The share price of Universal Health Services plunged 12% Wednesday after BuzzFeed published an investigative story alleging the for-profit hospital operator kept psychiatric patients longer than necessary to milk their insurance.
The investigation has as its subhead: "Lock them in. Bill their insurer. Kick them out. How scores of employees and patients say America's largest psychiatric chain turns patients into profits."
UHS denied the allegations in the story and said care is only meted out based on clinical need, not financial consideration. “Decisions regarding admissions are made by an attending psychiatrist in consultation with members of the clinical treatment team,” the company said in a statement to Buzzfeed.
UHS sent a statement to Modern Healthcare that did not list any specific factual errors in the Buzzfeed article. The company said Buzzfeed made "unsupported assumptions" and "diminishes the complexity of behavioral health assessments and treatment."
"We dispute and deny the conclusions drawn by the reporter in relation to UHS and believe that the story misses the mark in several important ways leading to an inaccurate portrayal of UHS's behavioral health operations," the statement reads in part.
The sell-off of UHS' shares started about 3:15 p.m. ET Wednesday, less than an hour before the close of trading. The $15-per-share decline left UHS shares trading at $111.36 by the time the market closed. The company's shares were up for all of 2016 until the BuzzFeed story hit. The company ended 2015 at $119.49.
UHS operates behavioral-health facilities and acute-care hospitals. The King of Prussia, Penn.-based company posted net profit of $152 million and revenue of $2.4 billion in the third quarter of this year.