Legislation is needed to curb the placement of foster youths in for-profit psychiatric facilities while lack of Medicaid oversight of them being drugged and chemically restrained creates a nation of child neglect, watchdog accuses

By Jan Eastgate,
President CCHR International
February 11, 2020

Legislation introduced in Oregon calls for better oversight of for-profit behavioral hospitals where foster children have been chemically and physically restrained.[1] It’s a measure that Citizens Commission on Human Rights International (CCHR), a mental health industry watchdog applauds and has argued for since 2015 when it discovered that private psychiatric hospital chains were profiting from Medicaid-covered children being admitted to their facilities, including those in foster care.

In October 2019, The Wall Street Journal reported that foster children in Oregon were sent to privately run group homes out of state.[2] An Oregon state memorandum said facilities were owned by Acadia Healthcare, Universal Health Services (UHS) and Sequel Youth and Family Services (Sequel).[3]

Other states as well as various tribal governments, sent kids, including foster youths, to Acadia Montana for treatment.[4] Acadia Montana closed last year after a 9-year-old Oregon girl who was placed there there was found chemically restrained and frequently put in seclusion. Annette Smith, a public defender who represented the girl, contacted state Oregon Senator Sara Gelser, who chaired the Senate Committee on Human Services about the injections being given the child.[5] Children aged 5 to 18 were treated for “behavioral” issues that included hyperactivity and so-called “oppositional defiant disorder,”[6] conditions CCHR says are highly subjectively based.

The Center for Health Journalism pointed out some kids taken into state custody are admitted to “treatment foster care” facilities managed and overseen entirely by for-profit and nonprofit companies. Kids—especially teens—are “disproportionately placed in treatment programs for behavior not uncommon for their age, like smoking pot or sneaking out at night with friends.” According to the July 2018 article, “It’s time to start asking hard questions about treatment foster care near you.”[7]

Starting in 2015, CCHR’s reports to legislators in every state asked such questions—pointing to children being a lucrative market for for-profit psychiatric facilities. According to Acadia’s 10-K SEC filing, “Management believes that children and adolescents are a patient class that is less susceptible to reductions in reimbursement rates.”[8]  It estimated that the Child and Adolescent Behavioral Healthcare market alone would have reached $11 billion in 2014.[9] Acadia’s 2018 Annual Report recorded total revenue of $3.01 billion, up 6.2% compared with $2.84 billion in 2017.[10]

Utah state regulators recently criticized Sequel’s Red Rock Canyon School that closed in August 2019 after “numerous accounts of mistreatment, abuse, acts of violence and overall disrespect toward residents[11]” According to The Salt Lake Tribune, the closure was “amid intense scrutiny following [an] April riot and revelations about the number of staffers accused of assaulting students.”[12] Caleb La Chance, a former resident of the facility, who was in foster care from the age of 5, told Oregon legislators in February that he had been assaulted twice by staff members and had been a part of a riot that left several teens injured. He now wants to help change the way foster children are treated.[13]

Sequel’s Mount Pleasant Academy in central Utah was also shut down, due, the company said, to low enrollment. But Senator Sara Gelser told The Salt Lake Tribune she was concerned the foster children from her state were not safe, at Red Rock and other Sequel facilities.[14]

The Oregon Department of Human Services also vowed that it will no longer send kids to any other facility run by Acadia Healthcare.[15]

The chemical restraint of foster youth continues despite in 2011, the Department of Health and Human Services (HHS) stating its concern about the use of psychotropic drugs among children in foster care. Foster children represented 3% of children covered by Medicaid, yet, based on a study of pharmacy claims in 16 States, they were enrolled in Medicaid and prescribed antipsychotic drugs at nearly nine times the rate of other children receiving Medicaid.[16]

As exposed in 2019, one in four children in foster care between ages 6 and 17 are administered at least one psychotropic drug. A significant number of children are given a combination of two, three, or four drugs at the same time.[17] Nearly one-quarter (24%) of children eligible for child welfare assistance used a psychotropic drug, almost five times the rate of children eligible on a basis other than disability or child welfare assistance (5%), according to Medicaid and CHIP Payment and Access Commission (MACPAC).[18]

Reported in March 2018, a Medicaid statewide quality improvement (QI) collaborative was developed to improve antipsychotic prescribing practices for children. Despite known safety concerns, antipsychotic use among youths, particularly those insured by Medicaid, had increased dramatically over 20 years. Analysis of 2007–2009 data from the U.S. Government Accountability Office (GAO) estimated that antipsychotic use by Medicaid-insured youths increased at over twice the rate among privately insured youths. Furthermore, despite lack of supporting evidence and increased risk of adverse effects, use of multiple antipsychotics for youths was a common practice, with estimates ranging from 4.2% to 9.9%.[19]

Dangerous antipsychotics are not the only drugs administered foster children.  CCHR International recently filed Freedom of Information requests for state information on the number of 0-17 Medicaid recipients was prescribed psychotropic drugs. To date, 11 states have responded reporting stimulants are the top class of drugs prescribed in 10 of these states. Between 2013 and 2017 (the latest figures available), a total 616,594 Medicaid covered children and adolescents in 11 states alone were prescribed psychiatric drugs, of which 73,523 were aged 0-5.

A September 2017 retrospective, cross-sectional study of 3, 271 081 Medicaid-enrolled children also revealed that stimulants (amphetamine-type) accounted for both the highest proportion of expenditures (20.6%) and days of prescription drug use (14.0%) among all medication classes; antipsychotics represented 9.4% and antidepressants 5%.[20]

The Oregon bill is a step in the right direction, but all states should have regulations that prohibit the use of chemical and physical restraints on any child—foster youth or not.

Almost weekly, media report heinous abuses being committed in for-profit psychiatric hospitals, requiring greater government vigilance that could reverse the child neglect crisis that is putting profit before child safety.

But governments are not learning from this pattern of abuse that has been occurring for decades. Penalties for abuse and fraud clearly is not a deterrent.

In the 1990s, CCHR was instrumental in exposing abuse, fraud and excessive drugging of patients in the for-profit psychiatric industry, namely in a chain of hospitals owned by Psychiatric Institutes of America and National Medical Enterprises. In 1991, The New York Times reported that investigators, looking into psychiatric hospitals that were operated for-profit, uncovered evidence of fraud and abuse.[21] The in-depth article addressed the following:

• Children were a target. The number of Americans between the ages of 10 and 19 who were committed to psychiatric units, at public as well as private hospitals, ballooned between 1980 and 1987 by 43% to 180,000 from 126,000, according to the National Center for Health Statistics. A study of 20,000 hospitalized children, conducted by Ira M. Schwartz, a social worker at the University of Michigan, found that up to 75% of the admissions were unnecessary.[22]

• One father said Psychiatric Institute’s Fair Oaks Hospital held his three children, ages 9, 8, and 3, against his will for more than five weeks at a cost of more than $70,000. This was during a custody battle with his wife. They were held unnecessarily as an insurance company found in a later review.

• Walter E. Afield, the president of the Mental Health Programs Corporation, a company that monitored mental health claims for more than 36 leading insurance companies, said the overuse of tests, services or drugs was extremely widespread at private psychiatric hospitals across the nation. Another form of overuse, he said, is keeping patients in hospitals longer than necessary.

• Dozens of patients complained to investigators and a Congressional subcommittee looking into the markups of drugs and supplies often by more than 10 times the cost.

• Robert F. Stuckey, the medical director of the Alcoholism Unit at Fair Oaks Hospital in Summit, N.J., from 1975 until 1985, told New Jersey state insurance investigators that the hospital frequently gave patients the diagnoses that matched the highest insurance coverage.[23] 

Nothing much has changed other than the names of for-profit hospital chains—further evidence that oversight has failed to identify abuses and bring them to account. Consider the following since December 2019. 

• In December, the Associated Press reported that Acadia Healthcare’s Piney Ridge Treatment Center in Fayetteville, Arizona was using chemical injections to restrain young people in seclusion, a violation of federal rules.[24] Under scrutiny, in January 2020 it said it would stop the use of chemical restraints.[25]

• The same month lawsuits were filed against Acadia Montana. In one case, a former patient alleged negligence and assault and battery during his time there seven years ago; in the other, a group of 30 former employees allege Acadia’s sudden closure with just a month’s notice to employees violated federal employee protection laws. [26]

• The Federal Centers for Medicare & Medicaid Services terminated its agreement with Signature Healthcare’s Chicago Lakeshore Hospital on December 23.[27] The hospital cited the loss of federal funding as the reason for the layoffs, according to The Chicago Tribune. Hospital officials told a judge in late December that without access to federal funding it will “undoubtedly close.” A Cook County public guardian sued the hospital in December, alleging youth patients were physically and sexually abused by staff and fellow patients.[28]

• A staff member at a Universal Health Services youth behavioral hospital, Provo Canyon Behavioral Hospital, was charged on February 6, 2020 with first-degree felony sodomy on a child and second-degree felony enticing a minor. Gabriel Michael Lima is accused of sexually abusing a 12-year-old girl he met at work at the hospital. The girl told police that days after she left the facility last September, Lima sent her messages on social media, including photos of his genitals and of himself shirtless. They arranged to meet up at a parking lot in Sandy on September 29, and Lima allegedly drove the girl to a nearby park and forced her to perform a sex act. Bail was set at $500,000.[29]

• A Boulder, Colorado woman is suing Clear View Behavioral Health owned by Strategic Behavioral Health. According to reporterherald.com, the suit, filed late January 2020, alleges that the facility committed negligence, false imprisonment and organized crime violations during its treatment of Lisa Sun who alleges she was kept against her will for eight days. Clear View has 21 days from when Sun’s complaint was filed to respond. The suit is seeking financial compensation for Sun and is requesting a jury trial in the 20th Judicial District.[30] A Denver attorney accused Clear View of “racketeering, fraud, negligence, false imprisonment and outrageous conduct.” Five state and federal investigations and a criminal investigation by the Colorado Attorney General’s office are ongoing. A year-long reporting by “Contact7 Investigates” also occurred into serious accusations against the 92-bed psych hospital. Last June, the Colorado Department of Public Health and Environment (CDPHE), announced it was moving to revoke the hospital’s license. An administrative law judge is scheduled to rule on CDPHE’s request in May.[31]

• WBNS reported Sequel Pomegranate reached a settlement with the Ohio Department of Mental Health and Addiction Services after facing a license revocation due to use of improper restraints and sexual abuse of patients and violence in the facility. One teen was kicked, punched and improperly restrained by a nurse and mental health aide. Both employees were fired but not prosecuted. Part of the agreement is the facility must reduce its patient population to zero and suspend admissions for 120 days. The state still reserves the discretion to begin the process to suspend or revoke Sequel Pomegranate’s license if the facility is found to not be in compliance. [32]

Because Medicaid is a pipeline for the for-profit mental health system and the excessive drug prescribing within it, CMS should also be curbing the mass psychotropic drugging of Medicaid-eligible children and teens while those psychiatrists prescribing the drugs require closer scrutiny of their practices and action taken where abuse is found.

References:

[1] https://olis.oregonlegislature.gov/liz/2020R1/Measures/Overview/SB1566

[2] “After Abuse Allegations, Oregon Brings Back Foster Kids Sent Out of State: Struggling with the most challenging cases, state sent children to privately run homes with little oversight,” Wall Street Journal, 14 Oct. 2019, https://www.wsj.com/articles/after-abuse-allegations-oregon-brings-back-foster-kids-sent-out-of-state-11571045404

[3] https://olis.leg.state.or.us/liz/2019R1/Downloads/CommitteeMeetingDocument/190449

[4] “Acadia Montana: Use of injected medication, tolerated for years in state, draws Oregon outrage,” Montana Standard, 21 Apr. 2019, https://mtstandard.com/news/local/acadia-montana-use-of-injected-medication-tolerated-for-years-in/article_d94f659c-d479-5a6d-979a-305c2d1b9bdf.html

[5] “Advocates Say Oregon Foster Child Abandoned, Drugged Out Of State,” Oregon Public Broadcasting, 10 Apr. 2019, https://www.opb.org/news/article/advocates-say-oregon-foster-child-abandoned-drugged-out-of-state/

[6] Op. cit., Montana Standard, 21 Apr. 2019

[7] https://www.centerforhealthjournalism.org/2018/06/18/it-s-time-start-asking-hard-questions-about-treatment-foster-care-near-you

[8] https://www.sec.gov/Archives/edgar/data/1520697/000119312515069793/d854534d10k.htm

[9] Acadia Healthcare, Investor Presentation, 2015, p. 13

[10] http://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_ACHC_2018.pdf

[11] “Violence, sex abuse and mistreatment: Utah officials threaten to pull the license of this St. George school for troubled youth,” The Salt Lake Tribune, 17 May 2019, https://www.sltrib.com/news/2019/05/17/violence-sex-abuse/

[12] “He was abused by staff at Red Rock Canyon School. Now, this Oregon teen wants to change the foster system that sent him to Utah,” The Salt Lake Tribune, 7 Feb. 2020, https://www.sltrib.com/news/2020/02/07/he-was-abused-by-staff/

[13] Ibid.

[14] “Second Utah facility for troubled teens to close in a month,” KUTV, 16 July 2019, https://kutv.com/news/local/second-utah-facility-for-trouble-teens-to-close-in-a-month

[15] https://www.oregonlive.com/politics/2019/04/oregon-foster-care-scandal-draws-attention-to-use-of-chemical-restraint-in-montana.html

[16] https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/downloads/SMD-11-23-11.pdf

[17] “Ensuring Foster Youth Are Only Prescribed Psychotropic Medication When in Their Best Interest,” Patient-Centered Outcomes Research Institute, https://www.pcori.org/research-results/2019/ensuring-foster-youth-are-only-prescribed-psychotropic-medication-when-their

[18] https://www.macpac.gov/wp-content/uploads/2015/06/Use-of-Psychotropic-Medications-among-Medicaid-Beneficiaries.pdf

[19] “A Medicaid Quality Improvement Collaborative on Psychotropic Medication Prescribing for Children,” Psychiatric Services, 1 Mar. 2018, https://ps.psychiatryonline.org/doi/full/10.1176/appi.ps.201700547

[20] https://pediatrics.aappublications.org/content/140/3/e20171095

[21] Peter Kerr, “Paying for Fraud/A special report; Mental Hospital Chains Accused of Much Cheating on Insurance,” The New York Times, 24 Nov. 1991.

[22] Ibid.

[23]Ibid..

[24] “Records: Arkansas Youth Treatment Center Broke Federal Rules,” The New York Times, 1 Dec 2019, https://www.nytimes.com/aponline/2019/12/01/us/ap-us-youth-center-investigation.html

[25]  https://www.arkansasonline.com/news/2020/jan/26/repairs-underway-at-treatment-center-20/

[26] https://missoulian.com/news/state-and-regional/fallout-continues-after-acadia-montana-s-sudden-closure/article_750bc689-7157-533c-91a1-1e78023b2114.html

[27] https://www.newsbreak.com/illinois/chicago/news/0NmUDIAp/layoffs-at-chicago-lakeshore-abbott-gets-ok-for-less-invasive-heart-pump-technique

[28] “Chicago psych hospital to lay off 275 after federal funding ended,” Becker’s Hospital Review, 8 Jan. 2020, https://www.beckershospitalreview.com/finance/chicago-psych-hospital-to-lay-off-275-after-federal-funding-ended.html

[29] “Staffer at Utah youth hospital accused of forcing sex on 12-year-old former patient,” The Salt Lake Tribune, 7 Feb 2020, https://www.sltrib.com/news/2020/02/06/staffer-utah-youth/; “Charges: Staffer at Utah behavior hospital charged with sexually abusing girl,” Deseret News, 6 Feb 2020, https://www.deseret.com/utah/2020/2/6/21126482/charges-staffer-at-utah-behavior-hospital-charged-with-sexually-abusing-girl

[30] “Johnstown psychiatric hospital facing false imprisonment allegations,”KFKA, 7 Feb. 2020, http://www.1310kfka.com/news/02/johnstown-psychiatric-hospital-facing-false-imprisonment-allegations/

[31] “Denver attorney accuses Johnstown mental health hospital of “racketeering” in lawsuit,” The Denver Post, 20 Jan. 2020, https://www.denverpost.com/2020/01/20/clear-view-behavioral-health-racketeering-lawsuit/

[32]“Ohio reaches settlement with Sequel Pomegranate after threatening to revoke license,” WBNS, ABC TV news, 5 Feb. 2020, https://www.10tv.com/article/ohio-reaches-settlement-sequel-pomegranate-after-threatening-revoke-license-2020-feb