By CCHR International
The Mental Health Industry Watchdog
January 16, 2017

Despite multiple U.S. Federal and state investigations into potential billing fraud or patient abuse, the largest psychiatric hospital chain in America has been approved to expand its behavioral health business in the United Kingdom. The mental health watchdog, Citizens Commission on Human Rights International (CCHR), charges that this could put UK patients at potential risk and needs investigating. Universal Health Services (UHS) completed its acquisition of Cambian Group, PLC’s Adult Services Division in December 2016, which added 81 behavioral facilities to the Cygnet psychiatric hospital chain UHS bought in 2014. It now owns 102 facilities in the U.K.[1]

The acquisition was approved and finalized despite a December 7, 2016 BuzzFeed News exposé in the U.S. reporting that “current and former employees” in UHS’s behavioral facilities said they “were under pressure to fill beds by almost any method—which sometimes meant exaggerating people’s symptoms or twisting their words to make them seem suicidal—and to hold them until their insurance payments ran out.”[2]

Within six hours of the exposé, U.S. stocks in UHS plummeted 12 percent or £1.2 billion ($1.5 bn) and continued to fall over the next two weeks.[3] Several U.S. Congressmen denounced UHS’ alleged misconduct, including Senator Charles Grassley, head of the U.S. Senate Judiciary Committee, who sent a letter to the U.S. Department of Health and Human Services that called for details of its ongoing investigation. He said the report “paints a picture of greed and raises serious questions about patient safety” at the UHS behavioral hospitals.[4] About 20 law firms have announced they have begun investigating UHS or are participating in a class action lawsuit on behalf of investors, with an initial Class Action lawsuit filed on December 23.[5]

CCHR, which has been investigating allegations against UHS’s psychiatric hospitals since 2008, said the acquisitions and expansion of UHS’s for-profit psychiatric business in the UK should have waited for the outcome of U.S. investigations.

In November 2015, CCHR wrote the Competition and Markets Authority (CMA), the National Health Service (NHS) and the Care Quality Commission (CQC) warning about the allegations against UHS’s psychiatric operations in the U.S. On 29 January 2016, David Behan, Chief Executive of CQC wrote CCHR saying the allegations were “serious” and “We are very concerned to read about the issues that have been identified in UHS in America and we note your concerns about these in relation to the services provided by Cygnet Healthcare since they were acquired by UHS.”[6]

The complaint to UK authorities cited:

• “Patient suicides, restraint deaths, falsification of records, body-slamming patients into walls and sexual assault are just some of the abuses reported in UHS behavioral facilities that U.S. state authorities or the U.S. Centers for Medicare and Medicaid Services (CMS) have investigated.”

• In April 2015, UHS’s Rock River Academy (for juveniles) in Illinois closed after the state Department of Children and Family Services refused to send juvenile wards there because of, among other things, the use of restraint procedures. The rate of physical restraints was nearly eight times the median for all Illinois facilities.[7] On September 9, 2015, a lawsuit was filed against Rock River on behalf of five adolescent females, who alleged sexual abuse and rape by staff.[8]

• A Chicago Tribune investigation also found that staff administered psychotropic drugs like the antipsychotic chlorpromazine in dosages that were far higher than doses at similar youth facilities. Residents said they were knocked out for hours at a time from the drugs.[9]

• CCHR says that hundreds of psychiatrists employed in UHS behavioral facilities should also be investigated for potential high prescription rates of psychotropic drugs.

Like “Switching Seats on the Titanic”

Daniels from CCHR UK says the level of allegations against UHS’s psychiatric sector should be raising alarm in the UK, which has already seen massive abuse reported in its system and the need for better care.[10]

“We see reports of a 21 percent increase in mental health patient deaths in England over a three year period; more than 6,000 instances of physical restraint being used on patients, who are increasingly being hurt as a result of the restraints, and rape or sexual assault of patients in hospitals, significantly ‘mental health units,’ being rife,” Daniels said.[11] “The solution can’t be to instill patient care into facilities now owned by a company whose psychiatric facilities in the U.S. have been accused of similar abuse. It’s like switching seats on the Titanic.”

In its presentation to U.S. investors in December 2014, UHS pointed out the profitable venture moving into the UK, where there had been a one percent decrease in NHS beds between Dec. 2013 and March 14, 2014 and that NHS bed closures were “expected to continue.” Therefore, it could be predicted that this could lead to a “continuing trend towards more outsourcing to independent sector provision” (i.e., UHS), “partnerships with the NHS” and “contracting opportunities.”[12]

Other U.S. behavioral healthcare companies also see the UK as a lucrative market.  In October 2016, Acadia Healthcare announced the sale of 21 behavioral health facilities in the UK that it hoped would clear antitrust obstacles to its £1.28 billion ($1.6 bn) acquisition of psychiatric hospital Priory Group.[13]

The background behind the two behavioral firms reveals that in 2010, UHS bought the U.S.-based Psychiatric Solutions Inc. (PSI), including its then legal liabilities. This included a lawsuit against PSI filed on September 21, 2009 on behalf of shareholders over allegations that “PSI failed to sufficiently staff its facilities, resulting in alarming incidents of abuse, neglect, and even death of its patients, and downplayed the significance of these events when they became public.”  The case settled for £53.2 million ($65 million) in 2015.[14] All but one of the current corporate officers of Acadia Healthcare is a previous owner and/or officer of PSI.

UHS defends the allegations against it, claiming that the U.S. Joint Commission has designated about 80 of its behavioral facilities as a “Top Performers on Key Quality Measures.”[15] The Commission is an accrediting organization that conducts surveys of healthcare facilities upon which it certifies their performance. However, such surveys are paid for by the health care corporations or facilities. [16] The Commission also does not require accredited organizations to report patient safety events that result in severe temporary harm, permanent harm or deaths of patients.[17] And an Office of the Inspector General report called, “Adverse Events in Hospitals: State Reporting Systems” found staff from 15 of 26 states “acknowledged that hospitals do not always submit reports when adverse events occur.”[18]

In February 2016, The Financial Times reported that Britain’s £16 billion ($19.5 bn) mental health industry was braced for a wave of consolidation as investors sought to take advantage of a rise in NHS outsourcing. The Times reported, “US companies Acadia Healthcare and Universal Health Services entered the UK market for the first time in last year, helping to fuel a dealmaking spree in the sector. The number of takeovers of mental healthcare providers rose from 16 in 2014 to 22 in 2015.” Acadia accounts for about a third of the UK’s private behavioral services.[19]

CCHR says a UK-wide investigation is needed into not only how a company under U.S. federal investigation and others were allowed to take over the private mental health sector and must tackle the lack of accountability in the mental health system, both in financial terms and also the poor response rate to the treatment given individuals.

About CCHR:  CCHR is a 47-year mental health watchdog established by the Church of Scientology and Dr. Thomas Szasz, professor of psychiatry, to investigate and expose human rights abuses in the mental health system. It has been responsible for more than 180 laws being passed that protect individuals against abuse.

References:

[1] “Universal Health Services, Inc. Completes the Acquisition of Cambian Group PLC’s Adult Services Division,” PR Newswire, 28 Dec. 2016, http://www.prnewswire.com/news-releases/universal-health-services-inc-completes-the-acquisition-of-cambian-group-plcs-adult-services-division-300383892.html.

[2] Rosalind Adams, “Intake,” BuzzFeed News, 7 Dec 2016, https://www.buzzfeed.com/rosalindadams/intake?utm_term=.fgZ69127n#.amO6aY3PL.

[3] Matthew Zeitlin, “UHS Loses $1.5 Billion in Value After Investigation Into Its Hospitals,” BuzzFeed News, 8 Dec 2016, https://www.buzzfeed.com/matthewzeitlin/uhs-loses-1-5-billion-in-value?utm_term=.creK3xe9p#.yhnnM4wXA; Rosalind Adams, “Intake,” BuzzFeed News, 7 Dec 2016, https://www.buzzfeed.com/rosalindadams/intake?utm_term=.fgZ69127n#.amO6aY3PL.

[4] Rosalind Adams, “Federal Investigation into UHS Must Stay Secret, Says Inspector General,” BuzzFeedNews, 22 Dec. 2016, https://www.buzzfeed.com/rosalindadams/federal-investigation-into-uhs-must-stay-secret-says-inspect?utm_term=.ondaX9YQzL#.xwp9kVARPj; “Senator seeks details on UHS investigation from HHS,” Becker’s Hospital Review, 12 Dec. 2016, http://www.beckershospitalreview.com/legal-regulatory-issues/senator-seeks-details-on-uhs-investigation-from-hhs.html.

[5] “EQUITY ALERT: Rosen Law Firm Files Securities Class Action Lawsuit Against Universal Health Services, Inc. – UHS,” Yahoo! Finance, 23 Dec. 2016, http://finance.yahoo.com/news/equity-alert-rosen-law-firm-170000428.html; “SHAREHOLDER ALERT: Bronstein, Gewirtz & Grossman, LLC Announces Investigation of Universal Health Services, Inc. (UHS),” PRNewswire, 8 Dec 2016, http://www.prnewswire.com/news-releases/shareholder-alert-bronstein-gewirtz–grossman-llc-announces-investigation-of-universal-health-services-inc-uhs-300375281.html; “SHAREHOLDER ALERT: Goldberg Law PC Announces an Investigation of Universal Health Services, Inc. and Advises Investors with Losses to Contact the Firm,” Business Wire, 7 Dec 2016, http://www.businesswire.com/news/home/20161207006425/en/SHAREHOLDER-ALERT-Goldberg-Law-PC-Announces-Investigation; “IMPORTANT SHAREHOLDER ALERT: Lundin Law PC Announces an Investigation of Universal Health Services, Inc. and Advises Investors with Losses to Contact the Firm,” Business Wire, 8 Dec 2016, http://www.businesswire.com/news/home/20161208005958/en/IMPORTANT-SHAREHOLDER-ALERT-Lundin-Law-PC-Announces; “Salpeter Gitkin LLP Announces Investigation of Fraud Claims on Behalf of Investors in Universal Health Services, Inc.,” Nasdaq Global Newswire, 8 Dec 2016, https://globenewswire.com/news-release/2016/12/08/896258/0/en/Salpeter-Gitkin-LLP-Announces-Investigation-of-Fraud-Claims-on-Behalf-of-Investors-in-Universal-Health-Services-Inc.html; “Wolf Popper LLP Announces Investigation of Fraud Claims on Behalf of Investors in Universal Health Services, Inc.,” PRNewswire, 7 Dec 2016, http://www.prnewswire.com/news-releases/wolf-popper-llp-announces-investigation-of-fraud-claims-on-behalf-of-investors-in-universal-health-services-inc-300374887.html; “INVESTOR ALERT: Law Offices of Howard G. Smith Commences Investigation on Behalf of Universal Health Services, Inc. Investors,” Business Wire, 8 Dec 2016, http://www.businesswire.com/news/home/20161208006233/en/INVESTOR-ALERT-Law-Offices-Howard-G.-Smith; “SHAREHOLDER ALERT: Levi & Korsinsky, LLP Announces an Investigation Concerning Possible Violations of Federal Securities Laws by Certain Officers and Directors of Universal Health Services, Inc.,” Digital Journal, 8 Dec 2016, http://www.businesswire.com/news/home/20161208006146/en/SHAREHOLDER-ALERT-Levi-Korsinsky-LLP-Announces-Investigation; “UHS NOTIFICATION: Faruqi & Faruqi, LLP Encourages Investors Who Suffered Losses In Excess Of $100,000 Investing In Universal Health Services, Inc. To Contact The Firm,” PRNewswire, 8 Dec 2016, http://www.prnewswire.com/news-releases/uhs-notification-faruqi–faruqi-llp-encourages-investors-who-suffered-losses-in-excess-of-100000-investing-in-universal-health-services-inc-to-contact-the-firm-300375697.html; “IMPORTANT INVESTOR ALERT: Khang & Khang LLP Announces an Investigation of Universal Health Services, Inc.,” Business Wire, 8 Dec 2016, http://www.businesswire.com/news/home/20161208006322/en/IMPORTANT-INVESTOR-ALERT-Khang-Khang-LLP-Announces; “Bragar Eagel & Squire, P.C. Is Investigating Universal Health Services, Inc. (UHS) on Behalf of Stockholders and Encourages Investors to Contact the Firm,” Business Wire, 13 Dec 2016, http://www.businesswire.com/news/home/20161213006389/en/Bragar-Eagel-Squire-P.C.-Investigating-Universal-Health; “Glancy Prongay & Murray LLP Commences Investigation on Behalf of Universal Health Services, Inc. Investors,” Business Wire, 15 Dec 2016, http://www.businesswire.com/news/home/20161215006062/en/Glancy-Prongay-Murray-LLP-Commences-Investigation-Behalf; “UNIVERSAL HEALTH SERVICES INVESTOR ALERT: Hagens Berman Alerts Universal Health Services Investors to Securities Class Action and Lead Plaintiff Deadline,” Globe Newswire, 9 Jan 2017, http://www.globenewswire.com/news-release/2017/01/09/904445/0/en/UNIVERSAL-HEALTH-SERVICES-INVESTOR-ALERT-Hagens-Berman-Alerts-Universal-Health-Services-Investors-to-Securities-Class-Action-and-Lead-Plaintiff-Deadline.html; “UNIVERSAL HEALTH SHAREHOLDER ALERT BY FORMER LOUISIANA ATTORNEY GENERAL: Kahn Swick & Foti, LLC Reminds Investors with Losses in Excess of $100,000 of Lead Plaintiff Deadline in Class Action Lawsuit Against Universal Health Services, Inc. – UHS,” Globe Newswire, 28 Dec 2016, https://globenewswire.com/news-release/2016/12/28/901983/0/en/UNIVERSAL-HEALTH-SHAREHOLDER-ALERT-BY-FORMER-LOUISIANA-ATTORNEY-GENERAL-Kahn-Swick-Foti-LLC-Reminds-Investors-with-Losses-in-Excess-of-100-000-of-Lead-Plaintiff-Deadline-in-Class-A.html; “UHS SHAREHOLDER ALERT: The Law Offices of Vincent Wong Notifies Investors of a Class Action Involving Universal Health Services, Inc. and a Lead Plaintiff Deadline of February 21, 2017,” Globe Newswire, 3 Jan 2017, https://globenewswire.com/news-release/2017/01/03/902935/0/en/UHS-SHAREHOLDER-ALERT-The-Law-Offices-of-Vincent-Wong-Notifies-Investors-of-a-Class-Action-Involving-Universal-Health-Services-Inc-and-a-Lead-Plaintiff-Deadline-of-February-21-2017.html; “SHAREHOLDER ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of United Health Services, Inc.,” PRNewswire, 9 Dec 2016, http://www.prnewswire.com/news-releases/shareholder-alert-pomerantz-law-firm-investigates-claims-on-behalf-of-investors-of-united-health-services-inc-300376216.html; “RM LAW Announces Class Action Lawsuit Against Universal Health Services, Inc.,” PRNewswire, 6 Jan 2017, http://www.prnewswire.com/news-releases/rm-law-announces-class-action-lawsuit-against-universal-health-services-inc-300387254.html; “Robbins Arroyo LLP: Universal Health Services, Inc. (UHS) Misled Shareholders According to a Recently Filed Lawsuit,” Business Wire, 28 Dec 2016, http://www.businesswire.com/news/home/20161228005460/en/Robbins-Arroyo-LLP-Universal-Health-Services-UHS.

[6] David Behan, Chief Executive of UK Care Quality Commission, letter to Mr. Brian Daniels, Citizens Commission on Human Rights, UK, 29 Jan. 2016, https://www.cchrint.org/pdfs/care-quality-commission-response-uhs-jan-2016.pdf.

[7] “Center for troubled girls will close, cites decision by DCFS,” Chicago Tribune, 28 Jan. 2015, http://www.chicagotribune.com/news/watchdog/rtc/chi-youth-treatment-rock-river-20150128-story.html.

[8] Lorraine Bailey, “Severe Abuse Alleged at Illinois Home for Girls,” Courthouse News Service, 10 Sept. 2015, http://www.courthousenews.com/2015/09/10/severe-abuse-alleged-at-illinois-home-for-girls.htm; Case No. 2015-L-009253, Cook County Circuit Court, Illinois, Filed 9/9/2015.

[9] “Horrors Behind These Walls: Stories Of Alleged Physical, Emotional, And Sexual Abuse At Rock River,” My Stateline.coe.,2/02/2015, http://www.mystateline.com/fulltext-news/d/story/horrors-behind-these-walls-stories-of-alleged-phys/33880/G4ZGF7fcmUWbrwKb0-N5ZQ.

[10] https://www.theguardian.com/commentisfree/2016/feb/17/readers-failed-mental-health-services.

[11]“Spike in mental health patient deaths shows NHS ‘struggling to cope’,” The Guardian, 25 Jan. 2016, https://www.theguardian.com/society/2016/jan/26/rise-mental-health-patient-deaths-nhs-struggling-to-cope; “Mental health patient ‘abuse’ fears,” Wigan Today, 30 Sept. 2016, http://www.wigantoday.net/news/mental-health-patient-abuse-fears-1-8156481; “Sexual violence soars in UK hospitals: Records show 50% rise in reports of sexual attacks, with more than 1,600 in past three years,” The Guardian,  31 Dec. 2014, https://www.theguardian.com/society/2014/dec/31/sexual-violence-soars-uk-hospitals.

[12] UH Investor Presentation, Dec. 2014, http://ir.uhsinc.com/phoenix.zhtml?c=105817&p=irol-IRHome.

[13] Dave Barkholz, “Acadia hopes U.K. sale of 21 facilities greenlights bigger Priory acquisition,” Modern Healthcare, 25 Oct. 2016, http://www.modernhealthcare.com/article/20161025/NEWS/161029965; “US-owned Acadia Healthcare buys the Priory for £1.28bn.” The Guardian, 4 Jan. 2016, https://www.theguardian.com/business/2016/jan/04/us-owned-arcadia-healthcare-buys-the-priory-for-128bn.

[14] “Shareholders Obtain $65 Million Settlement in Psychiatric Solutions,” Robins Geller, Rudman and Dowd, LLP, 17 Jan. 2015.

[15] “Universal Health Services, Inc. Statement Regarding Recent BuzzFeed Article,” PRNewswire, 8 Dec 2016, http://www.prnewswire.com/news-releases/universal-health-services-inc-statement-regarding-recent-buzzfeed-article-300375154.html.

[16] https://www.jointcommission.org/facts_about_federal_deemed_status_and_state_recognition/.

[17]  https://www.jointcommission.org/sentinel_event_policy_and_procedures/.

[18] “Adverse Events in Hospitals: State Reporting Systems,”GAO, 2008, p. ii, https://oig.hhs.gov/oei/reports/oei-06-07-00471.pdf.

[19] “US investors lead dealmaking spree in British mental healthcare Acadia’s purchase of Priory to unleash wave of consolidation,” The Financial Times, 7 Feb 2016, https://www.ft.com/content/3752d508-c8e3-11e5-be0b-b7ece4e953a0.