US: Federal Watchdogs Find Abuse at For-Profit Youth Residential Programs in 18 States
Illustration by Eva Vázquez
Imprint - November 02, 2021
Publicity around celebrity Paris Hilton’s years of abuse at residential treatment facilities for troubled youth has attracted members of Congress and rallied advocates nationwide to battle the “troubled teen industry.” Now, a report by a congressionally mandated watchdog group reveals that the hotel heiress’ troubling childhood experiences in Utah are far from unique — and systemic abuse is widespread at for-profit treatment programs nationwide.
The “Desperation without Dignity” report released last month by the National Disability Rights Network calls on the federal government to better regulate the multibillion-dollar industry.
“It’s just an oxymoron that people can make a profit — a large profit — by claiming to provide good quality care to children with serious behavior and mental health issues,” Curtis Decker, the network’s executive director told The Imprint. “Of course, the answer is pretty simple: They don’t. They don’t provide quality care.”
The first comprehensive examination of its kind — relying on dozens of media exposés and reports from state-funded watchdog agencies — found abuse at youth residential “behavior modification” programs in 18 states. The authors describe “endemic” civil rights violations, ranging from sexual abuse to overmedication and forced isolation from family and support networks.
The report released Oct. 14 by the disability rights groups identifies three key areas of concern at for-profit youth behavioral health programs: physical, emotional and sexual abuse, overuse of psychotropic medication and failure to provide the mental health treatment they advertise and bill for. Decker said the profit-driven model of care leads to cutting corners on staff pay and training, the frequency and quality of treatment, and basic expenses such as building maintenance and even nutrition. The problems were particularly acute when private equity firms funded the treatment centers.
A 2020 investigation by The Imprint and The San Francisco Chronicle is cited in the Disability Rights Network report. “Far from Home, Far from Safe” revealed that California sent thousands of vulnerable children to out-of-state facilities privately run by the Alabama-based Sequel Youth & Family Services, where they suffered everything from broken bones to sexual assaults. Last spring, multiple employees pounced on 16-year-old foster youth Cornelius Frederick at Sequel’s Lakeside Academy in Michigan after he tossed a sandwich in the cafeteria. He was smothered by staff, and later died, rallying nationwide cries to end abuse in residential treatment facilities.
Shawn Coughlin, executive director of the National Association for Behavioral Healthcare, which represents for-profit providers including Sequel, said its members provide medically necessary treatment to a very difficult population.
“Occasionally there are problems,” Coughlin said. “But there are still hundreds of thousands of children who are being helped by this.”
Officials at Sequel Youth & Family Services did not respond to requests for comment on the Oct. 14 report. Last year Sequel officials defended their treatment programs, stating through a crisis management firm that the company had increased staff training and oversight and was working on “phasing out the practice of physically restraining children.” They cited “many, many successes at Sequel,” while pledging to work on “areas where we fall short.”
Years of Documented Harm
The new scrutiny of Sequel and similarly run companies comes from the National Disability Rights Network. Established in 1980, the network is tasked with monitoring the care of Americans with disabilities, including marshalling local agencies in every state to conduct unannounced inspections of residential facilities. That work involves oversight of behavioral health programs relied upon to house children in foster care and on probation. Children with disabilities can also be placed in these programs by special education officials or by their parents.
Decker said when enough of the state-level groups report similar problems, as in this latest report, his group weighs in to inform Congress.
“This is not just a couple of isolated incidents,” he said. “This is a systemic, serious problem across many, many states.”
The report relies on investigations from state disability rights groups and press reports that document in harrowing detail abuses reported at programs across the country. In numerous instances, staff have been arrested and facilities forced to shut down.
The Imprint’s December exposé revealed that staff routinely harmed children at Clarinda Academy in Iowa; Normative Services in Wyoming; Mingus Mountain Academy in Arizona, and in Michigan at Starr Albion Prep and Lakeside Academy.
The new report reveals similar patterns at other Sequel-run programs.
It states that in 2014, a staffer at Sequel’s Red Rock Canyon School in Utah was convicted of “forcible sexual abuse.” In 2017, an employee at a Sequel-run psychiatric facility pleaded guilty to having “sexual contact” with three male residents. And in 2018, a Sequel staffer employed at Northern Illinois Academy pleaded guilty to sexually abusing youth in his care.
Following a nine-month investigation, Disability Rights Ohio reported last year that children at Sequel Pomegranate in Columbus were being punched and put in chokeholds by staff, who also exhibited “disturbing levels” of bullying.
Each of the Sequel facilities named above — with the exception of Mingus Mountain — has now closed, although the company continues to run dozens of programs in 20 states.
Other residential treatment providers have similarly troubling track records. Staff at a Marshville, North Carolina facility run by Anderson Health Services used zip-ties to restrain a 14-year-old girl for more than an hour, the report states, and 10 staffers have been charged with child abuse since 2017.
Desert Hills in New Mexico, run by the for-profit Acadia, shut down in 2019 “due to systemic allegations of physical, sexual, and emotional abuse perpetrated against the youth by staff members.”
The report also highlights a class-action lawsuit against the nonprofit Devereux Advanced Behavioral Health filed in January in U.S. District Court in Philadelphia. The suit alleges that six children ranging in age from 8 through 17 were sexually abused at Deveraux campuses in California and Florida between 2003 and 2019.
Cornelius’ May 2020 killing at Lakeside prompted multiple organizations to mount advocacy campaigns calling for the closure of for-profit treatment centers long before Hilton’s story made national headlines last month.
National Juvenile Justice Network Executive Director K. Ricky Watson Jr. said the report provides critical insight into “the horror that young people endure” at for-profit residential facilities.
“We need to listen to young people when they tell us that these facilities only cause them harm,” Watson said. “We need to invest in care that keeps young people in their communities, surrounded by family and caregivers who can properly ensure they are being taken care of.”
FALSE CLAIMS OF CARE AND INSURANCE FRAUD
The financing of the facilities also came under withering attack in the October report, which described programs advertising and billing for therapeutic treatment they often failed to deliver.
In 2020, Universal Health Services, a for-profit that runs more than 300 in-patient behavioral health campuses for adults and youth — including Provo Canyon School where Hilton lived — paid a $117 million settlement following allegations in a federal case that the company was “falsely billing inpatient behavioral health services that were not reasonable or medically necessary.” Another provider paid a $4 million insurance fraud settlement in Massachusetts.
Paris Hilton spoke to this during a media event late last month promoting reforms set to be introduced before Congress, the Accountability for Congregate Care Act. In recent public addresses, Hilton, 40, said parents and funders are often misled by promotional material.
“These places lie,” Hilton said. “They have brochures and websites with smiling kids and kids riding horses. And all of these pictures, they’re not even taken at the facilities.They’re conning and scamming families.”
The disability rights group reported treatment centers described as cutting-edge to parents and state agencies in some cases left children in “vermin-infested buildings,” at times so poorly nourished they failed to grow and develop at a normal rate.
The report also highlighted discipline and behavior modification tactics described as emotionally and psychologically abusive, including prohibiting unmonitored communication with relatives, if they’re allowed to speak with them at all.
Some facilities also used group “shunning” practices, where residents are forbidden from speaking or making eye contact with their peers or staff, outside of therapy or other “billable services.” Youth at one Alabama facility reported monthslong spans of such punishment; one girl told investigators she attempted suicide as a result.
Disability rights investigators also found that for-profit programs frequently used psychotropic medications inappropriately to subdue residents and manage their challenging behaviors.
“There are instances in which medication is administered as a ‘chemical restraint’ to control behavior for staff convenience, rather than as intended to protect the health and safety of the child or others,” authors concluded.
FROM WALL STREET TO CAPITOL HILL
While problems like these aren’t limited to for-profit programs, private equity backers fuel a perverse incentive to prioritize profit over children’s well-being, Decker said.
“They cut corners,” Decker said. “Terrible facilities, underpaid and unprofessional staff relying on lots of chemical restraints rather than actual treatment.”
Since being purchased by Altamont Capital Partners in 2017, for example, Sequel has twice made moves that generated a collective $94 million for shareholders, by saddling the company with debt.
“Debts placed on Sequel facilities fund this shareholder dividend, and this creates an incentive for individual locations to cut overhead costs for staff and sacrifice services quality to avoid reneging on their debt,” the report states.
Meanwhile, the company relies on government funding to reap those massive earnings. Ninety percent of their $200 million annual revenue comes from Medicaid, Medicare, and additional federal, state, and local programs, according to the report.
Coughlin, with the National Association for Behavioral Healthcare, said private equity investments in the field help to meet needs that the government hasn’t been able to. The pandemic has caused a significant surge in youth in need of acute mental health care, he added, “and the beds just aren’t there.”
Meanwhile, “the private equity market has recognized that there is a real need in this area, and they are bringing resources in,” Couglin said.
The watchdog network calls on Congress to create more transparency and accountability of private youth residential programs, recommending federal legislation to require state licensing for all facilities receiving federal funding. They want stricter limits on when staff can restrain children or forcibly seclude them. Authors also say more Medicaid money should go toward funding community-based mental health services to reduce the need for residential care.
They urge states to immediately terminate contracts with any facility that has a history of abuse.
Watson said it’s “infuriating” that swift action hasn’t already been taken.
“It shouldn’t take a young person’s death,” Watson said, “to motivate the closure of a facility with a record of documented abuse and neglect.”
