After years of facing criticism for wrongdoing and mistreatment of patients, the at-risk youth industry was blasted in a report released on Wednesday by the U.S. Senate Finance Committee.

The report and communications from the committee chairman, Sen. Ron Wyden (D-Ore.), conclude that systemic harm and abuse are “routine” parts of the at-risk youth industry. It delves into specific incidents at facilities owned and/or operated by some of the industry’s most prominent players: Universal Health Services (NYSE: UHS), Acadia Healthcare Co. Inc. (Nasdaq: ACHC), Devereux Advanced Behavioral Health and Vivant Behavioral Healthcare.

“The harms, abuses, and indignities children in [residential treatment facilities] have experienced and continue to experience today occur inevitably and by design: they are the direct causal result of a business model that has incentive to treat children as payouts and provide less than adequate safety and behavioral health treatment in order to maximize operating and profit margin,” the report states.

The presentation of the report also enlisted the support of socialite and media personality Paris Hilton, a staunch critic and self-described survivor of the at-risk youth industry. The Senate Finance Committee also hosted a hearing on Wednesday to discuss the report’s findings.

Hilton, Wyden, the report itself and several others call on Congress to act.

“Providers will continue to operate this model because it’s good business, unless there is some bold intervention,” the report states.

Wyden’s Republican counterpart, Senate Finance Committee Ranking Member Mike Crapo, also called for reforms. In a statement, Crapo said that the report’s findings were “deeply disturbing” and that “chronic patterns of failure must not go unnoticed or unaddressed.” 

The report finds that understaffing, restraints (both physical and chemical), poor care and a general lack of oversight within and of residential treatment facilities were typical for the industry.

The action contemplated by the report and the Senate Finance Committee centers on elevated scrutiny of the industry and the role of government payers supporting these operations. The report and proceedings focus on what they call residential treatment facilities, which focus on providing care to children on a long-term basis.

The Senate Finance Committee report’s recommendations are summarized into three points: ensuring safe and dignified treatment in home-like settings, government prioritization of community-based services and more effective oversight of standards of and funding for facilities. These three specific recommendations should be taken up by Congress, the report states.

It calls on state governments to use existing authority to favor community-based services, calling many states’ historic reliance on residential treatment facilities inappropriate, and to “ramp up their oversight capabilities for youth in both in-state and out-of-state facilities.”

The report also calls on the U.S. Department of Justice to enforce Title II of the Americans with Disabilities Act to ensure that violations of so-called “Olmstead” standards are addressed within the at-risk youth industry. These provisions require that people be treated for severe conditions in the least restrictive setting possible.

“After reading it (the report), I honestly have never felt so seen and heard: it validates everything that I’ve been fighting for over the past four years,” Hilton said in a video statement released Wednesday morning. “As a survivor, please do something. I am begging you to protect your constituents before it’s too late.”

The committee meeting featured subject matter experts who testified before the Senate Finance Committee. Wyden said during his prepared remarks that Marc Miller, the CEO of UHS, was invited to participate in the meeting and that UHS was invited to engage with the committee’s investigators. UHS and Miller declined to do so; Miller was listed as a witness in notices for the meeting but did not attend.

On top of the recent public pillorying, Acadia Healthcare and UHS have seen substantial financial ramifications for abuses recognized by the courts at their facilities.

In July 2023, a jury ruled against Acadia Healthcare in a civil lawsuit involving sexual abuse of a minor at a now-defunct facility that totaled $405 million. In October 2023, Acadia agreed to pay $400 million to settle three cases related to abuse at the facility.

In April, a court ruled against UHS to the tune of $535 million over an incident involving a child sexually abusing another child at a facility in Champaign, Illinois.

The report adds what some call “headline risk” to a modality of care that is replacing wilderness therapy. For example, Chandler, Arizona-based Embark Behavioral Health, a sizable care provider in the at-risk youth segment, is abandoning wilderness therapy altogether in hopes of transitioning these businesses into residential treatment facilities and investing more in outpatient offerings.