For-Profit Psychiatric Hospitals Need Stronger Penalties for Abuses and Deaths

For-Profit Psychiatric Hospitals Need Stronger Penalties for Abuses and Deaths
The behavioral-psychiatric for-profit hospital system is full of graft, greed, cruelty, and appalling levels of abuse—‘business as usual’ masked as mental health ‘care’. Reform of the system must be more than lip service and must include penalties for fraud and patient harm which are serious enough to permanently stop the abuse. – Jan Eastgate, President CCHR International

CCHR says despite $485M jury award to an 8-year-old sexually abused in for-profit psychiatric hospital chain’s foster care program, poor oversight in the behavioral healthcare system lets facilities get away with rampant abuse.

Jan Eastgate
President CCHR International
July 18, 2023

Incidents of abuse against both patients and staff are prevalent in America’s for-profit psychiatric treatment facilities. The Citizens Commission on Human Rights (CCHR) International says the lack of effective accountability contributes to this. However, a recent $485 million jury award against Acadia Healthcare, a leading U.S. behavioral residential hospital chain, should prompt significant regulatory changes. In a civil case involving the girl, identified as G.S., who was repeatedly sexually abused while in Acadia’s treatment foster care system in New Mexico. The jury awarded $80 million in compensatory damages and $250 million in punitive damages against Acadia Healthcare. An Acadia subsidiary, Youth and Family Centered Services (doing business as Desert Hills residential facility) is to pay $75 million in punitive damages, as well as another subsidiary company.[1]

Staff in the foster care program allegedly placed the girl in the home of a foster parent knowing he had prior accusations of sexual assault.[2]

The foster care parent, Clarence Garcia, 66, pleaded guilty in January to seven counts of criminal sexual contact with a minor,  including the girl named in this lawsuit.[3]

Since 2015, CCHR has filed thousands of complaints about the psychiatric-behavioral industry with state legislators, including those in New Mexico. In a 2019 article titled “A-Z Update on For-Profit Psychiatric Industry Abuse,” CCHR exposed Desert Hills as one of numerous examples of “business as usual” in the for-profit sector of behavioral health companies—allegations of beating, bullying, deaths, fraud, illegal and immigrant child detainment, mistreatment, negligence, physical assault, and prioritizing profits over care and rights of patients.[4]

In July 2022, Senator Patty Murray, Chair of the Senate Committee on Health, Education, Labor, and Pensions, and Senator Ron Wyden, Chair of the Senate Committee on Finance initiated an investigation into the practices, policies, and treatment of youths in residential treatment facilities owned by UHS (behavioral health sector); Acadia Healthcare; Deveraux Advanced Behavioral Health, and Vivant Behavioral Healthcare (aka Sequel Youth & Family Services).[5]

Universal Health Services

CCHR has warned legislators about systemic abuse and fraud in the behavioral treatment system and is critical of the pattern where industry giants like Universal Health Services (UHS) can enter into non-prosecutable settlements, Correction Plans, or Corporate Integrity Agreements (CIAs) with government agencies when abuse or fraud is exposed. However, the facilities they own often become repeat offenders without facing additional consequences.[6] An immediate overhaul of the industry is necessary to strengthen penalties for patient violations and fraud, including criminal prosecutions and the closure of offending hospitals.

A recent incident occurred in June 2023, when a federal workplace safety investigation found that Wekiva Springs Center, a UHS-owned psychiatric facility in Jacksonville, Florida, failed to improve worker safety procedures, resulting in dozens of incidents involving workers being assaulted. The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) reported 182 alleged incidents in 2022, nearly 70% of which required police response in a six-month period, and 10 alleged violent incidents in less than two months in late 2022.[7] OSHA said the findings of its investigation were “shocking.”[8]

However, OSHA recommended a penalty of only $15,625, which is insignificant compared to UHS’s substantial revenue of $13.39 billion from general medical and behavioral health services in 2022[9] The company’s acute and behavioral health business segments secure the company a $163.1 million profit.[10]

“Shocking” fails to appropriately describe the long-term failure of both government agencies and psychiatric associations to clean up the mental health system that is endangering so many lives.

Wekiva Springs Center has a history of abuse. In February 2017, Action Jax News conducted an investigation into both Wekiva Springs and another UHS facility in Florida, River Point Behavioral Health. Multiple patients reported being unjustifiably detained to exploit their insurance coverage. As a result, five former patients filed lawsuits against both River Point and Wekiva Springs.[11]

In January 2016, UHS closed its behavioral residential facility, National Deaf Academy (NDA) in Mount Dora, Florida after being hit with patient abuse allegations.[12] CCHR had filed complaints against NDA based on whistleblower allegations, resulting in the Florida Agency for Healthcare Administration inspecting and citing the facility for inadequacies.[13]

Also in 2016, the Judge David L. Bazelon Center filed an Amicus Brief in court, noting: “UHS facilities continue to commit the same violations again and again,” their “record of repeat violations seems even more alarming when considered in light of some of the company’s statements and its increasing role in our mental healthcare system.”[14] Further, “UHS’s violations are not only common and serious but often repeated as well. Federal and state agencies require ‘plan of correction’ after ‘plan of correction’ to no avail, and UHS facilities continue to commit the same violations again and again.

“UHS has a long history of repeated and serious violations of regulatory requirements regarding staffing, licensure, and supervision, and those violations have had devastating consequences for the patients in UHS’s care…. The company’s staffing problems have been linked to patient injuries and death.”[15]

CCHR’s thousands of complaints filed with legislators across the U.S. have documented UHS, Acadia, and other behavioral hospital chains amassing reports of patient sexual assaults, suicides, and restraint deaths.[16] Congressmen such as Danny Davis and Joe Kennedy III requested the Centers for Medicare and Medicaid Services (CMS) to investigate UHS eight years ago.[17] In December 2016, Senator Charles Grassley said there were still “serious questions about patient safety” at UHS behavioral hospitals.[18]

A Dallas Morning News investigation in 2016 reported that Government inspectors investigating patient complaints cited 44 of UHS’s hospitals in 23 states for dangerously poor care or unsafe conditions between 2012 and mid-2015. Inspectors also found serious problems at 8.4% of UHS hospitals in 2014 compared to a nationwide figure of 3%—more than double the rate of other facilities. A representative of the U.S. Centers for Medicare & Medicaid Services (CMS) said the numbers reveal “that ‘patient complaints against the company aren’t just isolated to one region, but extend across the country.’”[19]

In 2020, UHS was able to enter into another remedial agreement (known as a “Corporate Integrity Agreement” or “CIA”) with the Office of the Inspector General (OIG) as part of a settlement of allegations of fraud which included admitting patients to their residential treatment facilities who did not require that level of care; failing to discharge patients when they no longer required inpatient care; billing for services not rendered and for improper and excessive lengths of stay; and for improper use of physical and chemical restraints and seclusion.[20] UHS and one of its subsidiaries additionally paid $122 million to the United States. The government’s long-running investigation of UHS had stemmed from at least 18 whistleblower lawsuits.[21]

In July of that year, 19 individual complaints about UHS were made public after being kept under seal throughout the Department of Justice fraud case that alleged UHS’s psychiatric hospitals had a range of techniques to “Maximize payment by admitting as many patients as possible and keeping them as long as possible.” “Each [individual complaint] describes a methodical scheme whereby administrators pressured staff to admit patients even when it wasn’t necessary and hold them for as long as their insurance paid out.”[22]

CCHR International’s own investigation found at least 45 UHS-facility-affiliated psychiatrists across the country were high prescribers of psychotropic drugs, citing this as a potential reason for the acts of violence against staff in behavioral hospitals. Studies document how these drugs can induce violent, homicidal, and suicidal effects. Of these, 32 (71%) ranked among the top 25 prescribers of psychotropic drugs in their respective states and some were among the top national prescribers.[23]

CCHR also posted a detailed list on its website of children and teens who were abused or who died in UHS facilities. These include at least 32 incidents of patient sexual abuse, including several convictions of staff responsible; approximately 18 abuses involving seclusion rooms or restraints used on children, including three deaths; wrongful deaths; assaults including breaking a patient’s arm and fracturing the nose of another; and at least 6 suicides that may have been preventable.[24]

UHS has continued its behavioral operations. CCHR filed a complaint with the OIG’s Assistant Inspector General for Legal Affairs about the appalling lack of oversight of UHS facilities while under the July 2020 CIA. It noted that between September and November 2022 alone, there were reports of repeated patient riots; staff placing children in locked seclusion rooms without proper monitoring; patient deaths, and patient sexual assaults.

On January 20, 2023, a federal administrative law judge affirmed that UHS of Delaware, Inc. exposed employees to workplace violence without adequate protections in 2019, particularly at times when hospital staffing was low. In addition, a judge sanctioned UHS of Delaware for destroying surveillance videos showing workplace violence.[25]

CCHR has also filed complaints about patient abuses in UHS’s UK Cygnet Health psychiatric hospitals. In 2019, BBC’s Panorama sent undercover reporter Olivia Davies to work shifts at UHS’s Whorlton Hall hospital, filming staff abuse of patients, leading to criminal prosecutions of 10 staff and the closure of the facility. In April 2023, four staff were found guilty of ill-treating patients and are awaiting sentencing.[26]

Sequel Youth & Family Services & Vivant Behavioral Healthcare

In 2019, two Sequel facilities in Utah, Red Rock Canyon School, and the Mount Pleasant Academy closed following the Utah Department of Human Services finding numerous claims of sexual assault, violence, and neglect. [27] Five months after Senators Murray and Wyden announced their investigation in 2022, a counselor working at another Sequel residential behavioral facility in Utah, Lava Heights Academy, was arrested for and subsequently pleaded guilty to seven second-degree felony charges—five counts of forcible sexual abuse and two counts of sexual exploitation of a minor. On May 16, 2023, he was sentenced to serve between 1-15 years in Utah State Prison on each of the counts ordered to run concurrently.[28]

In 2020, NBC Nightly News estimated that up to 9,000 youths were being treated at Sequel facilities.[29] One of them was Sequel’s Lakeside behavioral hospital in Michigan where in April 2020, a 16-year-old African American foster care teen, Cornelius Frederick, was restrained and subsequently died. Manslaughter charges were filed against two mental health aides and the head nurse in relation to the teen’s death. Geoffrey Fieger, a lawyer for the Frederick family, accused Sequel of running “snake pits” that abuse and prey on kids. “Unless you shine a light on insects and maggots, they proliferate. Certainly, this type of behavior is not human. It can only be akin to a subhuman-type species that would inflict this behavior on children.”[30] The horrific video of Cornelius’ death revealed a “culture of fear and abuse” at Lakeside, where “suffocation is a regular practice…as a form of discipline,” said Fieger.[31]

While many of its facilities closed down in the wake of abuse allegations, in October 2021, it was announced that Sequel’s CEO had formed a new company, Vivant Behavioral Healthcare to buy a majority of the business of Sequel.[32]

CCHR filed a complaint with the Federal Trade Commission (FTC) over how this transaction could occur, given that Sequel had come under such intense scrutiny for systemic abuse of the children in its facilities.[33]

The FTC simply acknowledged receipt of the complaint and has yet to confirm any investigation.

Another issue is that CMS rarely shuts off funding to hospitals, despite repeated allegations of abuse. Exclusion from CMS contracts does not appear to be prevalent. Yet, “Exclusion is an important tool in our ongoing battle against health care fraud,” said Maureen R. Dixon, Special Agent in Charge of the Office of the Inspector General for the U.S. Department of Health and Human Services in 2020.[34] The following year, CMS found hospitals were “fraudulently doctoring (patient) records” and making up “psychiatric disorders” so that they could keep patients longer “for Medicare billing.”[35]

Call for For-Profit Psychiatric Hospital Industry Reform

Since 2020, celebrity Paris Hilton has been integral in raising much-needed awareness of the abuses, especially in facilities treating troubled teens. She has garnered both state and federal legislative support, including the federal Stop Institutional Child Abuse Act introduced in 2023. “While advocates, journalists, and those with lived experience have been sounding the alarm on this issue for decades, the government has not properly tracked the funds utilized to place youth in these settings,” said Rebecca Mellinger, head of impact at 11:11 Media, Hilton’s global media company and platform.[36] The law aims to study the troubled teen industry and make recommendations.

Until this comes to fruition, immediate deterrents for abuse are needed. The Corporate Integrity Agreements that companies sign and the oversight of them are essentially useless, and CMS action in closing down facilities is equally so. Acadia gets fined $485 million but continues to practice and receive Medicare and Medicaid funding.

The behavioral-psychiatric for-profit hospital system is full of graft, greed, cruelty, and appalling levels of abuse—“business as usual” masked as mental health “care”.

Reform of the system must be more than lip service and must include penalties for fraud and patient harm which are serious enough to permanently stop the abuse.

[1] Colleen Heild and Olivier Uytterbrouck, “Foster child sexual assault results in $485 million jury award,” Albuquerque Journal, 11 July 2023,




[5] “Murray, Wyden Demand Answers on Mistreatment at Youth Residential Treatment Facilities,” 22 July 2022,


[7] “Investigation nearly 200 violent incidents at Jacksonville behavioral health facility,” First Coast News, 22 June 2023,

[8] “Federal investigation finds Jacksonville treatment facility failed to improve worker safety procedures despite nearly 200 violent incidents in 2022,” OSHA News Release, Region 4, U.S. Department of Labor, 15 June 2023,



[11]; “Most Duval County mental health patients don’t get hearings required by law,” Action News Jax, 7 Feb. 2017,

[12] citing Aliza Nadi, “National Deaf Academy, Hit with Abuse Allegations, Is Closing,” NBC News, 15 January 2016,


[14]; Amicus Brief (friend of the court) Bazelon Center (Mental Health Law), Supreme Court of the United States, p. 4,

[15] Amicus Brief (friend of the court) Bazelon Center (Mental Health Law), Supreme Court of the United States, p. 22,


[17] citing: “Congressman Kennedy Pushes HHS on Investigation Into Mental Health Network,” Press Release, 23 June 2015,

[18]; citing: “Senator seeks details on UHS investigation from HHS,” Becker’s Hospital Review, 12 Dec. 2016,

[19]; Miles Moffeit, “Danger in the psych ward: Safety issues plague a chain of mental-health hospitals in Texas and across the United States,” Dallas Morning News, 18 March 2016,

[20] CORPORATE INTEGRITY AGREEMENT BETWEEN THE OFFICE OF INSPECTOR GENERAL OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES AND UNIVERSAL HEALTH SERVICES, INC. AND UHS OF DELAWARE, INC., 6 July 2020; “Universal Health Agrees to Pay $122 Million for False Claims Act Violations: Corruption and Crime Compliance,” JDSupra, 27 July 2020,

[21] “Universal Health Agrees to Pay $122 Million for False Claims Act Violations: Corruption and Crime Compliance,” JDSupra, 27 July 2020,

[22] “Child Abuse Allegations in The Behavioral-Psychiatric Industry: Universal Health Services (UHS),” CCHR International, 30 Oct. 2020, citing: Tara Bannow, “Unsealed UHS lawsuits describe improper admissions, extended stays,” Modern Healthcare, 17 July 2020,



[25] “Federal investigation finds Jacksonville treatment facility failed to improve worker safety procedures despite nearly 200 violent incidents in 2022,” OSHA News Release, Region 4, U.S. Department of Labor, 15 June 2023,



[28] Cody Blowers, “Sex offender working with troubled teens in Washington County arrested for failure to register,” St. George News, 23 June 2023,

[29] citing: “The Kids Are Not Alright: How Private Equity Profits Off of Behavioral Health Services for Vulnerable and At-Risk Youth,” Private Equity Stakeholder Project, 17 Feb. 2022,; Hannah Rappleye, Tyler Kingkade and Kate Snow, “A profitable ‘death trap’: Sequel youth facilities raked in millions while accused of abusing children: Sequel Youth & Family Services collected hundreds of millions in tax dollars to care for vulnerable children, despite abuse and negligence allegations,” NBC News, 16 Dec. 2020,

[30]; “Lawsuit filed against company that owned Lakeside Academy,”, 7 Oct. 2021,; Tyler Kincade, “Video shows fatal restraint of Cornelius Frederick, 16, in Michigan foster facility,” NBC News, 7 July 2020,

[31] “Death of black teenager in US juvenile facility sparks outrage,” Gidi Point, 9 July 2020,

[32] “Sequel Pomegranate closes as advocates, Paris Hilton call for change in ‘troubled teen industry,’” 10Investigates, 21 Oct. 2021,

[33] and

[34] “United States Obtains $1.65 Million Resolution for Fraudulent Medicaid Billing Against Behavioral Health Clinic in Northeast Philadelphia: The Clinic Will Also be Prohibited from Participating in Federal Healthcare Programs,” U.S. Attorney’s Office, Eastern District of PA, 6 Jan. 2020,

[35] Charlotte Huffman, Mark Smith “Some Texas psych hospitals continue to hold patients against their will, complaints show,” WFAA, ABC 8, Texas, 18 Mar. 2021,

[36] Ellen Ranta Olsen, “Proposed reforms of ‘troubled teen industry’ fall short of promises,” Youth Today, 29 June 2023,