Acadia Healthcare (Nasdaq: ACHC) is executing its M&A strategy as it seeks to grow its geographic footprint.
The largest behavioral health provider in the U.S. announced Tuesday that it acquired three opioid treatment programs (OTPs) in South Carolina, representing the company’s debut in the state’s opioid treatment landscape.
“South Carolina is an underserved market with clear, unmet treatment demand for those suffering from opioid use disorder,” Chris Hunter, CEO of Acadia, said in a statement. “These three clinics have excellent reputations [for] creating positive outcomes for patients through the combination of medication-assisted treatment and clinical services.”
The three OTPs will become part of Acadia’s comprehensive treatment center (CTC) service line and will offer care to all patients, including Medicaid beneficiaries, according to Acadia.
The South Carolina acquisitions mark Acadia’s second recent foray into the Carolinas. The company acquired three North Carolina-based CTCs in March. Dr. Nasser Khan, Acadia’s chief operating officer and former CTC business operations group president, previously told Addiction Treatment Business that North Carolina’s progressive approach to Medicaid access made the state an attractive target for expansion.
Franklin, Tennessee-based Acadia operates 258 behavioral healthcare facilities with approximately 11,400 beds, as of June 30, 2024. The organization has prioritized its CTC business and announced in May that it planned to open 14 new CTCs in 2024.
Growing the company’s footprint through M&A, joint venture partnerships and de novo builds is one prong of a three-part plan Acadia announced in December 2022 to double its annual revenue by the end of 2028. The company also plans to expand its care continuum and improve its technology capabilities.
“As the opioid epidemic continues to intensify, we will continue to expand this important area of our business as we see record demand for our CTC services,” Hunter said in the company’s Q1 earnings call.
M&A is one prong of a five-point growth plan Hunter outlined in the company’s Q2 2023 earnings call. Acadia also plans to grow its footprint through de novos, facility expansion, joint ventures and adding more CTCs.
Including the newly acquired facilities, Acadia now operates 165 CTC locations across 33 states. These facilities offer medications for opioid use disorder (MOUDs) as well as medical care, individual and group therapy, partial hospitalization programs (PHPs), and vocational and educational services.
The three South Carolina clinics were formerly known as Recovery Concepts, Recovery Concepts of the Carolina Upstate and Clear Skye Treatment Center. Acadia will rebrand the facilities as Clinton Comprehensive Treatment Center, Easley Comprehensive Treatment Center and Ridgeland Comprehensive Treatment Center, respectively.
The acquisitions come less than a month after the U.S. Department of Justice (DOJ) announced that Acadia would pay $19.85 million to federal and state governments to resolve allegations of endangering patients and committing Medicare, Medicaid and TRICARE fraud.
Just a few weeks before the DOJ’s announcement, an exposé from the New York Times concluded that Acadia held patients against their will, at times holding patients against their will when it was not medically necessary.
On September 24, Acadia received a voluntary request for information from the United States Attorney’s Office for the Southern District of New York, the company disclosed. The same day, Acadia received a grand jury subpoena from the United States District Court for the Western District of Missouri related to its admissions, length of stay and billing practices. Acadia stated that it anticipated receiving more requests for information and was cooperating fully with authorities.
Acadia released a statement on October 8 stating that media coverage had misrepresented the company’s practices and failed to include context that Acadia has provided life-saving care to over 150,000 patients in 2023.
The provider was also one of several behavioral health companies to be named in a report published by the U.S. Senate Finance Committee that identified “harms, abuses and indignities” rampant in youth residential treatment facilities. In recent days, Senate Finance Committee Chair Ron Wyden (D-Oregon) has also called on the DOJ to investigate Acadia and three other behavioral health providers’ youth treatment programs.
