Psychiatric Solutions, Franklin, Tenn., said it has received a subpoena from the U.S. Justice Department seeking certain information about the behavioral healthcare companys Riveredge Hospital in Forest Park, Ill., a western suburb of Chicago. The company intends to provide the requested information to the Department of Justice, Psychiatric Solutions said in a July 31 filing with the Securities and Exchange Commission.
The Illinois Department of Children and Family Services placed Riveredge on intake hold on July 8, meaning the department is not admitting wards of the state to the facility. It will remain on hold until the department is fully satisfied that the safety of children is assured, according to Kendall Marlowe, a spokesman for DCFS.
In mid-July, a Chicago Tribune article reported that Riveredge had left sexual predators unguarded despite allegations that at least 10 mentally disabled children had been assaulted during the past three years. The report also said Riveredge had failed to promptly notify DCFS of a July 5 fight in the adolescent-boys unit.
Earlier this week, Psychiatric Solutions hosted a conference call to report its second-quarter earnings. The company reported revenue of $451 million for the second quarter of 2008, compared with $350 million in the year-ago period. On the call, President and Chief Executive Officer Joey Jacobs said, Riveredge is currently in discussions with DCFS and expects to conclude those discussions soon. As a result, we dont expect a material adverse financial impact from the admissions hold. -- by Jessica Zigmond