Affordable Care Act Helps Spur Mental Health Facility's Growth

Nov. 01--Valley Behavioral Health System in Fort Smith will see a $5.1 million, 22,000-square-foot expansion over the next five months and add 25 jobs.

The facility, which was bought by Franklin, Tenn.-based Acadia Healthcare two years ago, currently has 75 beds and will have 114 when the expansion is complete. The facility began operation in the 1980s as an operation of the Sisters of Mercy and is the only mental health center in the state with private rooms.

Beverly Wilborn, director of business development at Valley Behavioral Health System, said the center's increase in demand is partially brought upon by the Affordable Care Act.

"The health-care law made it where people who needed mental heath care could now seek treatment," Wilborn said. "Since the law was instigated, we've seen a 7 percent increase, but even before that we had trouble meeting the need of the community."

Treatment is offered to all ages suffering from depression, suicidal thoughts, anxiety, trauma, and co-occurring substance use disorders.

The Affordable Care Act made mental and behavioral health treatment one of 10 essential benefits required in new insurance policies sold on the federal health exchange, as well as to patients on Medicaid. According to MentalHealth.gov, mental health and substance use disorder services must be included. These must meet health and substance use parity set in the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008.

Coverage for mental health and substance abuse services generally cannot be more restrictive than those for medical and surgical services, literature at MentalHealth.gov added.

Stock analysts point to the Affordable Care Act as having helped Acadia, which recently posted a 76.8 percent increase in net income in the third quarter and announced it has entered into a deal to acquire CRC Health Group of Cupertino, Calif. Acadia will pay $1.2 billion for CRC in a stock transaction expected to close in the first quarter, according to an article at ModernHealthcare.com.

In an early October Zacks Equity Research report, Acadia was highlighted as one of the best stocks on the market. In July it was ranked a No. 1 after significant bumps in earnings estimates. The 2014 earnings per share projections moved up to $1.44 from $1.30, representing 34 percent annual growth.

"Clearly this is an area in our society that is seeing more patients and need for quality care, not less," the Zacks report stated of Acadia Healthcare. "And the tailwinds of the Affordable Care Act (ACA) are supporting growth in this company's programs."

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