Acadia Healthcare (Nasdaq: ACHC) is bouncing back from COVID-19 in a big way. While the virus temporarily hurt the behavioral health giant’s census back in spring, volumes have since rebounded to record-setting levels.
CEO Debbie Osteen highlighted the company’s impressive recovery and ongoing success Oct. 30 on Acadia’s Q3 2020 earnings call.
“We actually hit the highest census in the history of Acadia in October,” Osteen said, noting that the record relates to the company’s U.S. facilities. “We believe — because of the strong demand trends and the fact that we have such diversity in the service lines — that this is going to continue into 2021.”
Headquartered in Franklin, Tennessee, Acadia operates 582 facilities across 40 states, the United Kingdom and Puerto Rico. Its locations include inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers and outpatient clinics.
In Q3, volumes were fairly strong across all those settings, with Acaida’s acute services line posting especially robust numbers. The one area where volumes remain lower than usual is specialty services lines for which patients usually travel to receive. However, even those volumes are improving.
COVID-19 could be partially to thank for the provider’s recent record census, as the virus is causing more Americans to struggle with behavioral health conditions. On top of that, Osteen attributed it to the company’s recent growth, which has continued amid the pandemic.
“For the first three quarters of 2020, we have added 206 beds to our existing facilities in the US, and we expect to add approximately 100 beds in the fourth quarter,” Osteen said. “As part of our strategy, we have continued our strong track record of partnering with health systems and hospitals across the country, which has created important growth opportunities for Acadia.”
That includes the opening of a 144-bed facility in Reading, Pennsylvania in July, which is the result of a joint venture with Tower Health. Plus, there are more similar opportunities to come, with Acadia’s new JV hospital in Nashville with Ascension Saint Thomas expected to open in Q4 of 2020.
“Together, our bed expansions, de novo facilities and joint ventures provide many growth opportunities for Acadia to reach more patients in new and existing markets and further advance our position in the market, as well as the growth of our business,” Osteen said.
In the past, Acadia leaders have indicated that the sale of its UK business will also present the company with domestic growth opportunities. However, those plans were put on hold earlier this year, when the coronavirus caused the company to pause the deal process.
Now that the Acadia has relaunched the sale, though, it seems the plan is back on track. Osteen provided an update during the Q3 call, though she failed to get into specifics.
“Consistent with market practice for UK transactions of this nature, and in conjunction with our advisors, we have solicited and have now received non-binding offers to acquire our UK business from multiple bidders,” she said.
Driven by its solid volumes, Acadia posted strong financial results in Q3. Overall revenue was up more than 7% year-over-year for the quarter, coming in at $833.3 million.
Meanwhile, U.S. same facility revenue increased to $546.4 million, up 7.5% from Q3 2019. Those facilities also saw a 4.2% year-over-year boost in patient days and a 3.1% increase in revenue per patient day.
As of Sept. 30, Acadia had received about $32.5 million in CARES Act provider relief funding (PRF).
In Q3, it received a $12.8 million (PRF) distribution. Plus, its third-quarter results include a reversal of $18.1 million from other income recorded in the second quarter of 2020 related to PRF.
The company’s stock was up more than 23% as of end-of-day trading Friday. It closed at $35.65.