For-Profit Psychiatric Hospitals Face Scrutiny Over EMTALA Violations and Quality Concerns
The proportion of mental health inpatient beds operated by for-profit entities in the U.S. has increased significantly from about 13% in 2010 to over 40% in 2021. This shift is partly attributed to the Affordable Care Act (ACA), which mandated mental health as an essential health benefit, expanding access and requiring insurance plans to cover mental health services. Subsequent federal regulations also enhanced reimbursement for mental health care and removed coverage caps, attracting investor interest in this traditionally less profitable sector.
Research indicates that for-profit mental health facilities often exhibit lower quality of care, potentially due to cost-cutting measures such as reduced staffing. Investigations reveal that many psychiatric hospitals owned by for-profit corporations have violated the Emergency Medical Treatment and Labor Act (EMTALA), which mandates emergency care irrespective of insurance status or ability to pay.
From 2010 to mid-2025, over 90 psychiatric hospitals were cited for EMTALA violations, with approximately 80% owned by for-profit entities. Notably, two corporations — Universal Health Services (UHS) and Acadia Healthcare — account for about half of these cited hospitals. Despite these violations, regulatory enforcement has been minimal, with fines rarely commensurate with the companies' revenues and operational scale.
Specific cases, such as hospitals operated by UHS and Acadia, demonstrate repeated EMTALA breaches, including refusing patient transfers and failing to provide required medical screening. Inspections also uncovered instances where hospitals denied care due to the patient’s uninsured status or complex treatment needs, a practice influenced by financial incentives to maximize profitability.
Private equity ownership in psychiatric hospitals has grown, prompting concerns from lawmakers and regulators about quality and compliance risks. Private equity firms often restructure acquired facilities, focusing on operational cost reductions, which may adversely affect patient outcomes.
A highlighted example involves Perimeter Healthcare, a private equity-backed operator, with documented EMTALA violations at its Dallas behavioral hospital. Despite findings of inadequate patient care and screening failures, consequences from regulatory agencies have been limited, and corrective measures primarily involve procedural revisions and staff training.
Federal law restricts the maximum fines for EMTALA violations, often limiting regulatory deterrence. Former regulators assert that the current enforcement approach may embolden some facilities to prioritize profit over compliance, risking patient access to legally mandated emergency mental health services.
Lawmakers, including members of congressional committees overseeing health care, express concern over the findings and emphasize the need for stronger enforcement to ensure adequate mental health care access amid rising demand. The intersection of health policy, corporate ownership, regulatory oversight, and patient care quality remains a critical area for ongoing scrutiny in the mental health services sector.