Last March, a group of beaming politicians with shovels posed for a photo-op at a ground breaking ceremony on the 110-year-old campus of Metropolitan State Hospital in Norwalk, California. Governor Gavin Newsom had signed legislation in 2024 authorizing Los Angeles County to remodel six shuttered buildings on the 162-acre asylum complex, including two 16-bed locked subacute facilities for youth. The governor’s PR portrays the Metropolitan State Hospital project as transformation, even as it represents a literal refurbishing of facilities abandoned for decades as a result of deinstitutionalization, or the closure of massive state hospitals warehousing people with psychiatric, intellectual, and developmental disabilities beginning in the 1950s and 1960s.

“We are facing a crisis,” Kyla Coates, senior justice and mental health deputy for Los Angeles Supervisor Janice Hahn’s office, told the Los Angeles Times. “We cannot have unused empty buildings that are government-owned sitting around. We need to renovate them, reuse them and turn them into places where we can really provide care to those who need it.”

Coates is far from alone in her description of a bed crisis. We hear calls for new beds based on the stated premise that deinstitutionalization led to many severely mentally ill people living on the streets and being ushered into jail settings, and that more beds in state hospitals would provide access to treatment and care that is absent today for many. But the real impulse is a staggering increase in criminal cases where the defendant is deemed “incompetent to stand trial,” or IST, which in turn pushes those deemed incompetent into a status where they can be locked up in an asylum setting indefinitely.

 

NRI, once the research arm of the National Association of State Mental Health Program Directors, and the self-described “leading organization for collecting performance measurement data from a majority of state psychiatric facilities,” recently spotlighted its 2025 Use of State Psychiatric Hospitals report. “For the first time in over 70 years, more states are increasing state psychiatric hospital capacity by building new hospitals and opening, or re-opening, state psychiatric hospital beds,” reads the dramatic pull quote on the first page of the NRI report. The framing seems to celebrate this state of affairs as a historic milestone or turning point, invoking the specter of reinstitutionalization that disability rights activists have long warned about.

The NRI report tells a story of rising psychiatric bed shortages over recent decades. When the organization first began collecting information from state hospitals in 2002, it said 50 percent of responding state agencies had perceived a bed shortage. By 2025, that percentage had nearly doubled, with 43 out of 48 respondents—fully 90 percent of state agencies—reporting a shortage. According to NRI’s narrative based on self-reported data collected from state mental health agencies, the overcrowding occurring at state hospitals is not due to general demand but to an increasing number of people referred to IST commitments.

But as Rob Wipond reported in Mad in America in 2023, the bed shortage is a well-worn myth that has become the “dominant narrative.” As Wipond’s report exposed, the total number of psychiatric beds per capita has never been higher in the US than it is today. Yet the bed shortage myth continues to persist, having an outsized influence on policy and practice. 

When a moral panic is taken as undisputed fact

To say that the psych bed shortage is a myth is not to deny the very real backups, delays, and bottlenecks that exist in our system. These may manifest as psychiatric boarding of children and adults in EDs, out of state placements severing connection to family and community, wait lists that confound the imagination, rampant criminalization of disability, and assorted horrors in American mental healthcare. These are all tangible, documented sources of serious harm, misery, and death.

But the false narrative that deinstitutionalization caused a psych bed crisis has become a full-blown moral panic, building since the 1990s due to the efforts of Treatment Advocacy Center (TAC); amplified in the 2010s by TAC’s champion on Capitol Hill, former Congressman Tim Murphy; and further legitimized by the American Psychiatric Association in 2022, among a host of media organizations and advocacy groups disseminating the narrative.

The same configurations of people and groups have promoted another, related well-worn trope: “Prisons are the new asylums.” This narrative posits that again, because of deinstitutionalization and the so-called bed crisis, jails and prisons are supposedly becoming “the largest de facto provider of mental healthcare in the US,” language repeated in the media ad infinitum. Such framing falsely implies that jails and prisons can be sites of care, when in reality, congregate spaces of confinement have always driven disablement and distress.

In a 2017 paper, “Why Prisons Are Not ‘The New Asylums,’” Dr. Liat Ben-Moshe critically deconstructs and debunks the “New Asylums” trope from every angle, illustrating that to blame deinstitutionalization in the 1960s and 1970s for mass incarceration is to totally miss the mark. Instead, Ben-Moshe argues, we must look to the 1980s, to the rise of neoliberalism and Reaganomics, alongside the decline of the welfare state and defunding of vital housing subsidies keeping roofs over heads. Ben-Moshe also points to the influence of redlining policies and processes of gentrification that have impacted Black and Brown communities generationally. She invites us to understand housing deprivation and incarceration as linked to a series of overlapping oppressions that she terms racial criminal pathologization.

“The ‘New Asylums’ thesis,” Ben-Moshe writes, “puts the blame on an easy target, deinstitutionalization, and away from discussions of neoliberal policies that led simultaneously to the growth of the prison system and to the lack of accessible and affordable housing.”

If deinstitutionalization is the wrong culprit, then what, precisely, is the nature of the crisis in this country’s mental healthcare system? The answer to that question, at least in part, lies in an examination of the competency restoration process, located at the shadowy intersection of America’s entwined civil and criminal systems of punishment and neglect.

Competency restoration: a ‘silent’ crisis

“Until probably the last four or five years, maybe even closer to now, [IST] has really been a silent crisis,” Robert Fleischner, senior consultant for the Massachusetts Association for Mental Health and former assistant director of the Center for Public Representation, who is widely regarded as a national expert on competency restoration and disability, told Mad in America.

“People have not talked about it much or done much about it. Mental health systems particularly don’t acknowledge it. But that has become much less true, as the problem has exacerbated,” Fleischner said.

While SAMHSA does not track the legal statuses of people committed to state hospitals, NRI has an internal data measurement system that discerns this information on the state level. Their analysis shows that over the last decade in most states, there has been a significant increase in people being referred to IST through the criminal legal system, while the number of patients coming through the civil side has decreased by as much as 50 percent.

Historically, the responsibility has fallen mainly on the state hospitals to provide competency restoration evaluation and services. The private sector may accommodate people who are on civil temporary detention orders or mental health holds because they have been deemed a danger to self or others, but as a rule they do not handle competency restoration when people are committed via the criminal-legal side.

While the process varies wildly among states and jurisdictions, how it generally works is that after a person is arrested and charged with a crime, typically judges and public defenders may “refer” them to an IST commitment. Fleischner sees an inability or unwillingness on the part of judges and public defenders to take their time in communicating with disabled defendants facing criminal charges. “People appear to be behaving strangely or to exhibit unusual beliefs, or to not be responsive, or to be acting out in some way in the courtroom. Lawyers respond too quickly saying, ‘I can’t communicate with my client.’ And judges respond too quickly,” he said.

At times, these choices appear to be driven by the attorneys’ desire for their clients to access the “better” of two locked, carceral options. “From the defense lawyer’s point of view, sometimes that’s useful because the person’s going to be held [in jail] because they can’t make bail,” he said, “The client would rather be in a mental hospital than in a jail somewhere.”

This is where the first stage of waiting sets in. In some states and jurisdictions, defendants on IST commitments must wait for days, weeks, or months, more often than not in a jail cell, until a state hospital bed becomes available for the evaluation.

Once evaluated, the majority will be found competent and the criminal-legal process resumes as usual.

If the person is evaluated and found to be incompetent, then they must go through yet another gauntlet to access restoration services. These individuals can become trapped in what law scholars call “competency limbo,” held in jails or state hospitals for months or years, waiting.

As UC Irvine law professor Susan McMahon, who has partnered with the National Council on State Courts to provide a new suite of competency resources, noted in a recent NCSC webinar, the goal of competence restoration is not treatment. It is a process focused narrowly on symptom stabilization, generally through psychotropic medication, as well legal education designed to “get someone to the point where they can function in the courtroom.”

“This is not work that is designed to make a person better long-term,” McMahon underscored.

After finally accessing the services, research finds that most defendants are considered to be “restored” within six months. At this point these cases usually result in a guilty plea and are dismissed with time served. Then, individuals are then typically sent back into the community without any resources or services. In many cases, they soon end up re-arrested.

“We see this cycle happening over and over,” said McMahon.

Those who are referred for competency restoration often will spend far more time—sometimes years of their lives—behind bars and in locked forensic facilities, than they would have if they went through the criminal-legal system as usual, or even if they were civilly committed.

Fleischner recalled a client he’d represented at Bridgewater State Hospital years ago. “He’d been there six years, and he was supposedly incompetent to stand trial, and he was charged with purse snatching,” he told Mad in America. “He would’ve been at most out on probation [if found competent].

Another form of competency purgatory sets in when a person is found to be non-restorable due to the nature of their health condition or disability. A 2014 research article looking at long-term competency restoration noted that those found unable to stand trial despite restoration efforts, face “potential de facto indefinite institutionalization.”

Overwhelmingly, those facing IST commitments are among the most vulnerable groups in the US. Many are Black and Brown people living with psychosocial, intellectual, and developmental disabilities. A growing number of referrals are people living with dementia or Alzheimer’s. The majority are diagnosed with some form of psychosis. In most states and jurisdictions, people who are unhoused or who use drugs are primary targets for the racial criminal pathologization that often leads to an IST referral.

Many advocates, including Fleischner, reference an increase in acuity among those who get ensnared in the competency restoration quagmire. “We over-criminalize behaviors that may be related to someone’s emotional distress,” he told Mad in America.

Paolo del Vecchio, former SAMHSA official and co-chair of the People Organized for Wellness, Empowerment, and Recovery (POWER) Coalition, echoed these observations, telling Mad in America via email that the increase in acuity seems to be the result of the “decimation of our safety net” and “the age of anxiety/stress/trauma that we live in.”

Researchers have also traced the rise of the opioid crisis beginning in the mid-2010s alongside the surge in IST commitments.

Frequently, IST defendants are charged with low-level misdemeanors that can be understood as survival crimes, which legal scholar Yvette T. Butler defines as “criminalized activities undertaken to survive extreme financial hardship and the inability to otherwise meet basic needs such as food or shelter.”

The human cost of confining people under IST commitments is incalculable. Disabled and vulnerable people who are supposedly innocent until proven guilty have been forced into jails, often held indefinitely in conditions of solitary confinement. Some, like Jillian White, who had a brain injury and was placed in solitary confinement at Colorado’s Pitkin County Jail awaiting transfer to an inpatient facility for restoration on petty theft charges, died by suicide rather than endure the ongoing torture.

Could the psychiatric bed crisis be a manufactured distraction, pulling focus from IST and what is ultimately a constitutional crisis? And if so, how did we get here? To decode this tangle of crises, let’s look at the history of competency restoration, its implementation, and its misrepresentation.

A legal standard gone horribly awry

The designation of IST is often confused with the insanity plea, but they are distinct legal concepts. With Not Guilty by Reason of Insanity, or the NGRI plea, one can be considered fully competent to stand trial in the present, but the defense may argue that at the time of their arrest, they were unaware of their actions or their consequences. The NGRI defense is notoriously difficult to prove in court, and therefore rarely used.

IST on the other hand, says that a person is not currently able to exercise their right to defend themselves in court, and is not necessarily looking at their state of mind in the past.

Competency restoration was first established as a legal standard in 1960 in the landmark U.S. Supreme Court case Dusky v. United States. In a brief, two-paragraph decision, Dusky found that under the Due Process Clause of the Fourteenth Amendment, a defendant must be able to both understand the trial proceedings and to assist in their own defense.

The 1972 US Supreme Court case Jackson v. Indiana sought to clarify Dusky, considering the length of confinement question. In this case, the Court held that states cannot indefinitely confine criminal defendants solely because they are found incompetent to stand trial; and that such indefinite detention represents a due process violation.

Jackson held that a defendant can only be held for restoration for a “reasonable period of time.” The Court declined to define “reasonable time,” leaving this determination to the states. This reasoning was based on the acknowledgement of the limited evidence base on the process of restoration itself, which seemed to mitigate against imposing arbitrary timelines.

Forensic researchers, examining the implementation of Jackson forty years on in 2012, noted that in the intervening decades, “the basic principles of the Jackson ruling have deteriorated in … application.” At the time of their writing, the researchers noted that eleven states had become even more punitive in their interpretation and application of the opinion.

In recent years, in response to several class action lawsuits, some states have begun to reform their statutes, clarifying time limits and legislating community-based outpatient restoration programs, but many of the troubling due process gaps and murky definitions remain.

“Nationally, Jackson is basically ignored,” Fleischner told Mad in America. “It’s this great opinion and … it hasn’t really been implemented.” To this day, one-quarter of states have no time limit on the competence restoration process, according to data analyzed by the NCSC.

Tragically, legal observers predicted today’s crisis almost from the start. Writing in 1972 in the wake of Jackson, leading US legal scholars Robert Burt and Noval Morris opened with a chilling statistic about defendants on IST commitments at Bridgewater State Hospital in Massachusetts: “More … had left by dying than by all other avenues combined.”

In 1972, Burt and Morris proposed abolishing the incompetency plea altogether—a policy far more radical than most floated today. Their proposal would have compelled states to either restore defendants within six months, drop the charges altogether, or provide an accessible trial tailored to the disabled person’s support needs.

Almost fifty years later, legal advocates continue to argue for sharply limiting, if not abolishing, IST commitments. In 2020, a Council of State Governments Justice Center report recommended competency restoration only for the most serious cases deemed “not appropriate for diversion or dismissal.” Professor McMahon, in a 2025 paper, advanced a proposal to divert misdemeanors out of the restoration process, turning to what she calls “noncarceral models.”

Still others have called for a public health approach informed by the social model of disability, that recognizes the competency crisis as a “systemic issue resulting from insufficient community-level care” requiring structural solutions. Interrupting Criminalization calls for an end to “problem-creating courts” and the dismantling of structural forces driving the criminalization and pathologizing of race, class, and disability.

State level data reveal stark disparities. In 2021, director of California’s Department of State Hospitals Stephanie Clendenin, speaking on a NAMI California webinar, said departmental data revealed that 47% of individuals referred to IST were unhoused at the time of their arrest. The same percentage of people had not accessed Medi-Cal mental health services in the last six months. The number of IST-committed individuals with fifteen or more prior arrests jumped from 18% in 2009 to 45% by 2015. The data “really began to tell a story of the cycle of criminalization,” Clendenin said.

“Building more state hospital beds is only going to exacerbate the problem long-term,” she emphasized. “We’re just creating opportunities for individuals to be committed as IST rather than addressing the front-end challenge that is contributing to this trend.”

Why are states like California plowing ahead with renovating and expanding state hospital capacity, ignoring the guidance of their own experts and administrators? The following case example may serve as an illustration of how research can be manipulated and politicized to keep the bed shortage myth alive, while obscuring root causes and appropriate solutions.

Anatomy of a misrepresentation

A 2020 survey of jurisdictions conducted by current medical director for California’s Department of State Hospitals, Katherine Warburton et al, was among the first systematic attempts to discern the root causes of the surge in IST commitments nationally. The survey found that 82 percent of states reported an increase in competency referrals.

When asked to rank what they saw as the drivers of the surge, agencies’ answers were revealing. The highest ranked response was not a bed shortage but “inadequate general mental health services in the community.” Respondents ranked inadequate crisis services second. A shortage of inpatient psychiatric beds was ranked third, followed by a lack of assertive community treatment services. In other words, three of the four drivers of the competency crisis were identified as gaps in community-based care and support, not institutional beds.

Warburton et al reached an unequivocal conclusion: “The opinion data indicate that expanding state hospital capacity is not a remedy to the problem.”

Treatment Advocacy Center took these findings and massaged them to promote bed expansion. On the bed shortages section of their website, the Warburton et al survey is cited in a misleading fashion: “State officials identified a shortage of community mental health services, crisis services, and psychiatric beds as the biggest contributors to the rising need for competency evaluations.” The text as written places all of the drivers on equal footing, omitting the researchers’ ranking methodology and their primary conclusion.

TAC’s bed shortages page links to the #ABedInstead campaign, which encourages advocates to sign a pledge to support an increase in hospital beds. This is ostensibly to be achieved through one of TAC’s long-term policy priorities: The repeal of the IMD exclusion, a 1965 Medicaid rule which sought to leverage federal funding to disincentivize institutional care and to encourage community care expansion. The sought-after repeal has been occurring piecemeal via CMS Section 1115 demonstration waivers funding states to increase their bed capacity.

In 2019, TAC celebrated these waivers as “the beginning of the end of federal discriminatory policy.” The oft-repeated hypothesis was that IMD demonstration waivers would help relieve the various bottlenecks supposedly created by the bed shortage.

But data from waiver beneficiary states seems to validate experts’ warnings that more beds won’t resolve the crisis. Competency restoration referrals and waitlists have continued to grow at alarming rates in states with years of IMD demonstration funding in place. In Oklahoma, the waitlist exploded by 58 percent between December 2025 and January 2026 alone. Missouri’s list has more than doubled since July 2023, reaching an all-time high in January of this year.

Washington state has been massively expanding forensic hospital capacity by hundreds of beds, yet the state’s own forecast shows an unrelenting increase in the forensic hospital census through 2031, driven by “projected criminalization trends.”

Lawsuits and legislation force halting reforms

Over the last decade, class-action lawsuits have attempted, with varying degrees of success, to force systemic change in competency restoration. In 2014, Disability Rights Washington and the Washington ACLU filed Trueblood et al vs Washington State DSHS, one of the first such lawsuits to challenge unconstitutional delays in accessing competency restoration services.

The case argued that the delays, often occurring in jails and under conditions of solitary confinement, violated the Fourteenth Amendment due process rights of disabled people. A federal court ruled in 2015 that Washington must provide evaluations within 14 days and restoration services within 7 days. But the state has repeatedly failed to comply with the ruling. It has been found in contempt three times, accumulating hundreds of millions of dollars in fines. A 2018 settlement agreement required systemic reforms, including the expansion of community-based services and diversion programs. Trueblood remains active, with the court finding the state in breach of the agreement as recently as 2023.

Other reforms resulting from class action lawsuits have focused on jail-based competency restoration, or JBCR, sometimes creating dedicated jail units for those requiring restoration services. A key example is California’s Department of State Hospitals’ Early Access and Stabilization Services (EASS) program. In a scathing 2025 investigative report, A Half-Measure Solution to a Long-Standing Crisis, Disability Rights California noted that DSH has invested over $500 million to implement EASS in nearly every county, enrolling over 5,000 individuals. Despite massive investment and rollout, DRC’s investigation found less than a five percent restoration rate, rampant use of solitary confinement, and probable cause that some EASS participants have been subject to neglect.

The report documents numerous human rights violations like the use of locked “treatment modules” or single person-sized cages, restraint and handcuffing defendants to chairs, and the provision of non-confidential “treatment” with jail deputies present.

DRC notes that over the past ten years, the number of people with psychiatric disabilities charged with felonies has grown substantially, and predicts that felony referrals to IST will only increase in the years to come, due to “state and national policy changes that threaten access to community-based mental health services, among other factors.”

In Massachusetts, forensic-related admissions account for at least 80% of the continuing care beds, Fleischner told Mad in America, creating the same bottlenecks that prevent access by other patients waiting to access inpatient care.

“The call is always, ‘We need more beds.’ And that’s not the answer,” Fleischner said. “You need to find another way to deal with the people in the criminal justice system who don’t need to be in a hospital. Then you free up beds, and you don’t need more beds.”

Fleischner and other legal advocates with the Mental Health Legal Advisors Committee and the Massachusetts Association for Mental Health have lent their support to H.1652, a competency restoration reform bill introduced last year by state Reps. Marjorie Decker and Estela Reyes.

In a fact sheet, the Massachusetts Association for Mental Health (MAMH) and the Mental Health Legal Advisors’ Committee (MHLAC) outline various elements of the legislation, including a data analysis provision to try to better understand the full scope of the crisis.

1. 1652 also proposes to create a program of forensic navigators within the Department of Mental Health. This specialized support role, which has been a part of reforms in Washington State and elsewhere, is meant to assist and expedite those facing the competency and criminal responsibility determination processes, while protecting their individual rights.

The bill also proposes to study the global justice intermediary approach, grounded in a human rights framework, that trains community volunteers to assist individuals with disabilities or other vulnerabilities with access and communication before and during court proceedings.

While H. 1652 is stuck in committee this legislative session, Fleischner is optimistic about its future movement. “We’ve had a lot of suggestions for redrafting” from allies, he said, and that the bill will be revised and resubmitted next session.

Community integration and housing: ‘unstated issues’ driving the competency crisis

When asked about the NRI report on expansion of state hospital bed capacity, former SAMHSA official del Vecchio complicated the organization’s analysis. While he agreed that the surge in IST referrals is contributing to the crisis, he identified a larger, often unstated issue: “States lack housing, which creates these bottlenecks,” he shared with Mad in America via email.

“They [state agency respondents] don’t want to say that as it would violate Olmstead, so instead they point to IST,” del Vecchio continued, referring to the community integration mandate of the 1999 US Supreme Court Olmstead vs. LC decision, which requires public entities to provide community-based services and housing for people with disabilities, rather than to force them into unnecessary institutional segregation.

Fleischner agreed about the central role of housing, referencing a project he is currently collaborating on for MAMH. “We’ve interviewed 40 or 50 stakeholders in this system,” he told Mad in America. “Virtually everyone we talk to, when you ask, ‘What’s the biggest problem facing the mental health system?’ everyone says, ‘housing.’”

On July 10, Congress passed a bipartisan bill aimed at alleviating the housing affordability crisis, which Trump refused to sign (although he did not veto it) calling the bill a “big yawn.” But Federal policy is seeking to shift funding away from permanent supportive housing programs like Housing First that are expressly designed for disabled people, unhoused people, and people who use drugs—those most likely to experience criminalization and be funneled into “competency purgatory.”

Olmstead’s community living mandate is directly under attack today, as  in a slip opinion memo issued by the DOJ in June, which seems to be laying the groundwork for re-institutionalization. The slip opinion has been vociferously condemned by U.S. disability rights and civil rights organizations.

“Let us refuse this administration’s determination to stop our voices, and to put us away,” wrote the Disability Rights and Education Fund (DREDF) in a statement.

Liat Ben-Moshe has identified the construction of the “homeless mentally ill” as a social category that deflects from systemic injustices, writing presciently in 2017: “When the source of housing insecurity is psychiatrized/medicalized (whether it is due to mental illness or addiction), the solution is also perceived to reside within the individual and become service-oriented with therapeutic interventions, most extreme of which are calling for reinstitutionalization and a “return to the asylum.”

She cites the scholarship of cultural studies scholar Craig Willse, who also writes about how the entwined criminalization and pathologization of poverty serves to divert attention from root causes: “What to do with the homeless, rather than what to do about housing, has become the obsession of government policy, social service practice and signal scientific inquiry.”

The racial-criminal-pathologizing of unhoused people also happens to big business. While private psychiatric hospitals tend to avoid competency restoration, there are plenty of private equity actors who are more than happy to contract with overwhelmed state agencies to help them solve their competency crises. They often do this by running outpatient restoration, jail-based competency restoration, or even whole forensic psychiatric prisons.

Qui bono? / Who profits?

Private equity’s model, which has been characterized as termite capitalism, has already done tremendous damage as it runs through US healthcare and services largely unchecked. PE has also turned competency restoration into a multi-billion dollar industry.

In 2018, the private equity firm H.I.G. Capital acquired the prison healthcare giant Correct Care Solutions and merged it with a competitor it already owned to create Wellpath. The new company quickly became one of the nation’s largest for-profit prison healthcare providers, expanding rapidly to generate over $2 billion in annual revenue.

With great profit came great harm. During its tenure, Wellpath was named as a defendant in more than 1,500 lawsuits alleging inadequate medical care, patient deaths, and neglect. The company accumulated $644 million in debt, much of it as a result of the legal settlements.

In November 2024, the company filed for Chapter 11 bankruptcy. Bankruptcy led to a restructuring of the business that critics, including Senator Elizabeth Warren (D-MA) say allowed it to evade corporate responsibility for wrongdoing.  Analysis in The Appeal found the bankruptcy halted more than a thousand pending cases against Wellpath, “many by people who say they were harmed by the company’s medical abuse and neglect.”

Wellpath sold its behavioral health division Recovery Solutions to its lenders, which then emerged from the ashes as a standalone company in January 2025, free from much of its prior debt and positioned for growth. Today the company “zeros in on contracting with and managing government-backed behavioral health facilities and services,” according to Behavioral Health Business. It runs a host of jail-based restoration programs in Colorado, Georgia, North Carolina, and Nevada, among other states; and administers California’s massive EASS program. It also operates state forensic hospitals in Florida and Texas, and holds a $92 million annual contract to run Bridgewater State Hospital, a psychiatric prison in Massachusetts. In a damning 2026 report on Bridgewater, the Disability Law Center exposes how Recovery Solutions has persisted in the same staffing and inhumane practices as its parent company, Wellpath.

The business model thrives on the “captive market” principle, whereby incarcerated people cannot choose their providers and cannot exit the market. Prison healthcare companies typically receive a fixed per diem payment per patient, guaranteed by lucrative contracts with state governments. Private equity companies can maximize their revenue specifically by denying or delaying care and services.

While there have been years of proposals to transfer the ownership of Bridgewater from DOC to DMH, they have never gained traction. As Tatum Pritchard, director of litigation with Massachusetts’ Disability Law Center told The Boston Globe, “There are few companies nationally with the capacity or expertise to provide care for a facility like Bridgewater, leaving the state with few alternatives to Recovery Solutions.” This kind of dependency makes it difficult for states to replace the company, even when its performance is abysmal or even dangerous.

Public records show that Recovery Solutions and its related entities have registered lobbyists in states including Texas, Rhode Island, and North Carolina. They have made substantial political contributions, particularly in Florida. The lobbying engine of a corporate entity profiting from criminalization and the deepening of IST infrastructure over expert objections, creates a heavy force mitigating against meaningful reform.

“It’s all a frightening scenario with the potential for even greater perverse financial incentives if the IMD exclusion is lifted and states and PE rush in to drink from the public trough and line their pockets,” del Vecchio told Mad in America.

In the immediate term, he thought prospects of a full repeal seemed slim. “One good thing about a dysfunctional Congress is it will be a challenge to see IMD move in this session,” he wrote. “The costs to Medicaid … will be a major deterrent, particularly when they have to pay for his war [on Iran].”

A novel Olmstead class action lawsuit launches in New York

As the DOJ openly attacks Olmstead’s community integration mandate, a new legal challenge in New York state is employing a novel strategy invoking the landmark 1999 Supreme Court decision. The Legal Aid Society of New York filed a class action lawsuit in August 2025, asking a federal court to apply Olmstead’s community integration mandate to force the state to overhaul its competency restoration procedures.

“On any given day,” the complaint reads, “approximately 100 individuals are held on Rikers Island despite being ordered by a criminal court into the custody of the New York State Office of Mental Health (“OMH”) to receive competency restoration services after being found unfit to stand trial.”

The complaint alleges that OMH has “routinely flouted” the orders of criminal courts, “refusing to accept custody of individuals ordered into their care” and “ignoring the urgency of these individuals’ treatment needs, for months on end.”

According to the complaint, the plaintiffs in the lawsuit are two New York City residents with psychiatric disabilities on IST referrals who are trapped in “legal limbo” in Rikers’ notoriously brutal jail system: “They remain incarcerated at Rikers Island, where they are not receiving treatment and are exposed to harmful conditions…”

OMH’s “chronic failures” to provide timely care and services, the lawsuit asserts, create “grave danger” for people with psychiatric disabilities and in particular, those found incompetent to stand trial. This severe harm includes prolonged periods of solitary confinement, or “deadlock.”

“Despite criminal court findings that they are unfit to stand trial and require treatment,” the complaint notes, the plaintiffs faced monthslong OMH waitlists for secure hospital beds, “without conducting any assessment of whether they could safely receive treatment in a more integrated, community-based setting.”

The lawsuit spotlights OMH’s failure to invest in the infrastructure necessary for timely access to restoration services. “Despite tracking increasing delays for years, OMH has not expanded outpatient options, adopted standards to identify those eligible for community-based treatment, or increased access to non-secure psychiatric facilities,” the complaint states, noting the agency’s overreliance on “overcrowded, understaffed secure forensic hospitals, all operating at or near capacity” while outpatient restoration is “woefully” underutilized. This is especially true for Black and Brown New Yorkers, where such outcomes are driven by structural racism, the complaint said.

This past February, OMH tried to get the class action lawsuit dropped, but a federal judge denied the state’s motion to dismiss, allowing the Olmstead claims to proceed.

Elena Landriscina, supervising attorney with the Legal Aid Society’s Special Litigation Unit, told Mad in America via phone call that if successful, the lawsuit’s implications could extend beyond New York: “A favorable ruling could help successive litigation within the [United States Court of Appeals for the] Second Circuit and elsewhere.”

Specifically, she said, the aspiration is that states develop community-based services. outpatient restoration programming. “It may not be enough to just build a treatment program—people may need other services and supports in order to get there,” Landriscina said, noting the high percentage of clients who are unstably housed.

The heart of this case, she added, is making sure that “people receive timely care and people who can remain in the community have the foundation to do so successfully.” From a disability justice perspective, this would be the more impactful relief, Landriscina said.

The competency crisis illuminates that we are at a critical crossroads, where diametrically opposed visions for America’s future—community integration versus reinstitutionalization—battle it out in courts and state legislatures. While the DOJ’s June memo signals that Olmstead is in its crosshairs, at this writing community living still remains the law of the land. What unfolds in the months and years to come will determine whether the integration mandate survives, or if the moral panic around psychiatric bed shortages propels a continued institutional expansion at the expense of community care and housing.

The post How the Moral Panic on Psychiatric Bed Shortages is Fueling a ‘Competency Crisis’ in the U.S. appeared first on Mad In America.

 

IPAK-EDU is grateful to Mad In America as this piece was originally published there and is included in this news feed with mutual agreement. Read More