Troubled Mental Health Provider Acquired by Competitor
Psychiatric Solutions Inc., a mental health care provider that has been the subject of several ProPublica stories, will be acquired by Universal Health Services Inc., another large operator of hospitals and psychiatric facilities. The companies announced the deal today.
The Chicago Tribune and ProPublica, in partnership with the Los Angeles Times, have published reports detailing violence, sexual abuse and neglect at several PSI hospitals across the country.
By absorbing PSI, Universal becomes the dominant player nationally in inpatient psychiatric care, with almost 200 facilities across the country. PSI, which has more than 90 hospitals and treatment centers, operates about one in five free-standing psychiatric facilities in the United States.
Wall Street responded positively to the deal, driving Universal’s stock price higher. Universal Health Services will pay $2 billion in cash for the sale and take on $1.1 billion of Psychiatric Solutions’ debt. But PSI’s portfolio may bring headaches as well as benefits.
The company reported last week that the U.S. Department of Justice is investigating its executive compensation practices, demanding records on pay, stock sales, stock options and options exercises, as well as communications between managers and investment firms. In an SEC filing, PSI said it was cooperating and providing the information requested.
Several PSI facilities have drawn harsh sanctions from regulators for failing to meet government health and safety standards. Florida authorities recently halted admissions to Manatee Palms Youth Services, a 60-bed facility for children and adolescents, after repeatedly finding deficiencies that put patients in danger.
In a conference call, Universal Health Services Chief Financial Officer Steve Filton said the company’s staff would work with existing staffers to ensure that acquired facilities provided "the utmost in patient care."
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2 comments
Susan L.
May 25, 2010, 2:28 p.m.
Talk about the blind leading the blind - UHS is being investigated by the Office of the Inspector General of the US Dept. of Health and Human Services and the Virginia Office of the Attorney General for Medicaid fraud. See documents here -
http://www.casewatch.org/civil/universal/complaint.pdf
Susan L.
May 25, 2010, 2:28 p.m.
Here’s more on Universal Health Services in Virginia -
http://www.justice.gov/opa/pr/2010/March/10-civ-219.html
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASETuesday, March 2, 2010
U.S. Files Complaint Against Virginia Medicaid Providers
WASHINGTON – The United States and the Commonwealth of Virginia have filed a False Claims Act complaint in the Western District of Virginia against Medicaid providers Universal Health Services Inc., Keystone Marion LLC and Keystone Education and Youth Services LLC, the Justice Department announced today . These entities did business as the Keystone Marion Youth Center, a residential facility in Marion, Va., which receives Medicaid funds to provide psychiatric counseling and treatment for boys ages 11-17. The United States’ and the Commonwealth of Virginia’s complaint alleges that the defendants billed Medicaid for inpatient psychiatric care that was not provided, in violation of federal and state Medicaid requirements, and falsified records to cover up their serious violations.
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