Oregon Memorandum Details Abuse in Commercial Foster Care Facilities

By Patrick Howley
Patrick Howley
Patrick Howley
Patrick Howley is a former freelance contributor.
October 21, 2019Updated: October 23, 2019

A memorandum submitted to Oregon Senate Committee on Human Services Chairwoman Sara Gelser this year warned that the state’s Department of Human Services (DHS) is putting foster children at risk by sending them to out-of-state residential treatment facilities operated by companies with a history of overseeing alleged physical and sexual abuse, including the alleged cover-up of assaults.

The memo, which was leaked to The Epoch Times, is titled “Risks of harm to Oregon children in out-of-state placements” and was prepared at Gelser’s request by Ronald H. Davidson, who served for 20 years as director of the Mental Health Policy Program at the psychiatry department at the University of Illinois–Chicago.

Davidson cited problems with all three corporations operating residential treatment centers that are employed by Oregon DHS, which is facing public scrutiny for its child removal policies.

Oregon’s child welfare director Marilyn Jones resigned in June, following Oregon Gov. Kate Brown’s April executive order giving herself oversight powers relating to the agency, which she deemed to officially be in “crisis.”

Ten plaintiffs, represented by the organization A Better Childhood, filed a class-action lawsuit in April against the state, alleging that children were drugged and physically restrained or forced to bounce between unstable homes after being taken into Child Protective Services (CPS) custody.

Advocates say that children are routinely institutionalized or shipped out of state to dangerous foster care situations. Davidson’s report, submitted prior to Jones’s resignation, makes it clear that children nationwide are at risk.

“While the list of recent and/or current out-of-state RTCs [Residential Treatment Centers] utilized by the Department of Human Services includes 86 DHS clients distributed across 21 facilities and 13 states, the ownership of these facilities includes only three corporations, each with performance histories that ought to be of concern to Oregon officials,” Davidson wrote, identifying three problematic companies: “Acadia Healthcare (10 clients),” “Universal Health Services (2 clients),” and “Sequel Youth and Family Services (74 clients).”

“As shown in previous reviews conducted by federal and state healthcare investigators or law enforcement agencies, as well as in accounts by news media organizations, each of these national corporations have presented an array of troubling performance histories – often involving substandard quality of care, physical and sexual abuse, and ineffective or worthless treatment services. Moreover, in several well-documented cases, including reviews that were conducted on behalf of DCFS and the ACLU by my UIC program, investigators also found evidence of a pattern of unlawful activities or healthcare fraud,” Davidson wrote.

The concerns raised by Davidson about the three companies aren’t parochial; they are national or international organizations. Acadia Healthcare operates 593 facilities, including 240 in the United States, according to its website. United Health Services operates 380 health centers worldwide, including in 37 U.S. states and the District of Columbia. Sequel Youth and Family Services operates in 17 states, serving clients from 41 different states or territories, its website states.

Gelser is trying to get Oregon kids out of these companies’ facilities.

“When I started hearings in April, we had 88 children in out-of-state placements. At the last official count, we had 36,” Gelser told The Epoch Times. However, six more children are scheduled to be sent to Sequel-run facilities, she said.

“We’re at less than half of where we are when we started the process. Some of those facilities have been shut down,” Gelser said, referring to the out-of-state treatment facilities. Acadia announced that it would be shuttering its Butte, Montana, site after a 9-year-old girl was injected with Benadryl as a chemical restraint.

“In April, after we had a 9-year-old get chemically restrained (in an out-of-state Acadia facility). DHS promised not to send any more kids to Acadia.

“The rest of the placements are all Sequel. I have significant concerns about those as well.”

Acadia Healthcare

“Acadia Healthcare, based in Tennessee, is operated by the same corporate senior management team that formerly headed Psychiatric Solutions Inc. (PSI), which was acquired by UHS [Universal Health Services] in 2010. … At Acadia, not only are there undisclosed criminal indictments and convictions of former employees for the death or assault of patients, but we found allegations that Acadia has:

  • Destroyed evidence
  • Falsified documents
  • Duped regulators during audits
  • Covered up incidents of patient abuse
  • Submitted fictitious billings to the government
  • Failed to disclose regulatory investigations at certain facilities
  • Retaliated against multiple whistleblowers.”

The report delves into further detail on the problematic companies.

“DRO [Disability Rights Ohio] investigators also discovered a pattern of substandard quality of care at the Acadia-operated Ohio Hospital for Psychiatry, including sexual assaults, physical abuse, and other harmful incidents and quality-deficit problems within the hospital,” Davidson wrote.

“Relevant DRO findings can be summarized in the following comments from their published report: ‘substantiated allegations of sexual and physical abuse’; ‘failure to provide treatment in a trauma-informed setting for survivors of sexual abuse’; ‘failure to request basic medical records and provide appropriate care, resulting in one case of a patient being placed on emergency life support’; ‘using seclusion in an unsafe manner and outside of licensure requirements’; ‘incomplete treatment and discharge plans, placing patients and the public at risk’; [and] ‘using hurtful, outdated, and stigmatizing diagnostic language (e.g., retarded) in patient records.’

“On March 7, 2019, the Chicago Tribune published a Page-1 article on an Acadia RTC near Chicago—headlined ‘6 women sexually abused by counselor at women’s rehab center Timberline Knolls, prosecutors say’—which detailed a longstanding pattern of sexual assaults and abuse of patients at the facility, including reports by prosecutors that Acadia administrators actually delayed notifying law enforcement officials of these incidents for several weeks—and then only after Acadia officials learned that police already were investigating complaints by patients.

“According to the Tribune: ‘A police detective asked a Timberline administrator why Timberline had waited at least the three weeks since July 16 to report [the employee’s] potential crimes. The administrator explained to police that administrators of individual Acadia facilities ‘have to contact corporate with these matters and corporate tells them to investigate and investigate more before they are allowed to call police,’ according to a police report released to the Tribune under open records laws.”


The Oregon report also examines Psychiatric Solutions, which is now owned by Universal Health Services.

“Exhibit 91 is an internal PSI corporate document, written by the CEO of a Chicago psychiatric hospital that was then under review by my UIC team after children referred by DCFS were found to have suffered harm at the facility.

“Among the shocking allegations memorialized by the CEO in this account to her corporate-level manager, Exhibit 91 listed the following: The CEO identified the hospital as ‘a façade peppered with deceit’; the hospital had ‘not reported allegations’ of harm to patients to DCFS or the police; administrators ‘tampered with evidence on reported rape cases’; video evidence of serious incidents was often ‘not being reported’ or shown to DCFS; ‘poor quality’ of patient care existed ‘from top to bottom.’

“Moreover, the CEO charged that PSI’s corporate president—identified by name in this 2008 memo, and the same person who later started Acadia—was ‘infuriated’ by the news media coverage of violence and rapes, saying that he ‘refuses to see the problems,’ and indicating that he and other PSI corporate officials were deliberately ‘ignoring the risks.’

“It is worth noting that the defendants and their representatives in this case [a 2008 lawsuit in Illinois] ultimately chose to settle with plaintiffs for $100 million, a sum that included $35 million in legal fees, rather than risk going to trial in open federal court.

“In fact, had they chosen that option, Exhibit 91 and other such evidence—which clearly indicated a reprehensible practice of knowingly placing vulnerable children in harm’s way in order to increase corporate profits—would then have become unsealed at trial, thereby revealing the sort of business model that likely could not withstand the glare of public scrutiny.

“Stated bluntly, child welfare officials need to understand that there is a compelling body of evidence indicating that certain types of corporations simply cannot be relied upon to tell the truth, especially when adverse events occur in institutional settings where children have been entrusted to their care by agencies like Illinois’ DCFS or Oregon’s DHS.

“Finally, as I noted in the attached 2018 memo on Acadia to the ACLU, two years before Exhibit 91 was written, Virginia moved to revoke the license of a PSI facility in Charlottesville after health officials found ‘multiple violations constituting neglect’ of children in care, including ‘sexual abuse by staff.’  The revocation letter cited ‘inadequate staffing’ as a direct cause of patient harm in a serious incident of violent assault (in which a young boy was beaten so badly that he reportedly stopped breathing temporarily and suffered a seizure).

“Virginia investigators later concluded that ‘in spite of the concerns nursing staff voiced about the severity of his injuries, administrative staff directed nurses not to call emergency services. According to nursing staff, in a meeting held the day after the assault, [the PSI] administrators stated that they did not want 911 called because of concerns that the State might find out.'”


Davidson’s report also details problems with United Health Services, another company managing out-of-state placements for Oregon DCS.

“Universal Health Services, based in Pennsylvania, is the largest operator of private, for-profit, psychiatric hospitals in the United States. Additionally, the company operates a large number of behavioral health RTCs, including a facility where  the DHS list indicates two Oregon clients were placed: Provo Canyon School.

“UHS was charged by the U.S. Department of Justice and the Attorney General of Virginia with health care fraud at one of its residential treatment centers, Keystone Academy. In that case, the government alleged a scheme that included poor quality of patient care, record falsification, and keeping youths unlawfully confined in the facility for extended lengths of stay in order to maximize financial profits.

“Nor was this the only UHS facility where child welfare systems learned that their clients were receiving substandard or even dangerous care. In fact, I informed the Department of Justice about evidence of a similar pattern of harm to patients and record falsification that the UIC team uncovered during a 2011 review at a large UHS hospital in Chicago.

“DOJ officials subsequently requested all of the data and patient records that my UIC team had gathered on UHS’s operations in Illinois, and we turned over 20 boxes of such evidence to the FBI in 2012. DOJ later opened a nationwide criminal investigation of UHS in Illinois and a dozen other states, and that probe is still ongoing.

“Among the findings that the UIC team detailed in the reports to DCFS and the ACLU about the UHS hospital in Chicago were: a consistent pattern of physical and sexual assaults on patients; inadequate staffing levels to ensure patient safety; poor quality of direct-care nursing staff training and supervision; falsification of medical records to conceal harm to patients; withholding information or lying to DCFS as part of the efforts to cover up or minimize adverse events at the hospital.”


“In its previous corporate incarnation, Sequel Youth & Family Services was known as Youth Services International (YSI), a for-profit company that specialized in residential programs for juvenile justice populations. Some of the YSI programs were located in Florida, Maryland, Nevada, Georgia, and Texas–facilities where federal and state investigators later identified a pattern of physical and sexual abuse of youths who had been placed for treatment by juvenile justice and child welfare agencies around the U.S.

“Further, among the lawsuits brought against YSI officials, one in particular–D.M. vs. Youth Services International and JFS Holdings–a federal civil rights complaint alleging harm to youths in care, including sexual abuse by administrators and staff, is perhaps most instructive for any discussion of how state agencies have often failed to exercise effective due diligence when placing children in out-of-state settings that are not easily monitored for quality of care.

“In fact, more recent news media reports about a Sequel-operated RTC in Utah–Red Rock Canyon School, where DHS placed 28 clients–clearly suggest that Clarinda Academy is not the only Sequel facility where Oregon children may be at risk of harm. …

“Such was the case with the family of a 12-year-old rape victim sent to an earlier version of Red Rock, as detailed in a Utah federal court complaint:

“Red Rock was dangerous and debauching. Defendants allowed other students to beat and berate [name of 12-year-old victim redacted], even to urinating on his clothing and effects. [The victim] begged his mother for freedom and his mother asked Defendants to release him. Defendants talked her out of it by promising to move him to a safer place.

“Defendants moved [the victim] in with two much older boys who were adjudicated sex offenders, one of whom, [name redacted], that night raped [the victim] while Defendants slept. Defendants concealed the attack and covered it up while trying to talk [the victim] out of reporting it.

“NOTE: Since the list of Oregon children in out-of-state placements indicates that DHS made one referral each to the Kingston and Norris facilities, it would seem reasonable to inquire whether Tennessee officials notified their Oregon counterparts of the emergency decisions regarding this Sequel program. The same question ought to be raised about whether Sequel officials notified Oregon DHS of Tennessee’s actions in this facility.”

None of the three identified companies responded to requests for comment by The Epoch Times; Oregon DHS also didn’t respond to a request for comment.

Follow Patrick Howley on Twitter @HowleyReporter

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