Federal lawmakers have introduced new legislation calling for more oversight and data transparency from institutional youth treatment programs.
U.S. Representatives Ro Khanna (D-Calif.) and Earl Carter (R-Ga.) introduced a version of the legislation to the House, while Senators Jeff Merkley (D-Ore.), Tommy Tuberville (R-Ala.), Ben Ray Luján (D-N.M.), Chris Murphy (D-Conn.), and Susan Collins (R-Maine) submitted a version to the Senate.
Dubbed the Stop Institutional Child Abuse Act, the bill is focused on promoting more robust information sharing systems among states and promoting best practices in identifying institutional child abuse.
Specifically, the legislation seeks to establish a national working group focused on youth residential programs that includes representatives from the Administration for Children and Families, the Substance Abuse and Mental Health Services Administration (SAMHSA), and other agencies.
“Institutional care, without oversight, all too often becomes institutional abuse,” Merkley said in a statement. “Reforming our residential care system would improve the lives of thousands of children across our country, and it merits our urgent attention.”
It also calls for the National Academies of Sciences, Engineering and Medicine to conduct studies on the impacts of using restraints, seclusion and restrictive interventions at youth residential facilities.
Included under the umbrella of youth residential facilities are therapeutic boarding schools, boot camp experiences, wilderness or outdoor interventions, residential treatment centers, psychiatric residential programs and group homes. All of which have grown in demand as youth mental health problems worsen, catching the attention of health care investors and dealmakers.
“Right now, over 100,000 children are at risk of abuse, neglect and even death due to a complete lack of transparency in the so-called ‘troubled-teen industry.’ We cannot allow this to continue,” Khanna said in a statement. “The Stop Institutional Child Abuse Act will shed light on the abuse and neglect occurring in congregate care programs around the country, and will start reforming a system that has gone unchecked for far too long.”.
A recent report from investment banking firm Capstone Partners found that M&A activity in the pediatric behavioral health sector is at an all-time high. In 2022, there were 57 transactions in the space, up 46.2% year over year, according to the report.
Strategic buyers continued to lead sector M&A activity, accounting for 54.9% of deals in 2022, the report noted.
Some notable acquisitions in the pediatric behavioral health segment include private equity company Consonance Capital Partners’ acquisition of youth mental health provider Embark Behavioral Health, adolescent-focused mental health company Newport Healthcare’s acquisition of psychiatric services provider PrairieCare and PE firm Petra Capital Partners’ investment in Acute Behavioral Health.
The latter deal marked the first facility acquired by Acute Behavioral Health.
“Active sponsors in the Pediatric Behavioral Health Services sector increasingly targeted youth mental health services providers throughout 2022 through add-on acquisitions,” the Capstone report explains. “Many private equity firms have seen the space as an opportunity to bring expertise in efficiencies and key performance indicators, scaling portfolios to enhance the quality of care.”
The federal government has also invested in youth behavioral health programs. For example, the Bipartisan Safer Communities Act dedicated $245 million toward youth behavioral health.
