Acadia Targets Physical Care, Behavioral Health Integration as Opportunity for Growth 

Acadia Healthcare (Nasdaq: ACHC) is focused on value-based care as it invests in technology and expands its service lines.

Franklin, Tennessee-based mental health operator Acadia has identified opportunities for growth in its outpatient, substance use disorder (SUD) treatment and step-down services, according to a presentation at the Raymond James Annual Institutional Investors Conference. It also envisions technological advancements as a catalyst for immediate and long-term gains and a path to value-based care.

Chris Hunter, CEO of Acadia, said it was a “matter of when, not if,” Acadia would engage in value-based care plans.


“It’s why we’ve been making these investments in technology and quality,” Hunter said. “And not just electronic health records (EHRs), but patient monitoring and staff safety as well.”

Behavioral health technology has seen relatively little investment activity, Hunter said. He cites the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 as one potential reason.

The HITECH Act strengthened the civil and criminal enforcement of HIPAA rules and provided funding to operators to promote the adoption of health information technology – but it excluded mental health care and SUD providers. 


That exclusion resulted in behavioral health tools, including those related to EHRs, patient monitoring, communications and analytics, lagging behind other health care industry segments.

Hunter has previously said that Acadia, and the broader behavioral health industry, have not had the proper technology to refer patients with co-occurring conditions to other lines of care within the company. He highlighted technology like EHRs as a pathway to improve referral lines and negotiate stronger positions with payers.

While EHRs are a long-term investment, they also have shorter-term benefits, Hunter said, including increasing employee engagement, attracting new clinicians and expediting surveys with regulators. Down the road, EHRs can be used to negotiate value-based contracts.

“We’re trying to set ourselves up to compete on the strength of our clinical health outcomes,” Hunter said. “When you don’t have an EHR you don’t have data to even have payer conversations to be able to make a case for rate adjustments.”

Hunter also doubled down on Acadia’s move to expand its intensive outpatient programs (IOPs) and partial hospitalization programs (PHPs).

Acadia also seeks to grow its outpatient service line. Hunter said that the company’s comprehensive treatment center (CTC) business is thriving. The company’s CTC segment consists of 157 programs in 32 states, and Hunter previously said that it operates almost like a standalone business.

The SUD business was also identified as an avenue for growth. Hunter cited increasingly potent illicit drugs and the “fourth wave” of the opioid crisis as evidence that the need for treatment is greater than ever.

“The methods that we use, medication-assisted therapy and methadone treatment, will become more necessary [as the severity continues to increase],” Heather Dixon, chief financial officer of Acadia, said. “The alternatives for treatment will probably narrow as the acuity gets broader … our opportunity to meet those needs is significant.”

While growing multiple lines of business, Acadia also sees the integration of physical care as an opportunity for future growth.

“We know that for someone who has a chronic condition if you throw in one behavioral health diagnosis, the physical spin goes up two to four times,” Hunter said.

Behavioral health integration has been top of mind for the Centers for Medicare & Medicaid Services (CMS) as well as the behavioral health industry. CMS launched its Innovation in Behavioral Health (IBH) Model in January, which operates through a “reverse integration” approach.

While pursuing growth, Acadia will also spend time standardizing processes across its organization in the coming year.

“We’re a company that has grown by acquisition and there’s a lot of variation across the company in terms of the way we do things, from training, to IT resources, to digital marketing,” Hunter said. “There continues to be real opportunity for us to normalize that.”

*Editors note: The original version of this story said that Acadia was targeting primary care. Acadia sees an opportunity to integrate with physical care, not primary care.

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