Owner of NC psych hospitals under scrutiny from US Senate

Former employees say NC psych hospital rife with violence, abuse

By Taylor Knopf

A U.S. Senate report released last week accused four of the nation’s largest behavioral health companies of putting profits above the safety and treatment of children placed in their care. 

The blistering report — Warehouses of Neglect — is the result of a two-year investigation by Senate Finance Committee Chair Ron Wyden (D-Oregon) into psychiatric residential treatment facilities run by Acadia Healthcare, Devereux Advanced Behavioral Health, Vivant Behavioral Healthcare and Universal Health Services. UHS manages nearly a quarter of North Carolina’s licensed inpatient psychiatric beds. 

Some children with complex mental health needs are placed in long-term psychiatric treatment with a goal of receiving specialized intensive care, but the Senate committee’s investigation found that too often that doesn’t happen. These facilities “offer minimal therapeutic treatment in deficient physical settings with lean staff composed of non-professionals, which maximizes per diem margins,” according to the report. 

“The experiences and trauma these kids are left with reads like something from a horror novel,” Wyden said during a Senate Finance Committee hearing on June 12 where he presented the final report.

The lack of trained staff results in little to no mental health therapy, and, the report said, staffing shortages lead to children attempting self-harm, patients escaping from facilities and even child fatalities. The report also documented frequent occurrences of patient sexual abuse by staff and by other patients. The investigation found that the facilities improperly used seclusion and chemical restraints — such as padded rooms and powerful sedatives — to control children in ways that violate federal regulations.

In North Carolina, Universal Health Services manages 562 of the state’s 2,401 licensed psychiatric inpatient beds and has been under repeated scrutiny from state and federal regulators. The company owns Brynn Marr Hospital in Jacksonville, Holly Hill Hospital in Raleigh and Old Vineyard Behavioral Health Services in Winston-Salem. 

NC Health News and WRAL-TV recently published a twopart investigation into Brynn Marr Hospital in which more than a dozen former employees alleged the facility was a chaotic, violent place for staff and patients. They described conditions similar to what was documented in the Senate report, alleging that the understaffing and frequent turnover at the hospital led to unchecked violence from patients, as well as conditions that allowed patient-to-patient sexual assault. 

The former Brynn Marr staff members also alleged that hospital officials pushed medication over therapy and offered little in the way of mental health treatment. Former employees told NC Health News that they were instructed by hospital management to falsify records — including documenting more severe diagnoses for patients to make them appear sicker than they were — so that Brynn Marr could send higher bills to insurers. 

Brynn Marr’s chief executive denied the allegations made by the former employees. In response to the Senate’s report, Universal Health Services said in a statement: “We vehemently dispute this characterization of our facilities.” The UHS statement acknowledged that there have been some harmful incidents over time, but said the company “provided information demonstrating the rates of such occurrences are extremely rare across the UHS spectrum and disproves this inaccurate portrayal.”

U.S. Sen. Ron Wyden (D- Oregon) holds a stack of statements from former patients who said they were harmed at psychiatric residential treatment facilities. Credit: U.S. Senate Finance Committee livestream

Nonetheless, the U.S. Senate investigation concluded that the risk of harm to children in psychiatric facilities operated by Universal Health Services and the other three companies is “endemic to the operating model.”

“Unfortunately, it seems more often than not, abuse and neglect is the norm at these facilities,” Wyden said during the June 12 committee hearing. “The providers running these treatment facilities have figured out how to turn big profits off of taxpayer-funded child abuse.” 

Wyden said these companies rely on public funds through Medicaid and child welfare dollars, adding that Medicaid pays $1,200 per day for each patient. In North Carolina, the federal government pays for 67 cents out of every dollar spent on care, with the balance coming out of state coffers.

Medicaid payments from across the nation made up 39 percent of Universal Health Services’ behavioral health segment last year, which generated $6.2 billion in total revenue, according to the Senate report. The company’s CEO Marc Miller — who declined to appear before the Senate committee — made $14.5 million last year.

Call for accountability

The Senate committee’s report includes multiple recommendations, including raising standards of care and increasing oversight of residential psychiatric facilities. 

“I want to work in a bipartisan way to shut off the firehose of federal funding for these facilities to put an end to this cycle of abuse,” Wyden said during the committee hearing. “In order to get a dime from Medicaid, or any other program in our jurisdiction, all these facilities are going to have to start providing actual care.”

Sen. Mike Crapo (R-Idaho), a ranking member of the Senate Finance Committee, said the incidents described in the report are “deeply disturbing.”

“Facilities entrusted with caring for our most vulnerable youth should be held to the highest standards and subject to routine and reliable oversight. Chronic patterns of failure must not go unnoticed or unaddressed,” he said during the hearing. “Hardworking taxpayers should not be funding anything less than superior care.”

U.S. Sen. Thom Tillis (R-North Carolina) has made mental health issues a key part of his legislative agenda in Washington. He sits on the Senate Finance Committee, but he could not attend the June 12 hearing because he was in another committee at the same time. 

“We have not yet seen discussions about legislation stem specifically from the hearing, however, this is an issue Senator Tillis takes seriously, which is why he is a co-sponsor of the bipartisan Stop Institutional Child Abuse Act, legislation that aims to transform how youth residential programs are overseen and managed across the country,” according to a statement from Tillis’ office. “By addressing long-standing issues of transparency and accountability, the bill seeks to safeguard the health and well-being of vulnerable youths housed in these facilities.” 

According to the Senate investigative report, federal and state oversight authorities have failed to effectively identify and address the problems in residential psychiatric facilities. 

“[The facilities] often respond to deficiencies by citing facility policy that complies with state and federal rules, by drafting new policy, or retraining/terminating the individuals involved. These actions fail to address the underlying culture of harm,” the report reads.

The Senate report included citations from a NC Health News article published in late 2022 in which an 11-year-old patient at Brynn Marr Hospital alleged she was neglected by staff and sexually assaulted by a teenage patient, which ultimately prompted a visit from state regulators. However when the child’s parents first filed a complaint with the state health department, they were told the deficiencies didn’t rise to the level of severity for an investigation. It was only after the child’s experience was published in NC Health News and the News & Observer that state regulators made a surprise visit to the facility. 

In 2023, state regulators subsequently found that staff failed to provide a safe and therapeutic environment for patients and failed to ensure daily visits from a psychiatrist. Regulators put the hospital under “immediate jeopardy” after finding multiple other deficiencies, including conditions that allowed an adolescent patient to escape. Immediate jeopardy is the most severe citation a hospital can receive, indicating serious harm or death has or is likely to occur, to one or more patients, requiring immediate action.

The hospital was given until June 2, 2023, to get back into compliance or risk losing the ability to bill federally funded programs such as Medicaid. According to the state Department of Health and Human Services, the hospital took the necessary corrective actions before the deadline.

NC Health News has heard from dozens of additional patients, their parents and former staff who have been at the hospital since it was deemed back in compliance. They allege to NC Health News that nothing has changed.  

State budget proposals overlook oversight agencies 

North Carolina health leaders have also been critical of the current psychiatric residential treatment model and its effectiveness. 

Earlier this year when state lawmakers provided funds to increase behavioral health rates for Medicaid programs, N.C. Secretary of Health and Human Services Kody Kinsley told NC Health News that his department intentionally left out psychiatric residential treatment facilities, also known as PRTFs. 

He said his department didn’t increase their rates “because significant work needs to be done to ensure any future increase in PRTF payments are tied to quality outcomes and a higher staff-to-patient ratio.”

North Carolina Sen. Jim Burgin (R- Angier) wanted to see what these facilities were like for himself and joined Disability Rights North Carolina, an oversight agency, on a monitoring visit last year where he toured facilities (not owned by Universal Health Services) and interviewed children. 

“I would not board a dog in the two that I went to. They were terrible. They were not clean. The staff are not helping those kids. They get 15 minutes a week of therapy or counseling,” Burgin said.

He said he believes that many of these residential facilities are only making children with complex mental health needs worse.

“I got [the Division of Health Service Regulation] to go in there and shut them down and put them out of business,” Burgin said of two facilities he declined to name. “But we have got to do a better job. We don’t need to be warehousing children.” 

The health secretary said his team cannot ensure safety and high quality care within the state’s psychiatric facilities without proper staffing at the Division of Health Service Regulation, which investigates complaints. Earlier this spring, Kinsley said complaints have risen sharply while the division grapples with a 16 percent employee vacancy rate and 15 percent turnover rate due, in part, to low state salaries. 

Several white men standing at the end of a conference table in suits discussing mental health issues in North Carolina.
After a mental health roundtable discussion in the summer 2023 in Raleigh, DHHS Sec. Kody Kinsley discusses North Carolina’s mental health needs with U.S. Sen. Thom Tillis and Sen. Jim Burgin can be seen behind them. Credit: Taylor Knopf

Holly Stiles, assistant legal director for litigation at Disability Rights, said the Senate committee’s findings “did not come as a surprise.” She told NC Health News that one way to increase regulation of these psychiatric facilities would be to fully staff the state’s Division of Health Service Regulation. 

“Staffing shortages prevent DHSR from performing its most basic oversight functions,” Stiles said. “What that looks like in practice is the ability to respond to complaints more quickly, conduct more robust investigations, and to conduct more frequent routine monitoring visits.”

“Increased oversight could mean a variety of things, including: the ability to spend more time interviewing children about their experiences to uncover the types of abuses and rights violations we hear about when we monitor,” Stiles said. “Reviewing staffing files in more detail to see what sort of education and training staff possess to ensure they provide quality care for children, and verifying if staff have committed prior instances of physical violence that puts children at risk of harm; pursuing needed administrative rule changes to address harmful practices such as strip and cavity searches.”

Nonetheless, lawmakers in the state House of Representatives recently released a budget proposal that keeps staffing at the state regulatory agency flat, while it does include significant reimbursement increases for private psychiatric hospitals, including the three owned by Universal Health Services. 

The freestanding psychiatric hospitals across the state, “are in need, just as much as an acute care hospital,” state Rep. Donny Lambeth (R-Winston-Salem) said at a House Finance Committee meeting on June 18.

The state Senate budget proposal released several days later also keeps funding at the regulatory division the same. It does, however, contain no increased rate for hospitals.  

U.S. Sen. Wyden said that he would introduce legislation in the coming months to raise health and safety standards, require oversight and enforcement, and invest in community-based mental health services.

“In order to reduce our reliance on fraudulent facilities and to reduce the number of kids that end up in them, investing in high quality, community-based care must be a priority,” Wyden said. 

“If you provide more care and support the kids up front, you reduce the need for residential treatment and the number of kids being subjected to these horrific abuses,” he said. “What we found is that too often, kids in foster care are warehoused in these residential facilities for months or years with no plan to exit, and no legitimate reason for being there.”

On June 26, the U.S. Department of Health and Human Services Office of Inspector General released a report that found that many states, including North Carolina, lack proper monitoring and oversight of abuse of children in foster care in residential settings, including long-term psychiatric facilities. 

Disability Rights’ Stiles said she was glad to see the Senate committee’s report prioritize community-based mental health services. 

“There is an important underlying issue here, and that is that so many of the children are forced into these places where they are subject to abuse, neglect, and more trauma, because community-based services aren’t available to them and their families,” she said. “North Carolina over-relies on them instead of ensuring children can get what they need to stay in their homes.”

Mental health advocates in North Carolina and around the country have been calling for more community-based treatment options to help people in the least restrictive environment before their symptoms escalate into a crisis. To create more services in communities, advocates say a cascade of changes need to take place, from building up a mental health workforce to forcing insurers to abide by federal and state laws requiring them to pay for services on par with physical health services. 

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