Private Equity Snaps Up Disability Services, Challenging Regulators

Summary

Private equity companies have gobbled up group homes and other services for people with disabilities, attracting the attention of state and federal regulators across the nation and alarming advocates.People with intellectual or developmental disabilities have suffered abuse, neglect and even death while under the care of private equity-owned providers, according to a recent report from watchdog group Private Equity Stakeholder Project.“Private equity firms are, more than many other types of investors, laser-focused on maximizing their cash flow, often trying to double or triple their investment over a relatively short period of time, usually just a handful of years,” said Eileen O’Grady, the report’s author. “The way that private equity firms will often do that is to cut costs.”For companies that provide essential services for people with disabilities, she said, “those cuts can have really harmful impacts on people’s lives.”In late 2023, Florida moved to revoke the license of NeuroRestorative, one branch of the private equity-owned health services company Sevita, which provides services for people with disabilities. State regulators cited repeat violations by NeuroRestorative and a failure to “protect the rights of its clients to be free from physical abuse.” Ultimately the state opted not to revoke the license and fined the company $13,000 in a settlement.But in recent years regulators have documented instances of patient harm at Sevita’s affiliates in multiple other states, including Colorado, Indiana, Iowa, Massachusetts and Utah. In 2019, a U.S. Senate committee conducted a probe into the company’s operations in Iowa and Oregon following multiple reports of patient abuse and neglect.“Any entity that receives taxpayer dollars, but especially those charged with caring for our fellow Americans who may have an intellectual disability, ought to be doing everything under the sun to ensure quality care and continually improve,” U.S. Sen. Chuck Grassley, an Iowa Republi...