On Friday, Acadia Healthcare Company Inc. ( ACHC ) agreed to pay $16.6 million to resolve allegations that it violated the False Claims Act by billing federal healthcare programs for unnecessary or non-compliant inpatient behavioral health services.

The company operates facilities across the United States. Four states involved in the case—Florida, Georgia, Michigan, and Nevada—will receive additional settlements of $3.2 million.

The allegations stemmed from Acadia’s conduct between 2014 and 2017, during which it allegedly admitted patients ineligible for inpatient treatment and kept them longer than necessary.

The United States contended that Acadia failed to provide adequate staffing and supervision, leading to serious harm to patients, including suicides and assaults. Additionally, the company was accused of failing to provide services that met federal and state standards, including insufficient therapy and discharge planning.

As a result, Acadia billed Medicare, Medicaid, and TRICARE for services that did not comply with required regulations.

New York Times report noted that the government is investigating Acadia’s recent practices, as reported by multiple former employees from Georgia and Missouri who have recently spoken with agents from the FBI and the Health and Human Services Department’s inspector general’s office.

In Georgia, these employees, who worked in hospital emergency rooms assessing patients’ needs for psychiatric facility referrals, reported that an FBI agent inquired about any pressure they felt to refer patients to Acadia’s hospitals.

Meanwhile, former nurses from Acadia in Missouri were questioned about the company’s pressure on them to label patients as uncooperative or combative, which was intended to justify extending their stays.

Robert DeConti, the inspector general’s chief counsel, stated that the settlement does not impede investigators from exploring allegations regarding more recent activities.

In a separate press release, Acadia Healthcare ( ACHC ) said the company is cooperating fully with authorities in response to a government investigation recently disclosed by the company.

Recently, media reports surfaced concerning troubling patient experiences at Acadia’s facilities.

Acadia’s Chief Executive Officer, Chris Hunter, addressed these reports, stating they are inconsistent with Acadia’s policies and do not reflect the medical complexities involved in behavioral healthcare.

Acadia is set to invest an additional $100 million in technology to improve patient and staff safety and enhance care coordination. This includes upgrades like electronic medical records (EMR) systems, wearable remote patient monitoring devices, staff communication and alert tools, and a cloud-based performance improvement platform.

These innovations will offer better transparency and oversight of clinical and quality operations across Acadia’s facilities.

In an SEC filing, Acadia Healthcare ( ACHC ) said the United States Attorney’s Office for the Southern District of New York issued a voluntary information request alongside a grand jury subpoena from the United States District Court for the Western District of Missouri.

These inquiries pertain to Acadia’s admissions processes, patient stay length, and billing practices.

Additionally, Acadia’s subsidiary received a grand jury subpoena concerning similar issues. Acadia expects to receive additional document requests from the U.S. Securities and Exchange Commission and may encounter further requests from other governmental bodies.

Price Action: ACHC stock is down 26.60% at $55.47 at the last check on Friday.

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