadia will pay $16,663,918 to the United States for False Claims Act violations, according to the terms of the settlement. Arcadia will pay an additional $3,186,082 to the states of Florida, Georgia, Michigan and Nevada for improper claims against state-administered Medicaid programs.

Acadia will pay another $3.2 million to reimburse Medicaid programs - The Daily Muck
In addition to repaying $16.6 million to federal health care programs, Acadia will pay another $3.2 million to reimburse Medicaid programs of Florida, Georgia, Michigan and Nevada, according to a settlement agreement obtained by The Daily Muck.

Allegations of Unnecessary Inpatient Treatment and Inadequate Care, Resulting in Suicides

Acadia’s problems go way deeper than merely overbilling Medicare and TRICARE.

Their psychiatric hospitals held patients longer than medically necessary and admitted people for inpatient treatment who didn’t need it, say prosecutors. For those legitimately needing inpatient care, Acadia facilities allegedly often kept them longer than necessary.

But while unnecessarily enrolling them and keeping them, Acadia failed to provide sufficient treatment, feds say. The facilities were staffed with fewer providers than needed, leaving patients unsupervised. That, in turn, resulted in high numbers of assaults, escapes and suicides, according to the Justice Department.

In addition, between 2014 and 2017, Acadia failed to provide inpatient acute care in accordance with federal and state regulations, say prosecutors. Those violations allegedly included failing to provide “active” treatment and individual and group therapy. They also reportedly did not create and update assessments and treatment plans for their patients.

Previous Legal Issues

This is not the first time Acadia Healthcare has had problems with the law. In 2019, their facility in Albuquerque, N.M., was shut down after seven lawsuits were filed, alleging that the company failed to protect the clients from physical and sexual abuse from workers and other patients, according to a Nashville Post report. Staff at the facility also allegedly encouraged “fight clubs” among patients and excessively restrained children.

In July 2023, Acadia was ordered to pay $405 million in damages in a civil case brought on behalf of an 8-year-old girl who was repeatedly sexually assaulted in a New Mexico foster care facility run by Arcadia, according to a Behavioral Health Business article.

This corporation is the latest in a long list of Medicare frauds The Daily Muck has covered.

Oak Street Health, a CVS subsidiary, agreed to pay $60 million allegations that it paid kickbacks to third-party insurance agents, while Erlanger Health, a North Carolina/Tennessee healthcare company, was charged with Medicare fraud.

Comments by Officials Involved in the Case

Investigators and prosecutors had plenty to say about Acadia in the wake of the settlement.

“This settlement demonstrates the Justice Department’s commitment to ensuring that federal healthcare programs pay only for services that are needed and properly provided. It is particularly important that health care providers satisfy these requirements when providing services to a vulnerable patient population, such as residents of an inpatient behavioral health facility”, said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.

“Billing TRICARE for medically unnecessary inpatient behavioral health services or for services that did not meet federal and state regulations impacts our ability to reimburse providers in a timely manner for care that is needed to keep our military ready to defend the nation,” said Rear Admiral Matthew Case of the U.S. Navy and Acting Assistant Director for Health Care Administration for the Defense Health Agency.

Statement by Acadia CEO

Although Acadia Healthcare failed to provide a public statement regarding the False Claims Act Violation, their CEO Christopher Hunter stated in a company press release, “We’re committed to taking action on incidents that fall short of our rigorous standards and are making investments necessary to establish Acadia as the leading behavioral healthcare provider for high-acuity and complex needs patients.”

Despite the settlement, authorities continue to follow and investigate Acadia’s business practices.

Strahinja Nikolić
Born in Belgrade, raised to love sports, fell for rock and roll. Curious by nature, loves to dig, research and make those who deserve it nervous.
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