Acadia Healthcare Company (ACHC) is embroiled in multiple securities class-action lawsuits as investors allege the company misled them about its business practices. The most recent lawsuit, filed on October 29, 2024, follows a report by The New York Times revealing that the Veterans Affairs Department is investigating Acadia for potential fraud against government health insurance programs.
The allegations center around Acadia's controversial business model, which purportedly involved holding patients against their will, subjecting them to abuse, and deceiving insurance providers by billing for unnecessary stays. These claims were highlighted in a September 1, 2024, article titled "How a Leading Chain of Psychiatric Hospitals Traps Patients." Following its publication, Acadia's stock price plummeted over 4%.
Further compounding the situation, Acadia disclosed on September 27, 2024, that it had received a subpoena related to its admissions practices and billing from the U.S. District Court for the Western District of Missouri. This disclosure led to a more than 16% drop in the company's share price.
The October 18, 2024, revelation from The New York Times about the ongoing investigation by the Veterans Affairs Department sent Acadia's shares down by over 12%. Reed Kathrein, a partner at Hagens Berman, which is representing the investors, stated, "Acadia Healthcare's alleged actions, if proven true, not only harm vulnerable patients but also jeopardize the interests of its investors." The firm is actively seeking information from whistleblowers to aid in its investigation.