Acadia Healthcare saw its patient volumes dip as a result of media scrutiny, CFO Heather Dixon told investors.
An investigation published in the The New York Times in September alleged Acadia detained patients beyond medical necessity and blocked patients from leaving, using laws meant for those who pose an imminent threat to themselves or others as justification.
Acadia executives have called the reports inaccurate.
Following the Times investigation, Acadia reached a $19.9 million settlement with the Justice Department to settle allegations it billed state and federal governments for unnecessary behavioral health services.
The for-profit health system reported its third-quarter earnings Oct. 30. On an Oct. 31 call with investors, transcribed by Seeking Alpha, Ms. Dixon said the company's same facility patient day growth was around 3% in October, down from above 5% in September. Acadia believes the media scrutiny caused the dip, Ms. Dixon said.
Ms. Dixon said she expects the disruption to be "transitory in nature."
Executives said the company has been working to engage referral sources and its joint venture partners.
"We placed a lot of emphasis on ensuring that our most important referral sources understand these facts and understand where we believe some of the media reporting has been inconsistent or inaccurate," CEO Chris Hunter told investors.
After the Times investigation was published, Acadia disclosed that it was being investigated by Justice Department offices in Missouri and New York related to its admissions, length-of-stay and billing practices.
The company is also being investigated by the Department of Veterans Affairs for possible fraud, according to the Times.
Mr. Hunter told investors the U.S. District Court for the Southern District of New York withdrew its request for documents. The U.S. District Court for the Western District of Missouri has withdrawn its subpoena request, Mr. Hunter said, and is allowing Acadia to submit documents and information on a voluntary basis.
The company received a subpoena requesting similar information to the previous requests from the Securities and Exchange Commission, Mr. Hunter said.
"It's reasonable to assume that we could receive additional requests for information from other federal agencies in the future as long as the investigation is ongoing," he said. "We are fully engaged and will continue to work through this process."
Acadia's average length of stay is in line with the industry average and lower than that of nonprofit and government facilities, Mr. Hunter said.
"Medical necessity drives patient care decisions at Acadia. These decisions are made by licensed providers and adhere to all associated legal requirements," Mr. Hunter said. "The allegation that Acadia systematically holds patients longer than medically necessary is false and goes directly against everything we do and stand for when it comes to patient care."