Acadia Healthcare Company (ACHC) Stephens 26th Annual Investment Conference | NASH2024 summary

Market and policy environment

• Bipartisan support for mental health continues, with strong demand for services and favorable reimbursement trends expected to persist into 2025.

• Medicaid supplemental payment programs are seen as stable and likely to continue regardless of political shifts, with recent years showing increased inclusion of behavioral health facilities.

• Policy changes are not expected to materially impact behavioral health coverage, and industry funding momentum is bipartisan and state-driven.

Business performance and volume trends

• Same facility patient day growth was 4.7% in Q3 and over 5% in September, but moderated to around 3% in October due to local media coverage following a government investigation.

• The moderation in volume is considered transitory, with proactive outreach and communication efforts underway to stabilize referral relationships.

• Localized media impacts have affected both acute and specialty business lines, with referral volumes and consumer-driven admissions both seeing some pressure.

Referral sources and joint ventures

• Increased engagement with referral sources, including in-person meetings and educational luncheons, has led to improvements in referral patterns.

• Joint venture partners remain supportive, with new facilities opening soon and a robust pipeline of additional JV and De Novo projects.

• Existing JV partners serve as strong references, aiding in the development of new partnerships even amid heightened media scrutiny.