Acadia Healthcare incurred more than $30 million in expenses related to government investigations into its business in the first quarter of 2025.
The behavioral health provider reported its first-quarter earnings May 12. Acadia brought in $770.5 million in revenue in the first quarter, relatively flat year over year. Same-facility revenue increased by 2.1% since 2024.
According to the company’s first-quarter report, Acadia spent $31 million on costs related to government investigations in the first three months of 2025. During the same time period last year, it spent less than $500,000 on investigation costs.
In September, Acadia disclosed that it was being investigated by the Department of Justice offices in Missouri and New York related to its admissions, length-of-stay and billing practices. The company has disclosed other investigations from the Securities and Exchange Commission.
“We have the DOJ and the SEC that we are working very cooperatively and diligently with. We have engaged an excellent law firm to help us with this so we can continue to work and participate with them. We’ve undertaken significant efforts to respond as quickly as possible to respond to all of the inquiries we have,” CFO Heather Dixon told investors on a May 13 call.
The government inquiries follow multiple investigations into Acadia’s facilities published in The New York Times. Acadia Healthcare executives have disputed the accuracy of the reports.
In November 2024, the company cited media scrutiny as the cause of referral volumes to dip slightly, though volumes began to recover by its next earnings report in February. Acadia has identified a “handful of underperforming facilities” where it claims it is working to improve growth.
The underperforming facilities tended to be correlated with intense local media coverage, rather than national scrutiny, CEO Chris Hunter told investors on May 13.
Mr. Hunter said quality and safety is foundational to the company’s strategy, and it continues to invest in quality initiatives.
“Behavioral health is complex, but it is clear the need has never been greater for high quality behavioral healthcare given the severe mental health crisis that our nation faces,” Mr. Hunter said. “Our strategy at Acadia remains centered on high-quality care and clinical health outcomes, and we will continue to prioritize our quality initiatives and expand them when necessary.”
