Universal Health Services’ (NYSE: UHS) behavioral health business faced headwinds in the first quarter of 2025 due to weather conditions in certain locations and a leap year, according to company leadership.

Specifically, the provider said the inclement weather led to lower outpatient and adolescent-adjusted admission rates, which dropped 1.6% year over year. Company leadership noted that winter weather closed down schools. 

“That has a big impact on our child and adolescent population, and admissions in our child and adolescent population,” Steve Filton, chief financial officer at UHS, said on a Tuesday earnings call. “And the other thing that the weather impacts is our outpatient programs. Obviously, from an inpatient perspective, we may lose admissions over a two, three or four-day period if the weather is bad, but we obviously continue to treat the patients that we have. But our outpatient programs pretty much closed down during those days where it’s difficult for people to travel and they can’t clear the roads, etc. So we really see an outsized impact on our outpatient and our child and adolescent business when we experience those winter conditions.”

However, the provider does not foresee any structural changes, such as changes in referral patterns, in the future. Filton noted that the company predicts it will get back on track to grow its patient day revenue by 2.5% to 3% by the end of the year. 

Despite overall challenges, the company’s behavioral health segment showed promising growth, with net revenue increasing 5.8% per adjusted patient day and 7.2% per adjusted admission.

Filton attributed the growth in net revenue to improved contractual pricing, particularly from its managed Medicaid payer partners.

Still, that growth may be slowing as the initial price increases take effect and anniversary them. 

“I also think that as capacity increases in the behavioral health industry in general, it diminishes a little bit of our leverage over the payers, who, I think right now, have to deal with a scarcity of capacity, particularly inpatient capacity, where they can send their patients,” Filton said. “So again, I think the pattern that we’re seeing in terms of strong behavioral pricing is one that we’ve been seeing for some time. It is moderated. A little bit is moderating more slowly than maybe we originally anticipated, and that our guidance presumed.”

That wasn’t the only uncertainty UHS’ behavioral health business will face for the rest of 2025. There are still a lot of uncertainties around Medicaid. The provider is still waiting on supplemental Medicaid payment approvals in Tennessee and Washington, D.C.

There are still many unknowns regarding the future of Medicaid in the U.S.