Behavioral health system titan Acadia Healthcare Co. (Nasdaq: ACHC) revised down its adjusted earnings projections for 2025 by $49 million.

This is the second time in a month that Franklin, Tennessee-based Acadia Healthcare has done so. It announced a downward earnings and revenue guidance adjustment with its third-quarter earnings results. 

On Tuesday, after trading markets closed, Acadia Healthcare issued a press release stating that it would increase its cash reserves for professional and general liability.

“This update reflects higher expected expenses associated primarily with patient-related litigation,” the release states. The move specifically comes after a third-party actuarial review of these costs.

The company’s adjusted EBITDA guidance range is now $601 million to $611 million. On a per-share basis, those estimates are now $1.94 to $2.04.

Acadia Healthcare executives noted that professional and general liability costs ticked up during the third quarter and that the company would incur a “$4 million to $6 million charge related to our professional and general liability expense to reflect the evolving legal environment facing our industry,” Acadia CFO Todd Young said, according to a transcript of the call.

For all of 2025, Acadia Healthcare projects that professional and general liability expenses will total $116 million. That figure was $54 million in 2024, according to the release.

Acadia Healthcare pins the increased expense on the following:

— Higher than expected settlement costs related to policy years before Sept. 1, 2024

— Increase of 168% in claim volume

— Elevation incurred-but-not-reported reserves

— Less favorable reinsurance coverage terms

The company further projects professional and general liability reserves to range between $145 million and $165 million at year-end, up from $78 million at the end of 2024.

Negative headlines have plagued Acadia Healthcare for the last few years. News of patient mistreatment in facilities, missed financial projections and halted de novo project complicate the company’s goal of doubling revenue by 2028, a goal set by CEO Chris Hunter.

“We recognize that our operating environment has faced increasing headwinds as we moved through 2025,” Hunter said during the company’s third-quarter earnings call.