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The short answer for operators
Three federal storylines will shape behavioral health operating risk for the next 24 months, and treatment center CEOs should treat them as one problem, not three: the 2024 MHPAEA Final Rule (paused as to new provisions, statutory parity obligations still live), a repriced M&A market that rewards clean sellers and punishes sloppy pro formas, and a DOJ, DEA, and HHS-OIG enforcement posture aimed squarely at behavioral health providers.
If you run a treatment center, do not wait for regulatory clarity. Tighten your NQTL documentation with your payer contracting team. Rebuild your pro forma against real 2024 to 2025 comps. Audit your billing, dispensing, and clinical documentation before the DOJ, DEA, or a state Medicaid Fraud Control Unit does it for you.
I spent most of the last twelve months in operator conversations across Florida, Tennessee, and Pennsylvania. The founders sleeping at night are the ones who stopped reading the parity rule, the deal charts, and the enforcement press releases as separate stories.
MHPAEA: the rule is paused, the obligations are not
The Departments of Labor, HHS, and Treasury issued the 2024 MHPAEA Final Rule on September 9, 2024 to implement the Consolidated Appropriations Act, 2021 requirements for NQTL comparative analyses. Then the ERISA Industry Committee sued. On May 9, 2025 the Departments asked the D.C. Federal court to hold the litigation in abeyance, and on May 15, 2025 they issued a joint statement announcing non-enforcement.
Read the scope carefully. In the joint statement, the Departments wrote that they “will not enforce the 2024 Final Rule or otherwise pursue enforcement actions, based on a failure to comply that occurs prior to a final decision in the litigation, plus an additional 18 months.” The relief applies only to portions of the 2024 rule that are new relative to the 2013 rule. The Departments were explicit that MHPAEA’s statutory obligations, as amended by the CAA 2021, continue to have effect, including the requirement to develop and produce NQTL comparative analyses on request.
Two things follow for a Florida PHP or a Tennessee residential program. First, your commercial payers still owe you (and the DOL, and your state regulator) a real NQTL comparative analysis on request. Second, states are not standing down. HHS encouraged states to adopt a similar approach, but several state legislatures have already codified parts of the 2024 rule into state law, and state departments of insurance retain independent authority. If your utilization management denial rates for ASAM levels of care look nothing like your medical or surgical peers, put it in writing to the plan and escalate to your state department of insurance.
The M&A reset: mix changed, buyers got pickier
The story most operators are being sold, that behavioral health M&A collapsed, is not accurate. Mertz Taggart reported 37 transactions in Q4 2024 alone, comprising 26 traditional M&A deals and 11 growth deals, bringing 2024 to a combined 155 transactions. The 11 growth deals in Q4 carried a combined value of approximately $170 million. That is not a dead market.
Kevin Taggart, managing partner at Mertz Taggart, described the late-Q4 dynamic bluntly: “Buyers who had been sitting on the sidelines for a while reached out to us late in Q4 to catch up before the new year.”
SUD-specific volume tells the sharper story. Mertz Taggart tracked 36 addiction treatment transactions in all of 2024, up modestly from 29 in 2023 but still far below the 79 completed in 2021. Mental healthcare provider deals reached 99 transactions in 2024, with 25 in Q4 alone.
For a seller, three things are non-negotiable now. Your trailing twelve months has to be clean and defensible. Your payer contracts have to look like an asset, not a liability. And if you are SUD-heavy, you need a specific story for why your census, ASAM level-of-care mix, and Medicaid exposure make you an exception to a sector that has repriced.
Federal enforcement: this is the part operators are underweighting
While operators watched the parity rule and the M&A charts, the DOJ was building cases. On January 15, 2025 the DOJ reported that False Claims Act settlements and judgments exceeded $2.9 billion in fiscal year 2024, with nearly $1.7 billion tied to the health care industry. Whistleblowers filed 979 qui tam lawsuits in FY 2024, the highest single-year total on record.
Inside that healthcare number sits a case every behavioral health CEO should read. On September 26, 2024, the DOJ announced that Acadia Healthcare Company Inc. Agreed to pay $16,663,918 to the United States, plus an additional $3,186,082 to Florida, Georgia, Michigan, and Nevada, to resolve alleged False Claims Act violations for medically unnecessary inpatient behavioral health services. Principal Deputy Assistant Attorney General Brian M. Boynton said the settlement demonstrates the Justice Department’s “commitment to ensuring that federal healthcare programs pay only for services that are needed and properly provided,” and emphasized that standard for a vulnerable inpatient population.
That is a public company, publicly resolving allegations about the exact operational controls, admission criteria, and length-of-stay documentation that state surveyors ask about on every EOC tour.
The 2025 National Health Care Fraud Takedown made the direction of travel even clearer. On June 30, 2025, the DOJ announced criminal charges against 324 defendants in 50 federal districts and 12 State Attorneys General’s Offices, tied to over $14.6 billion in intended loss, along with seizures of more than $245 million in cash, luxury vehicles, cryptocurrency, and other assets.
Then in December 2025, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced that Recovery Centers of America agreed to pay $1,000,000 to resolve Controlled Substances Act allegations and an additional $1,000,000 to resolve False Claims Act allegations, based on DEA audits and investigations conducted at RCA facilities in Pennsylvania and Maryland between 2019 and 2024. Read that timeline. The DEA was quietly auditing while the company was building. That is the pattern operators should expect going forward.
What treatment center CEOs should actually do in the next 90 days
I push every founder and CEO I advise to run five workstreams in parallel. None of them are optional given what the DOJ, DEA, and DOL have telegraphed.
- NQTL and payer file. Pull the last 12 months of denials and appeals by payer. Compare authorization patterns for your ASAM level-of-care work against comparable medical or surgical categories. Where you cannot explain a disparity, put it in writing to the plan and escalate to your state department of insurance.
- Mock survey and human chart audit. Not AI-only. A human chart audit against your accreditation body’s current standards, with surveyor focus on medical necessity, discharge planning, and staffing documentation. The Acadia settlement tells you exactly where prosecutors are looking.
- DEA and controlled substance file. If you dispense, review your Controlled Substances Act record-keeping against DEA expectations. The RCA settlement is a template for what a bad audit looks like when it lands five years later.
- Pro forma reality check. Rebuild your forecast against actual 2024 to 2025 SUD and mental health comps, not 2021 assumptions. Buyers will.
- Compliance program budget and owner. If your compliance program is a part-time responsibility layered onto a clinical or operations lead with three other jobs, that is your single biggest unhedged risk right now. Name an owner. Fund the seat.
None of this is glamorous. All of it is what separates the operators who exit well from the ones who become the next press release.
Frequently asked questions
Is the 2024 MHPAEA Final Rule still in effect for behavioral health providers and their payer contracts?
The rule became effective November 22, 2024, but on May 15, 2025 the Departments of Labor, HHS, and Treasury announced they will not enforce the 2024 Final Rule (as to its new provisions) prior to a final decision in the pending ERIC litigation, plus an additional 18 months. Critically, the 2013 MHPAEA rules and the CAA 2021 NQTL comparative analysis requirements remain in force. Providers should continue to challenge disparate NQTLs in payer contracts, denials, and appeals, and monitor state parity enforcement, which is not paused.
Did behavioral health M&A actually collapse in 2024?
No. Mertz Taggart tracked a combined 155 behavioral health transactions in 2024, including 37 in Q4 alone. Addiction treatment volume stayed depressed relative to its 2021 peak of 79 deals, coming in at 36 deals in 2024, but the market rewarded clean sellers with defensible payer contracts, credible pro formas, and a clear ASAM level-of-care mix rather than shutting down.
Which federal enforcement actions should behavioral health CEOs be watching most closely?
Three. First, the September 26, 2024 Acadia Healthcare $19.85 million total settlement ($16.66 million to the federal government and $3.19 million split among Florida, Georgia, Michigan, and Nevada) over allegedly medically unnecessary inpatient behavioral health services, which maps directly to state survey focus areas. Second, the June 30, 2025 National Health Care Fraud Takedown, which charged 324 defendants tied to over $14.6 billion in alleged intended loss across 50 federal districts, with over $245 million in assets seized. Third, the December 10, 2025 Recovery Centers of America $2 million settlement resolving DEA audit findings on Controlled Substances Act violations at Pennsylvania and Maryland facilities and False Claims Act allegations tied to inadequate treatment services.
What should a treatment center CEO do in the next 90 days to reduce exposure across parity, M&A, and enforcement risk?
Run five parallel workstreams: an NQTL and payer denial analysis to document parity comparators; a human-led mock survey and chart audit against your accreditation body’s standards, focused on medical necessity, discharge planning, and staffing documentation; a DEA controlled substance record-keeping review if you dispense; a pro forma rebuild against actual 2024 to 2025 SUD and mental health comps rather than 2021 assumptions; and a named owner with a real budget for your compliance program rather than a part-time responsibility layered onto an already stretched clinical or operations lead.
References
- U.S. Departments of Labor, HHS, and Treasury, Statement Regarding Enforcement of the 2024 MHPAEA Final Rule (May 15, 2025)
- U.S. Department of Justice, False Claims Act Settlements and Judgments Exceed $2.9B in Fiscal Year 2024 (January 15, 2025)
- U.S. Department of Justice, Acadia Healthcare Company Inc. To Pay $19.85M to Settle Allegations Relating to Medically Unnecessary Inpatient Behavioral Health Services (September 26, 2024)
- U.S. Department of Justice, 2025 National Health Care Fraud Takedown (June 30, 2025)
- U.S. Attorney’s Office, E.D. Pa., Recovery Centers of America Agrees to Pay $2 Million (December 10, 2025)
- Mertz Taggart, Q4 2024 Behavioral Health M&A Report