Payers of $8.4 million for false claims Universal Health Services take over Cygnet Health Care for £205 Million.


Cygnet Health Care is one of mainly three providers of mental health services in England.

Mental Health Services are paid over 21 billion of our 95 billion NHS budget.

In 2014 Cygnet was bought by USA’s Universal Health Services (UHS) for £205 million..

Simons Stevens, chief executive of the group’s global division for 10 years after advising Blair on NHS public investment, is chief executive of NHS England, responsible for all NHS services commissioning.


Cygnet Health Care then increased UHS’s UK mental health footprint by a £95 million acquisition of Alpha Hospitals .

In September 2012, UHS, and its subsidiaries, Keystone Education and Youth Services LLC and Keystone Marion LLC,Keystone Marion Youth Center, agreed to pay over $6.9 million to settle allegations that they had submitted false and fraudulent claims to Medicaid.

Between October 2004 and March 2010, these subsidiaries provided substandard psychiatric counselling and treatment to adolescents in breach of Medicaid requirements.

And, the United States alleged UHS had falsely represented Keystone Marion Youth Centre, as a residential treatment facility, providing inpatient psychiatric services to Medicaid enrolled children, when in fact, it was a juvenile detention facility.

It further alleged, that neither a medical director, nor, licensed psychiatrist provided the required direction for psychiatric services or for the development of initial or continuing treatment plans.

The settlement also settled allegations, that the service providers filed false records or statements to Medicaid, when they filed treatment plans, that falsely represented the level of services that would be provided to the patients.

See below under Other Medicaid Matters p33.

In July 2002, the New York State Insurance Department fined United Health Care $1.5 million for ‘cheating patients out of money’.

Is this the sort of ethos that should now control a quarter of public, enforced, secret unaccountable services to our most vulnerable and receive a tenth of our NHS budget ?

In 2011 Cygnet was warned by the Care Quality Commission that staffing levels at Cygnet Wing Blackheath were inadequate..

Improvements were still required at the CQC inspection in April 2014.

In 2013 the Care Quality Commission issued a warning to Cygnet Hospital Bierley because the service was failing to ensure that appropriate records were kept.

John Hughes, an American founded Cygnet in 1987 after turning the Priory around.

In 2004 Cygnet was valued at £120m in a deal with Barchester Healthcare, which earned Hughes a £19m cash windfall.

Barchester, is part-owned by John Magnier and JP McManus, the Irish racing tycoons who owned Winterbourne View’s Castlebeck,.

They bought a quarter of Cygnet’s business for £30m, and Hughes, and a fellow director took a £7m stake in Barchester.

Hughes completed a £340m buy-out in 2008, backed by Mr Wilson’s health care group Grove, which had bought a 25pc stake in Cygnet years earlier.

And would have received another windfall.

In 2014 Hughes’ sale to UHS earned him a £30 million windfall.

Tycoons have made millions from mental health services now 87% financed by public NHS money, whilst public trusts are cash strapped and in debt.

And, are set to make far more profit from the governments drive ‘to parity with physical health’, and now have nearly a quarter of the NHS budget.

Yet from CQC reports mental health services in the UK are getting worse not better.

And the physical health of mental patients and effect of enforced medication is ignored and a report in 2013 revealed 3 a day are dying needlessly.

Robert Kehoe , psychiatrist, advertises himself, as an ‘expert witness’, is now the medical director of Cygnet, and, has apparently, advertised some of their units as being for ‘resistant service users’.

Dr Kehoe was an NHS Consultant for nine years and Assistant Medical Director at Airedale NHS Trust and produces 80 to 100 psychiatric reports per year for Courts and Tribunals.

He is also responsible office for Cygnet Healthcare with national responsibilities for the regulation and revalidation of medical practitioners.

So, one expert, now controls the appraisals and code of conduct of all psychiatrist services and opinions, in a multimillion pound conglomerate, serving a quarter of all mental health services.

Universal Health Services and Cygnets’ overriding ethos, is to make as much profit as possible for its directors, managers and investors.

Does this not conflict with the professional independence of the psychiatrists, psychologists, practitioners, who work for Cygnet, and are subject to Cygnet’s stringent codes of conduct and continual appraisal systems ?

All hospitals and medical directors and professionals are under strict  regular appraisals and uniformity.

How does this promote, the diversity of opinion needed for best practice, particularly, in the uncertain arena of psychiatric medicine ?



  1. Well done for bringing all this information into one place.

    Mind you, it tempts me to despair, as does the opening of new in patient units when Transforming Care is supposed to be moving people home. What to do?


  2. Could not agree more.

    I tried to provide private care for the past four months in desperation. Due to the most terrible treatment over the past years by my area ENFIELD MH and trauma, that has been left untackled over the past ten years, my daughter’s condition has worsened, but for four months up until December she has thrived on the right kind of care, but since coming home to ENFIELD with nothing provided, has deteriorated.

    And suddenly the truth is coming out about serious incidents that have happened under a care provider situation in one of the best areas of ENFIELD, which I do not think have been properly dealt with, bearing in mind the seriousness of the issues which since 2010 are still fresh in my daughter’s mind.

    This points not to mental illness but trauma, but where is the real help – the real help is not drugs, and now she is sadly at Cygnet Beckton, and I was far from happy with Cygnet in Stevenage, where the drugs were raised to double Abilify 20mg, ignoring the P450 liver enzyme test results which clearly showed she was a poor, none metaboliser of psychiatric drugs.

    Already they have put her back on Abilify which caused two serious problems, but at a low dosage so far, but also introduced Clonazepam, and I am extremely unhappy about this, as I have had to complain about the Ability to the FDA and British Equivalent – This drug is only licenced for Bi Polar and Schizophrenia, but my daughter has other diagnoses such as PTSD and Aspergers and I am trying to get justice for those who are multiply diagnosed where professionals are in doubt.

    Wrong label leads to wrong treatment.

    In order to do this I have just written a letter to all leading politicians and copied nearly everyone I could think of in.

    It is about time assessments were done more accurately and tests done on endocrinology, ruling out physical illness and other causes and also whether someone can actually metabolise the drugs themselves before prescribing.

    As I have proven, POOR /NON METABOLISER in tests, costing just £50 done by world leading experts in Holland. Why aren’t these tests available to all.

    Why do some drugs contain dangerous ingredients like aspartame such as Clozapine and Abilify.



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