Department of Veterans Affairs investigating Acadia Healthcare for possible insurance fraud

The Department of Veterans Affairs is currently investigating Acadia Healthcare, a major network of psychiatric facilities, for potentially defrauding government health insurance programs by unnecessarily extending patients’ stays, sources familiar with the matter reveal.

This investigation by the department’s inspector general was triggered following Acadia’s disclosure to its investors of existing investigations into its patient admissions strategies by other federal agencies, including Manhattan prosecutors and a Missouri grand jury. Acadia is heavily dependent on government-funded programs such as Medicare and Medicaid for its revenue. Further scrutiny by the Securities and Exchange Commission and other bodies is expected.

Acadia responded to the allegations by affirming its cooperation with the investigation and stating that its patient care decisions are made by qualified medical personnel. The company has refuted any allegations of improper patient detention.

The new investigation follows New York Times reports in September that suggested Acadia may be detaining patients beyond medical necessity, a practice that potentially violates state laws. According to the report, some people seeking routine mental health care in emergency rooms were transferred to Acadia facilities and held until their insurance benefits ran out, with no medical justification for such extended stays. These findings were based on numerous complaints, court documents, and interviews with current and former Acadia employees, numbering more than fifty.

Recently, Acadia agreed to a nearly $20 million settlement with the Department of Justice over allegations similar to those currently under investigation, alleging that the company retained patients longer than necessary and admitted those who didn’t need of hospital care from 2014 to 2017. In this settlement, Acadia admitted no wrongdoing.

Ongoing investigations focus on more recent activities. It is alleged that Acadia charged for patient care when individuals were stable enough for discharge and did not require the level of care provided. The claims are based on information from industry insiders who have chosen to remain anonymous due to the sensitivity and non-public nature of the investigation.

Additionally, recent interviews with several former Acadia employees from Georgia and Missouri conducted by the FBI and the Department of Health and Human Services’ Office of the Inspector General corroborate current concerns regarding Acadia’s operations.

The Department of Veterans Affairs has not yet commented on the ongoing investigation.