Dive Brief:
- Acadia Healthcare is reinstating its former chief executive as the behavioral healthcare provider manages a declining stock price and heightened litigation costs.
- Debra Osteen, Acadia’s CEO from December 2018 through March 2022, will take up the reins again effective immediately, the company said Wednesday. Chris Hunter, who began his tenure as chief executive in April 2022, is leaving the company and its board of directors.
- Acadia has faced multiple legal challenges in recent years, including investigations by the Department of Justice and the Securities and Exchange Commission. The behavioral care provider’s stock has declined 68% over the past year.
Dive Insight:
Acadia, which operates a network of nearly 280 behavioral healthcare facilities across 40 states and Puerto Rico, has weathered a raft of litigation — as well as accusations of abuse or neglect at some of its facilities — over the past few years.
In 2024, the company settled with the DOJ for $19.9 million over allegations the provider violated the False Claims Act and other state laws for billing for medically unnecessary inpatient care.
That same year, Acadia agreed to pay a $1.4 million civil penalty over claims it used employment, separation or other agreements to prevent whistleblowers from reporting misconduct to the SEC.
The behavioral healthcare provider also settled another lawsuit in November for $179 million, after investors argued Acadia had misled them about the company’s finances, quality of care and staffing levels.
The litigation has led to financial troubles. In December, Acadia lowered its adjusted earnings guidance for 2025 due to heightened professional and general liability costs, linked largely to patient-related litigation, according to the provider.
The company had also lowered its revenue and adjusted earnings guidance in November after reporting third-quarter earnings. Acadia posted a net income of $36.2 million, cut nearly in half compared with the $68.1 million in the prior year period.
Now, Acadia is switching up its top executive role. Osteen, who served as president of for-profit hospital operator Universal Health Services’ behavioral health division before joining Acadia in 2018, will rejoin the company as the board searches for a long-term successor. UHS has also faced a lawsuit after an assault at one of its psychiatric facilities.
“As Acadia continues to take decisive steps to optimize its growth investments and existing portfolio amidst ongoing macro headwinds facing many healthcare providers, the Board believes now is the right time to transition leadership,” Reeve Waud, chairman of Acadia’s board of directors, said in a statement. “Debbie is a mission-driven executive with a commitment to patients who helped transform Acadia into the leading provider of behavioral healthcare in the U.S.”
Acadia has seen other leadership changes in recent months. In October, the provider named Todd Young as chief financial officer after the company’s previous finance chief left in the summer. Additionally, Acadia’s chief operating officer, Dr. Nasser Khan, resigned in early November.
