Acadia Healthcare Company, Inc. (NASDAQ: ACHC) Securities Fraud Class Action

LEAD PLAINTIFF DEADLINE IS DECEMBER 16, 2024.

If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.

Case Background:
The Class Period begins on February 28, 2020 when Acadia Healthcare filed with the SEC its Annual Report on Form 10-K for the year ended December 31, 2019.  According to the complaints, this filing and other filings made by Defendants throughout the Class Period were materially false and misleading because the company routinely held patients against their will at times when it was not medical necessary, lied to insurers about the medical necessity of keeping those patients in the company’s facilities against their will, and willfully neglected patients. The foregoing resulted in a heightened risk of regulatory investigations and negative publicity against the company.

On September 1, 2024, The New York Times published an article entitled “How a Leading Chain of Psychiatric Hospitals Traps Patients.” The article revealed that Acadia Healthcare, one of America’s largest psychiatric hospital chains, has seen a surge in revenue since the pandemic intensified the national mental health crisis, but that The New York Times investigation “found that some of that success was built on a disturbing practice: Acadia has lured patients into its facilities and held them against their will, even when detaining them was not medically necessary. In at least 12 of the 19 states where Acadia operates psychiatric hospitals, dozens of patients, employees and police officers have alerted the authorities that the company was detaining people in ways that violated the law” and that in some cases, judges had to step in to compel Acadia Healthcare to release patients.  On this news, the price of Acadia Healthcare stock fell by 4.5%, to close at $78.21 per share on September 3, 2024. 

Then, on September 27, 2024, Acadia Healthcare revealed that “[o]n September 24, 2024, Acadia Healthcare . . . received a voluntary request for information from the United States Attorney’s Office for the Southern District of New York as well as a grand jury subpoena from the United States District Court for the Western District of Missouri (W.D.Mo.) related to its admissions, length of stay and billing practices,” further disclosing that “Acadia anticipates receiving similar document requests from the U.S. Securities and Exchange Commission and may receive additional document requests from other government agencies.” On this news, the price of Acadia Healthcare stock fell more than 16%, to close at $63.28 per share on September 27, 2024. 

On October 18, 2024, The New York Times published an article entitled “Veterans Dept. Investigating Acadia Healthcare for Insurance Fraud.” Specifically, the article indicated that “The Veterans Affairs Department is investigating whether Acadia Healthcare, one of the country’s largest chains of psychiatric hospitals, is defrauding government health insurance programs by holding patients longer than is medically necessary, according to three people with knowledge of the inquiry.”  On this news, the price of Acadia Healthcare stock fell by $7.29 per share, or 12.28%, to close at $52.03 on October 18, 2024.

Finally, on October 30, 2024, Acadia Healthcare issued a press release announcing its financial results for the third quarter of 2024. In the release, Acadia Healthcare disclosed that it had lowered its full-year 2024 revenue outlook to a range of $3.15 to $3.165 billion and its full-year 2024 adjusted EBITDA to a range of $725 to $735 million. During the related earnings call held the next day on October 31, 2024, Acadia Healthcare’s CFO disclosed that the lowered full-year 2024 guidance was in part due to slower same-store patient day growth of only 3% in the month of October, “which we believe is a result of the recent headlines and reporting in the media.” On this news, the price of Acadia stock fell $9.39 per share, or more than 18%, from a closing price of $52.08 per share on October 30, 2024, to a closing price of $42.69 per share on October 31, 2024.

The complaints allege that, throughout the Class Period, Defendants made materially false and misleading statements and failed to disclose material adverse facts about the company’s business, operations, and prospects, including that: (1) Acadia Healthcare admitted patients and held them against their will and beyond the length of time that was medically necessary in order to deceive payors into continuing to pay for such patients’ care; (2) Acadia Healthcare would not release patients until their insurance ran out; (3) in order to achieve the above, Acadia Healthcare deployed company assessors to pressure emergency rooms to send patients to company facilities, filed frivolous petitions with courts to delay patients’ release, and directed employees to use buzzwords and avoid using other words in patients’ charts to create a false impression of patients’ mental state; (4) Acadia Healthcare’s admissions, length of stay, and billing practices would subject the company to government investigations and actions and heightened media scrutiny; (5) in light of such government investigations and actions and media scrutiny, Acadia Healthcare’s relationships with its referral sources would be negatively impacted; (6) as a result of the above, Acadia Healthcare experienced slower same-store patient volumes, and in turn, the company would be forced to lower its full-year 2024 outlook; and (7) as a result of the above, Defendants’ positive statements about the company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.

What is a Lead Plaintiff?

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.