This summer, Acadia applied to purchase the three facilities from Signature Healthcare Services, owners of Aurora Chicago Lakeshore Hospital. Filings with the Illinois Health Facility and Services Review Board, or HFS, said the expected purchase price was $51 million. Acadia did not disclose details of the deal in its statement.
The Montrose Hospital for Behavioral Health plans to open a 60-bed children’s hospital and outpatient facility in the summer of 2022. The 101-bed adult hospital, which will include geriatric services, is expected to open in early 2023, the statement said.
Acadia said it is the largest independent provider of behavioral health services in the state, operating 230 behavioral health care facilities with about 10,200 beds in 40 states and Puerto Rico, including the Timberline Knolls Rehabilitation Center in Lemont. It operates inpatient psychiatric facilities, residential treatment centers, group homes, substance abuse facilities, and outpatient behavioral health care facilities.
“We are thrilled to have the opportunity to enter the greater Chicago area and meet the urgent need for behavioral health services for adults and children in this important market,” said Debbie Austin, CEO of Acadia Healthcare. This transaction is in line with our strategy to identify unsecured markets for new facilities and opportunities that meet the criteria for our disciplined framework for capital allocation. We intend to make significant investments across the three sites to ensure that Montrose Hospital for Behavioral Health meets our industry-leading standards for exceptional patient care.”
Aurora Chicago Lakeshore Hospital closed in April 2020 after accusations of child abuse, neglect and assault there. A 2018 investigation by ProPublica Illinois found that the Illinois Department of Children and Family Services investigated 16 allegations of abuse and neglect at the facility, “including allegations of rape and sexual abuse of children by staff and other patients, physical abuse and insufficient supervision.” .”
In December 2019, the American Centers for Medicare and Medicaid Services terminated the hospital’s participation in the Medicare program. And in late January 2020, the Illinois Department of Public Health initiated a revocation of license action against Aurora Chicago Lakeshore Hospital. The hospital suspended services on April 17, 2020 and has since been closed.
The reopened Uptown facilities will primarily serve Medicaid recipients. HFS’ application documents stated that the expected payee mix from Montrose Behavioral would be 65% Medicaid, 20% Medicare and 15% Commercial Insurance. Applicants were also told that HFS services would include acute mental health care and that they might seek a contract with the Illinois Department of Children and Family Services.
HFS said in the application that Acadia agreed that for two years after the closing of the transaction, it would not adopt a charitable care (financial assistance) policy more restrictive than the one that was in place one year prior to the closing date of the transaction.