SAN FRANCISCO, CA - Two letters and a U.S. District Court ruling surfaced last Thursday. A legal expert purports that a combination of the three items appears to formulate a newly minted, legally rational, and precedent-based opinion that Acadia Healthcare Company Inc. (ACHC) is liable for the disappearance of Elizabeth Breck. The 46-year-old mom, a high school teacher, vanished from Sierra Tucson, Acadia's flagship mental health treatment facility, on January 13, 2019, following a four-day stint.
Still, investors in Acadia have received no clear statements from leadership, despite four deaths at this one facility alone since 1/2/2014. Coincidentally, what CNN called a "scathing" federal court ruling against her insurer and two "letters of authorization" from the same insurer (United Behavioral Health, or, 'UBH') - both reveal clues about her ability to pay. However, the ruling issued by Judge Joseph Spiro in the Northern District of California (San Francisco) is a game changer. This ruling further defines the term(s) "acuity," "acute care," and "acute" in regards to behavioral healthcare. An expert says that this ruling potentially pins liability on Acadia Healthcare.
U.S. Chief Magistrate Judge Joseph C. Spero (Pictured below. Source: U.S. District Court) found that United Behavioral Health, the insurer's unit that administers treatments for mental illness and addiction in private health plans, had violated its fiduciary duty under federal law.
In his 106-page decision, Judge Spero described the company's guidelines as "unreasonable and an abuse of discretion" and having been "infected" by financial incentives meant to restrict access to care.
'They Should Have Known Where She Was'
Actual copies of Elizabeth Breck's "authorization of benefits" letters from United HealthCare were independently provided by a confidential source two days after the ruling (the court filing is in this link). The authorization letter images are below.
While the status of her out-of-pocket maximum or deductible is unclear, it's unlikely she would have been able to stay at Sierra without outside help. However, factoring in the ruling, it's a different story altogether. The out-of-pocket factor is simply irrelevant. While no inpatient benefits existed, the previous reports of Elizabeth, for instance, sleeping near the nurse's station on night two leave the "change in care level" in question. This brings into question the nature of acuity of her mental illness, which is something further defined in the ruling.
The critical finding came from a confidential source and legal expert familiar with the arguments, claims, and last Wednesday's outcome of Alexander et al. v. United Behavioral Health. After reviewing the two authorization letters, the source's response was self-explanatory, stating:
One thing jumped out at me. UBH issued approval for coverage for Elizabeth from 1/10-1/13. It then issued a second approval for 1/14-1/16. This confirms that Elizabeth was at the facility when she went missing and that the facility intended for her to be there afterwards. So the facility must know something, or at least it is responsible for keeping track of its residents.
Another important point: the entire premise of the lawsuit against UBH was that (United) was improperly limiting residential treatment coverage for people in an acute condition, as opposed to treating the underlying chronic condition. While the plaintiff won the argument that limiting coverage to an acute condition is too restrictive (and contrary to generally accepted standards of care), the fact that UBH approved her for admission from 1/14-1/16 suggests that the facility was characterizing her as being in some type of acute condition. That highlights why they should have known where she was. Perhaps that additional information could prompt the police to push for more information.
Federal law requires insurers to cover mental health conditions. Federal law also provides various fundamental rights and privacy laws for patients with mental illness that are in care. In contravention of these provisions, insurers only quit complying once they recognized they were being fleeced...
The little-known part of the 2008 bailout (the Mental Health Parity And Addiction Equity Act (MHPAEA) was followed by lax regulation and low barriers-to-entry, triggering a fleecing of insurers, taxpayers, and even the British NHS. Regarding the behavioral health industry, Florida State Attorney for Palm Beach County, Dave Aronberg, told NBC News:
The legitimate players, the good guys, are far outweighed by the corrupt...
...This is not a case where a few bad apples spoil the whole bunch. This is a case where most of the apples are spoiled."
Additionally, the very law that required insurers to pay for these disorders is also believed to be triggering asset inflation concerns in the field. I must disclose that I opined various issues, including those in a report to the UK's parliament delivered on February 5, 2019. Regardless of its flaws, the ruling does bring clarity to many ambiguous and ill-enforced provisions. Not only does it define clinical terms, but it also increases pressure for payors to compensate accordingly, despite the economics.
The Acuity Level
Elizabeth's brother, Christopher Breck, in the third interview on March 7, 2019, told me that Sierra Tucson's leadership gave the following account of the activities of January 13, 2019:
They did not outline any groups or meetings at all similar to your other source. They took her down to the group and set her on her own, essentially. From there, the only other item they stressed (especially during our first meeting) was that there was a transgender person in that unit that was still technically a man, but identified as a woman. They stated that Elizabeth had expressed concern to another patient that she was concerned, and the FBI or CIA should be contacted. Her paranoia was that an individual might try to infiltrate ST and cause her harm, so seeing a man dressed as a woman, I'm sure, didn't sit well with her heightened level of mental instability. The only other timeline info they had was that she missed a 2 pm check and was found on the grounds and notified of hourly checks. When she was again not at the 3 pm check, they looked for her again, this time without finding her. This led to a search with no outcomes and (subsequently) contacting the authorities (Pinal County Sherriff).
The Money Trail And The Placebo Affect
A source and friend of Elizabeth Breck, a self-reported trauma survivor, further disclosed that the balance of her JPMorgan Chase Bank account was overdrawn by more than $300.00 as of last Friday. Aside from "auto-pay" transactions, including monthly $208 payday loan payments, she hasn't used the account. The information revealed that she also made regular cash deposits; the source of that cash is unknown.
Bank records provided from before her disappearance revealed regular payments to Christopher Breck for rent. The negative account balance remains in that status, despite the GoFundMe Page started by Christopher Breck that is purportedly paying Elizabeth's bills and for private investigator services.
We previously reported that when Breck disappeared, she left her car, personal effects, and wallet behind, but her cash and drivers license remains missing.
Last week, Dr. Gayle Masterson, Breck's psychiatrist, stated she believed the tracking bracelets at Sierra Tucson don't track at all, suggesting a 'placebo effect.' This claim has yet to be substantiated or disproven. We previously reported that Christopher Breck questioned the integrity of these devices. An Oklahoma lawsuit claims Acadia has ordered the destruction of patient-tracking devices in the past.
Also, according to Christopher Breck, Sierra Tucson/Acadia leadership met with the Breck family following their notification of the disappearance. The individuals allegedly present were Sierra Tucson CEO Jamie Vinck, Corporate Security Officer Pamela Robertson, Chief Medical Officer Aaron Wilson, and Chief Operations Officer Valerie Kading. Breck never directly notified her parents or brother, nor did she sign a release of information for the family. Only Dr. Gayle Masterson received that release.
Communication is alleged to have occurred twice between her admission on the evening of January 10, 2019, and her disappearance about 65 hours later. Those communications were:
1. A call to one of her two daughters.
2. An email to a friend of her mother, Linda Breck (who was in Germany with her husband).
Despite the clear petition to the insurer, Acadia purported to the Breck family that they didn't see her as a threat to herself or others, so they released her from the inpatient unit, 'Desert Flower Hospital' (patients call this "the tank"), to the female residential unit for entry into the "trauma program". These are two separate levels of care. Elizabeth's state didn't seem to warrant an early release from the tank. Her insurance carrier didn't authorize the inpatient stay. Despite appearing unable to pay out-of-pocket costs, she was admitted, and Acadia took responsibility for Miss Breck.
Sierra Tucson purportedly contacted the authorities to perform a search that turned up nothing. Her case has since been labeled a level-C investigation by Arizona DHS.
'Before Anyone Else is Killed'
It also is challenging to say the disappearance wasn't an unforeseen instance. On July 18, 2018, an employee mentioned the following in a Glassdoor employment review entitled "Short staffed to the point that patients are put in danger" (a screenshot is below along with the written contents).
Glassdoor.com employment review of Sierra Tucson. Source: Glassdoor.
I have been working at Acadia Healthcare full-time (More than a year).
Pros: Beautiful vistas. *Some* good colleagues.
Cons: Too few staff members to treat patients appropriately. As a result, Sierra Tucson has been charged with several wrongful deaths. Working here will land you with people's deaths on your conscience. The company rampantly and openly commits insurance fraud. Staff is asked to gaslight patients who complain and rely on their illnesses to disregard their complaints.
Advice to Management: SHUT THIS PLACE DOWN BEFORE ANYONE ELSE IS KILLED.
To the knowledge of the family, friends, the psychiatrist, as well as local authorities, federal law enforcement officials have yet to look into this complex and terrifying web of information. Sierra Tucson is just one of many similar companies under Acadia's umbrella settled in boiling water. Last week, The Chicago Tribune disclosed more disappearances, amidst echoing our previous reports of two recent sexual assault allegations against a former therapist and the suicide of a young woman. These incidents are alleged to have occurred in 2018 at Timberline Knolls (a female-only facility) in Lemont, IL. The article declared that Reeve Waud's publicist stated Waud took over the chairman's role to right this (corporate) ship.
As for United HealthCare, while they may have limited authorizations, they did not admit the patient; and in the timeframe Elizabeth was a patient, she did have utility from insurers. Moreover, United has no control over the facility in this case. The trend of reduced reimbursement has plagued the industry since 2015. The argument of discrimination has been pitted against the pundits who emphasize there is no proven, cost-effective solution available.
Again, Sierra Tucson has seen four patients die since January 2, 2014. Elizabeth Breck's psychiatrist noted two weeks ago that she firmly believed Elizabeth "never left the property."
It's still unclear how the categorization of the disappearance and alleged liability of Acadia will affect similarly alleged incidents at many other Acadia Healthcare facilities. Families yet entrust them with their loved ones.
Chairman Reeve Waud and CEO Debra Osteen have yet to make one public statement discussing this or any other abuse allegation. And Sierra Tucson's admissions call center is still taking calls.
For Acadia investors (long, short, or proverbial vultures seeking distressed debt), this entire issue emphasizes that a healthy company providing a quality product would be able to track patients. This ruling, while a great statement, isn't going to stop the declining revenues. For UnitedHealth Group investors, Elizabeth Breck's daughters, and those speaking out against patient abuse, this is a win. If the argument is that the providers cannot be trusted and must be kept on a short leash, then UnitedHealth is winning that argument.
At the end of the day, the insurance industry is the only industry incentivized to find a proven, cost-effective solution to avoid these situations.
I reached out to Blake Masters, head of admissions. I also reached out to Pamela Robertson, Jamie Vinck, Aaron Wilson, and Sue Menzie. I am still awaiting comment. I have contacted United HealthCare and am awaiting comment as well; if I hear back, I will update with their comments.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.