Oregon Sen. Ron Wyden is calling on the U.S. Justice Department to investigate whether Medicaid fraud has been committed by private, taxpayer-supported residential facilities housing vulnerable youth in abusive conditions — and whether states that sent the children have violated their civil rights.
In a pair of Oct. 9 letters sent to Attorney General Merrick Garland, Wyden highlighted the results of his two-year investigation into four multi-state companies that operate centers funded to provide treatment. Senate investigators instead found “sexual, physical, and emotional abuse,” conditions that were “unsafe and unsanitary,” and substandard education and behavioral health care.
“Vulnerable children are being used as pawns to maximize the profits of these facilities — and American taxpayers are footing the bill,” Wyden said in a Wednesday press release. “More often than not, these kids aren’t even getting the basic care they need, and instead are in many cases experiencing serious neglect and abuse.”
Specifically, Wyden requested that federal justice officials investigate whether the facilities’ operations constitute Medicaid fraud, because they are billing the government for “substandard and inadequate care” that he described as “worthless services.” The Oregon senator also wants an inquiry into whether states are violating the Americans with Disabilities Act and other federal protections because they shuffle kids in crisis into centers that are “segregated” from their communities.
“With the health and safety of kids involved — and pages of evidence — it’s time for the DOJ to get involved,” said Wyden, who chairs the Senate Committee on Finance.
In his letters to Justice officials, Wyden stated that in addition to harming children, the facilities may be misusing “hundreds of millions of dollars” in taxpayer funding each year.
Representatives of Acadia Healthcare and United Healthcare Services, two of the four private companies named in Wyden’s investigation, said in emailed statements today that their companies strongly disagree with the conclusions drawn.
“Our facilities are licensed, accredited and in good standing, and are regularly inspected — unannounced — to evaluate our compliance and ensure we provide high quality, effective care for our patients,” a spokesperson for Acadia said.
A United Healthcare Service statement acknowledged that there have been “isolated incidents” in which their care of children fell short of their standard, but argued that those are exceptions.
“Such incidents belie the commitment of these facilities to provide a safe and therapeutic environment as well as the policies, procedures, protocols and training for the facilities,” the spokesperson said.
Officials with the Justice Department and the other two companies Wyden’s staff investigated — Devereux Advanced Behavioral Health and Vivant Behavioral Healthcare — did not respond to requests for comment by press time.
“With the health and safety of kids involved — and pages of evidence — it’s time for the DOJ to get involved.”
— SEN.RON WYDEN
In June, Wyden’s Senate committee released its staff report: Warehouses of Neglect: How Taxpayers Are Funding Systemic Abuse in Youth Residential Treatment Facilities. The investigation involved a review of more than 25,000 pages of documents, expert interviews and site visits. It found “a terrible pattern of mistreatment,” including filthy living quarters and children sleeping on bare mattresses with their belongings in paper bags. Some were so heavily medicated they could barely hold a conversation with interviewers.
The probe also found youth had been subjected to “physical, sexual, and emotional abuse at the hands of staff and peers, improperly executed and overused restraint and seclusion, inadequate treatment and supervision, and non-homelike environment.” The young people living in these facilities are sent by state foster care and juvenile justice agencies as well as their local school districts. Some fee-paying parents send children when they are struggling to meet their needs at home.
Specific concerns of Medicaid fraud identified in the letter sent to Justice officials include failures to develop individualized treatment plans, a flouting of Medicaid’s restrictions on when restraints and seclusion can be used, and housing minors in dangerous conditions.
Regarding civil rights concerns, Wyden states that the Americans with Disabilities Act, the Rehabilitation Act of 1973 and the Supreme Court case Olmstead v. LC all protect people with disabilities, and their right to live in the community and receive services in the least-restrictive environment. The senator wrote that in 2022, 34,000 foster youth were sent to residential treatment centers nationwide, often simply due to a “child welfare agency’s inability to identify capacity in the community, rather than the behavioral health needs of the child.”
Last month, Wyden called on Medicaid and the Administration for Children and Families to work together to put in place better community-based services and to divert children from residential treatment centers. He has also pledged to introduce related legislation.
Meg Applegate, CEO of Unsilenced, an advocacy group for former residents of youth residential treatment facilities, criticized the industry for putting profits ahead of the health and safety of children, and called a DOJ investigation into these issues “long overdue.”
“The fact that these programs have been allowed to operate for as long as they have without proper regulation, accountability, or evidence-backed outcomes is astonishing,” she said in a statement emailed to The Imprint. “An investigation could finally give survivors the validation they’ve been denied for so long. After being told the abuse wasn’t real or that they were the problem, this would be their moment of truth.”
The conclusions reached by the Senate report are not novel; they echo years of revelations made by media exposés, watchdog organizations and youth with firsthand experience in these facilities.
“An investigation could finally give survivors the validation they’ve been denied for so long. After being told the abuse wasn’t real or that they were the problem, this would be their moment of truth.”
— Meg Applegate, Unsilenced
A report released earlier this month by the Juvenile Law Center provided firsthand accounts from young people, many of which mirrored what the Senate report found. The foster youth described experiencing and witnessing abuse, excessive and dangerous use of physical restraints, and lacking mental health services.
“I felt like a prisoner there, and I didn’t feel safe there,” one contributor said.
Wyden said he launched the two-year investigation in 2022 following years of in-depth media investigations that highlighted the harm children face in these facilities.
Among that reporting was a 2020 Imprint and San Francisco Chronicle investigation, Far from Home, Far From Safe, that revealed widespread abuse at treatment centers operated by the for-profit Sequel Youth and Family Services. Following publication of the exposé and other media coverage of its poor care for children, Sequel closed down most of its facilities.
Jay Ripley, Sequel’s founder and former CEO, pivoted from that company to launch Vivant Behavioral Healthcare — one of the companies criticized for concerning treatment in the June Senate report. Earlier in his career, The Imprint reported, Ripley had described tapping into the government funding for youth residential treatments as being akin to “drinking from a firehose.”
Applegate, with Unsilenced, hopes the federal scrutiny of these companies clamps shut that pipeline.
“It’s time to stop funding these facilities that warehouse vulnerable kids and leave them even more traumatized,” she said. “Instead, we should be investing in real, community-based care that actually helps kids heal.”