Acadia Healthcare has agreed to pay approximately $19.85 million to settle allegations that it violated the federal False Claims Act and related state statutes — with the stock of the Franklin-based company losing roughly 27 percent of value on the heels of the news.

In early morning trading, Acadia shares (ticker: ACHC) were priced at $55.66, down $20 per share.

According to a release from the U.S. Department of Justice, Acadia — which provides mental health treatment services — was charged with knowingly having billed either for medically unnecessary inpatient behavioral health services or for services that did not meet federal and state regulations.

Under the settlement agreement, Acadia will pay about $16.66 million to the United States related to allegedly false Medicare, Medicaid and TRICARE (a federal health care program for active duty military service members billings). The Medicaid program is jointly funded by the states and the federal government and, as such, Acadia will pay an additional $3.18 million to resolve the claims from Florida, Georgia, Michigan and Nevada.

The DOJ contended that, between 2014 and 2017, Acadia knowingly submitted false claims for payment to Medicare, Medicaid and TRICARE for inpatient behavioral health services that were not reasonable or medically necessary. In particular, the department contended that Acadia admitted beneficiaries who were not eligible for inpatient treatment and failed to properly discharge beneficiaries when they no longer needed inpatient treatment and had improper and excessive lengths of stay.

In a release, Acadia Chief Executive Officer Chris Hunter said the company takes seriously its compliance responsibilities.

“We’re committed to taking action on incidents that fall short of our rigorous standards and are making investments necessary to establish Acadia as the leading behavioral healthcare provider for high-acuity and complex needs patients.”

The DOJ issued the following statement:

“This settlement demonstrates the Justice Department’s commitment to ensuring that federal healthcare programs pay only for services that are needed and properly provided. It is particularly important that health care providers satisfy these requirements when providing services to a vulnerable patient population, such as residents of an inpatient behavioral health facility.”

This article was first published by our sister publication the Nashville Post.