News Summary
Carolina House, a mental health services provider in Durham, will close this fall, affecting 90 employees. The decision follows financial and legal challenges faced by its parent company, Acadia Healthcare. The upcoming closure will lead to layoffs and a transition for current patients to other providers. Carolina House has operated since 2006, providing specialized treatment for eating disorders but now faces a significant shift in the local mental health care landscape.
Durham, North Carolina — Carolina House to Close After 19 Years, Impacting 90 Employees Amid Financial Troubles
Durham’s healthcare landscape will see the closure of Carolina House, a mental health services provider, this fall. The facility, which has operated near Jordan Lake for nearly two decades, will cease its local operations affecting approximately 90 employees. The closure comes during ongoing financial and legal challenges facing its parent company, Acadia Healthcare.
Details of the Closure
Carolina House, which opened in 2006, has provided specialized treatment for patients with eating disorders such as anorexia, bulimia, and binge eating. Over the years, the facility expanded from an initial six-bed center to include multiple sites in a remote section of South Durham. The upcoming shutdown will result in layoffs scheduled to take effect in early November. This was communicated through a WARN Notice sent by human resources manager Brittney Bailey to the North Carolina Department of Commerce on September 10.
The Worker Adjustment and Retraining Notification (WARN) Act requires businesses to notify the state at least 60 days prior to mass layoffs, enabling the state to mobilize rapid response teams to assist displaced workers. The notice indicates that the affected employees include registered nurses, therapists, nutritionists, office staff, and yoga instructors.
Reasons Behind the Closure
Although no official reason has been specified by Carolina House or Acadia Healthcare for the shutdown, it coincides with significant challenges faced at the corporate level. Acadia Healthcare, a major player in behavioral health, has been experiencing notable financial and legal issues, which are likely contributing factors to the decision.
Acadia Healthcare acquired Carolina House in 2015, having previously operated it through CRC Health Group. The company now manages 13 facilities across North Carolina with a total of 376 beds. In addition to existing inpatient and outpatient services, Acadia has expanded recently, partnering with ECU Health to establish a new 144-bed behavioral health hospital in Greenville, North Carolina.
Financial and Legal Challenges Facing Acadia Healthcare
Over the past year, Acadia’s stock price has plummeted by 73%, driven by investigations into its billing practices and patient admissions policies. Allegations against the company claim that it systematically kept patients hospitalized longer than necessary for financial gain, a charge the company denies. Despite these claims, the company’s revenue has heavily depended on Medicaid, which in 2021 accounted for over half of its income. Recent legislation, such as the recently enacted One Big Beautiful Bill Act, may threaten this revenue stream.
During an earnings call, Acadia’s CEO Christopher Hunter acknowledged that new legislation required the company to reconsider its investment and expansion plans. The company’s financial stability and ongoing legal inquiries have added pressure to its operational decisions, including the upcoming closure of Carolina House.
Transition Efforts and Future Plans
In response to the closure, Acadia Healthcare has announced plans to assist current patients and their families in transitioning to other providers before the Durham sites close on October 9. The company’s spokesperson stated that the decision to shut down Carolina House was the result of a comprehensive review of its programs and service capabilities.
Background and Context
Carolina House initially focused on treating eating disorders but expanded in 2017 under Acadia management to include a residential facility aimed at general adult mental health disorders. This diversification reflected its growth over the years, but the current financial climate and legal issues appear to have played a role in its closure decision.
Nationwide, approximately 9% of the U.S. population will develop an eating disorder at some point in their lifetime, as reported by the National Association of Anorexia Nervosa and Associated Disorders. Such mental health challenges continue to be a critical component of healthcare services across the country, and the closure of key facilities like Carolina House represents a significant shift in local mental health care delivery.
Summary
The upcoming closure of Carolina House in Durham, affecting 90 employees, marks the end of nearly two decades of specialized mental health service in the area. While no official reason has been given beyond financial and legal stresses faced by its parent company, Acadia Healthcare, the decision aligns with broader challenges in the behavioral health industry nationwide. Efforts are underway to ensure ongoing patient care and transitions remain as smooth as possible amid this change.
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Additional Resources
- News Observer: Carolina House to Close
- Wikipedia: Eating Disorder
- BH Business: Acadia Healthcare Layoffs
- Google Search: Acadia Healthcare closure
- The Guardian: NHS Mental Health Care Inquiry Failings
- Encyclopedia Britannica: Mental Health
- LAist: Orange County Mental Health Cuts
- Google News: Mental Health Care News
- ABC11: Hurricane Recovery and Hospitals
- Google Scholar: Eating Disorder Treatment
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RALEIGH STAFF WRITER The RALEIGH STAFF WRITER represents the experienced team at HERERaleigh.com, your go-to source for actionable local news and information in Raleigh, Wake County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the North Carolina State Fair, Raleigh Arts Festival, and the Hopscotch Music Festival. Our coverage extends to key organizations like the Greater Raleigh Chamber of Commerce and Visit Raleigh, plus leading businesses in technology and education that power the local economy such as Red Hat and NC State University. As part of the broader HERE network, including HEREAsheville.com, HERECharlotte.com, HEREGreensboro.com, and HEREOBX.com, we provide comprehensive, credible insights into North Carolina's dynamic landscape.
