The federal government is cutting off Medicare at the Texas Township psychiatric hospital on November 16. The state wants its license. Its Indiana owner has been cited for years. Patients from Michigan were being sent to that owner’s hospitals before this one was ever built. And its charts are sitting in custody files, probate files, and criminal cases right now.
The Centers for Medicare and Medicaid Services is terminating Kalamazoo Behavioral Health Hospital’s Medicare provider agreement effective November 16, 2026. CMS found the 64-bed psychiatric hospital out of compliance with five federal conditions of participation: patient’s rights, nursing services, physical environment, psychiatric medical records, and psychiatric staffing. Medicare will not pay for patients admitted on or after that date.
Michigan’s Department of Licensing and Regulatory Affairs has separately moved to revoke the hospital’s state license after investigating dozens of emergency transfers for falls, injuries, assaults, and patients found unresponsive. The hospital opened in late 2024. It is owned by NeuroPsychiatric Hospitals LLC of South Bend, Indiana, a chain whose Indiana hospitals have drawn federal “immediate jeopardy” findings, a state attempt to pull a license, and hundreds of complaints approved for investigation.
Is the hospital closed?
Not yet. A license revocation goes through an administrative hearing, and the hospital can keep operating while that runs. Medicare payment for new admissions ends November 16.
My family member is a patient there and on Medicare. What happens?
Patients admitted before November 16 may have up to 30 days of covered services after that date. Ask the hospital, in writing, for the discharge or transfer plan now.
Who owns it?
NeuroPsychiatric Hospitals LLC of South Bend, Indiana, listed in Medicare records as 100 percent owner.
Can the hospital get Medicare back?
It can request a hearing before an HHS administrative law judge, and it can later seek readmission to Medicare if it shows the problems are fixed and will not happen again.
My ex is using a stay there against me in custody. Now what?
Talk to your attorney about privilege first, then about the hospital itself. The federal and state findings go straight to whether that chart can be trusted.
What a Week
This one landed in my notifications twice in the same afternoon. First the WOOD TV8 post: Medicare yanks coverage at the embattled Kalamazoo Behavioral Health Hospital. Then a reader tagged me under it, saying he had been warning people about this place since before it broke ground, and pointing me to a Facebook group called Justice for NeuroPsychiatric Hospitals, run by people who have been documenting the parent company for years.
Kalamazoo Behavioral Health Hospital sits on South 9th Street in Texas Township, just south of I-94, a few miles from where a lot of us live. It was sold to this community as relief for a mental health system with too few beds. Two years after opening, the federal government will not pay for its care, and the state wants its license. Here is how it got here, and who runs it.
| Item | What the documents show |
|---|---|
| Facility | Kalamazoo Behavioral Health Hospital, 5802 S. 9th St., Texas Township; CMS Certification Number 234047 |
| Owner | NeuroPsychiatric Hospitals LLC, South Bend, Indiana, 100 percent per Medicare enrollment |
| Size | 64 beds; 31 Medicare-certified beds per the CMS Provider of Services file |
| Volume | 778 inpatient discharges from April 8 through December 31, 2025, per its Medicare cost report |
| Federal action | Medicare provider agreement terminated effective November 16, 2026 (notice dated October 30, 2026) |
| Conditions failed | 42 CFR 482.13, 482.23, 482.41, 482.61, 482.62 |
| State action | LARA notice of intent to revoke the hospital license; administrative hearing process pending |
| Hospital response | No public statement. WWMT reported the hospital’s PR firm had not replied, and WWMT also reported unanswered calls, emails, and voicemails to the CEO and parent company. |
What CMS Found
The termination notice is short and does not describe incidents. What it does is list the federal standards the hospital failed, and that list says plenty. The notice, signed by the acting branch manager for acute and continuing care in CMS’s Chicago office, is blunt about the money: “The Medicare program will not make payment for inpatient hospital services furnished to patients admitted on or after November 16, 2026.”
The five conditions cover nearly the whole job of a psychiatric hospital. Patient’s rights covers safety, freedom from abuse and harassment, and limits on restraint and seclusion. Nursing services covers whether there are enough qualified nurses to actually supervise patients. Physical environment covers whether the building is safe. The two psychiatric-specific conditions cover whether medical records document what was done for each patient and whether the hospital has the psychiatrists, nurses, and clinical staff a psychiatric hospital is required to have.
CMS does not cut off a hospital over a paperwork lapse. A Medicare termination comes after condition-level findings, the most serious tier short of immediate jeopardy, and after a hospital has had a chance to correct them. For a psychiatric hospital to fail staffing, nursing, and patient rights at the same time means the core of patient care was out of compliance.
Two Years of Warnings in State Files
The federal decision did not come out of nowhere. WOOD TV8 reviewed LARA files and found nine complaint investigations into the hospital between early 2025 and September 2026. Of the 13 inpatient psychiatric hospitals in West Michigan, only three had complaint investigations at all, and the next highest had two.
State investigators could not substantiate three of the nine complaints. They found supporting evidence for some of the most serious ones, including an assault on a patient at the end of January. More than a year passed before the next complaint was filed, but the incidents did not stop in between.
From January through May 2026, according to documents obtained by WWMT’s News Channel 3 I-Team, patients were taken from the hospital to another hospital at least 57 times. LARA investigated 43 of those transfers. The pace picked up in spring: 24 of the 43 came in April and May. In April, regulators described 10 transfers involving falls with injury and assault. In May, they described 14 more for falls, unexplained injuries, or patients found unresponsive. Regulators also found patients were not checked on as often as state rules require.
Kalamazoo County Consolidated Dispatch Authority records show 299 calls to the facility from January 2025 into October 2026, WWMT reported. Many were medical. Dozens were classified as assaults.
Then came the August 2026 complaint report. It found that a patient’s medically necessary diet was not followed, and the patient ended up hospitalized. It also found, in the investigators’ words, that “there is not a physician or psychiatrist available at this facility.” LARA concluded the hospital was not in compliance and ordered a corrective action plan within a week. The state rejected the plan the hospital sent back.
By the time CMS acted, Michigan regulators had documented a pattern for more than a year and a half: nine investigations, a confirmed assault, dozens of emergency transfers, missed patient checks, no physician or psychiatrist available during a site review, and a correction plan the state would not accept. The federal finding on staffing and nursing reads like a summary of the state’s own file.
The proposal
NeuroPsychiatric Hospitals files a certificate of need application with the state, under the name Medical Behavioral Hospital of Michigan LLC, for a $37.4 million hospital in Texas Township: 31 adult psychiatric beds and 33 beds for people with developmental disabilities. Crain’s Grand Rapids reports the company was responding to high volumes of Michigan patients referred to its Indiana hospitals.
Ground broken
The company announces it has broken ground on the 64-bed hospital and projects a summer 2023 opening. WWMT reports local mental health leaders describing waits of up to six months for a bed at the state-run Kalamazoo Psychiatric Hospital.
The doors open
The hospital opens more than a year behind its projected date. Its Medicare cost report begins April 8, 2025, and shows 778 discharges through the end of that year.
Patient A
A patient is assaulted at the facility. State investigators later substantiate the complaint. It is the first in a string of nine complaint investigations that run through September 2026.
At least 57 transfers out
Patients are sent to other hospitals at least 57 times. LARA investigates 43, including 10 in April for falls with injury and assault and 14 in May for falls, unexplained injuries, or patients found unresponsive.
State investigators on site
LARA visits the facility and later writes to CEO Tim Radabaugh laying out specific care failures, including patients not being checked as often as state rules require.
No physician, no psychiatrist
A complaint report finds no physician or psychiatrist available at the facility and a dietary failure that put a patient in the hospital. LARA orders a corrective action plan within a week, then rejects the plan it receives.
The state moves to revoke
News reports beginning October 13 confirm LARA has issued a notice of intent to revoke the hospital’s license. The hospital keeps operating while the administrative process runs.
CMS posts the termination notice
CMS publishes notice that the hospital fails five Medicare conditions of participation and that its provider agreement will end November 16.
Medicare stops paying
No Medicare payment for patients admitted on or after this date. Patients admitted earlier may be covered for up to 30 more days.
Before It Broke Ground
This hospital exists because Michigan patients were already leaving the state. When NeuroPsychiatric Hospitals filed its plans in October 2019, Crain’s Grand Rapids reported that an influx of patients referred to Indiana for inpatient mental health care had led the South Bend company to propose a Kalamazoo County site. WWMT reported at the time that a competing operator, Kalamazoo Psych Operator LLC, filed its own application for a 31-bed adult psychiatric hospital in the same business park.
Read that again from a family’s side. Before this building existed, people in psychiatric crisis in Southwest Michigan were being sent across the state line to this company’s Indiana hospitals. The Kalamazoo hospital was supposed to bring that care closer to home. It brought the same operator closer to home.
At least one Kalamazoo County resident says he warned publicly about this operator before construction began. Those warnings were posted where anyone could read them. By the time ground was broken in June 2022, the company’s Indiana history already included a 2013 federal and state citation at its first hospital, a 2017 state attempt to revoke its Indianapolis license, and a 2020 immediate jeopardy finding in Indianapolis after at least four patients died over four months.
Court records, FOIA requests, research databases, document access, technology and hundreds of hours of investigation make this work possible. Clutch Confidential is how readers who value that work can help sustain it, and get more from Clutch in return.
$10/month →The Owner’s Track Record in Indiana
NeuroPsychiatric Hospitals was founded by Cameron Gilbert in 2006 and runs hospitals in Indiana, Michigan, Texas, and Arizona, at least 400 beds in all, according to WFYI Public Media in Indianapolis. Its Medicare cost reports show more than $76 million in net patient revenue. WFYI reporter Farrah Anderson has spent the past year documenting the chain in two investigations, published in November 2025 and September 2026. What follows is drawn from that reporting and the inspection records it cites.
| Year | Facility | What happened |
|---|---|---|
| 2013 | Bremen, Ind. (first hospital) | CMS and the Indiana Department of Health cite lapses in care, record-keeping, and safety, including critical lab results left unreviewed for hours and missing medication records. A patient with an untreated infection was transferred and later died, likely of sepsis. |
| 2016 | Indianapolis | A former nurse practitioner files a federal False Claims Act complaint alleging a 14-day “holding policy” to maximize Medicare payments. The suit was later withdrawn. The company denies the allegations. |
| 2017 to 2020 | Indianapolis | State health officials try to revoke the hospital’s license. The company sues. The case ends in a 2020 settlement with undisclosed terms. |
| 2018 | Chain | The company sues Indiana Disability Rights after it seeks monitoring access. The case ends in a private settlement that bars the group from discussing it. |
| 2020 | Indianapolis | Federal inspectors issue an immediate jeopardy finding. At least four patients died during a four-month period. The order was lifted the day the hospital submitted a correction plan. |
| 2023 | Crown Point, Ind. | A 77-year-old patient with dementia is found with facial bruising, later found unresponsive, and dies after transfer. Inspectors find missing monitoring and intake records. |
| 2023 | Mishawaka, Ind. | Plan of correction requiring retraining on patient rights, fall prevention, and clinical assessment, plus added oversight of falls. |
| April 2025 | Crown Point, Ind. | Immediate jeopardy finding tied to an interim director of nursing allegedly putting hands on a patient’s throat during a restraint. |
| 2026 | Indianapolis | Immediate jeopardy finding over systemic medication problems, including two patients who did not receive insulin. Lifted the next day. |
| Since 2022 | Indiana hospitals | More than 400 allegations included in complaints approved by CMS for investigation, according to the Indiana Department of Health. |
The pattern in that table is not just the findings. It is how they ended. An immediate jeopardy order lifted the same day. Another lifted the next day. A license revocation settled in private. A disability rights watchdog’s access fight settled under terms it cannot discuss. WFYI found that Indiana’s 2020 settlement over the Indianapolis hospital required staffing, training, and outside monitoring for up to 15 months, and that the state agency responsible could not locate any monitoring records. Former staff told WFYI that after moving to other employers, they quietly stepped in to stop patient transfers to the chain.
The company’s position is that it changed. It told WFYI that a 2022 leadership change, with Jimmy Burroughs as CEO, made it a materially different organization, and that its Indiana hospitals averaged fewer deficiencies per inspection than other Indiana psychiatric hospitals. Its attorney, Michael McNally, said the new team made systemic improvements and that “nothing’s ever perfect.” It denies ever holding patients for financial reasons.
Kalamazoo Behavioral Health Hospital opened in late 2024, more than two years into that new leadership. Everything in Michigan’s file happened on its watch.
Indiana’s Rules, Michigan’s Patients
The Justice for NeuroPsychiatric Hospitals group, which runs the Expose NPH page, says its mission is a deep investigation into the chain, its investors, owners, and contractors, and reform of inpatient psychiatric care. Its central claim is that Indiana House Enrolled Act 1006 leaves psychiatric patients with fewer protections, and that Michigan patients are routinely sent into that system. The group’s characterization is its own. Here is what checks out.
Governor Eric Holcomb signed HEA 1006 on May 4, 2023, and it took effect July 1, 2023. It rewrote Indiana’s emergency and immediate detention law. Among the changes: a facility can hold and treat a person for 48 hours, excluding weekends and holidays, before filing for emergency detention with a court. Once a judge signs the application, the detention can run up to 14 days, again excluding weekends and holidays, up from the prior 10. Nurse practitioners and physician assistants can perform the examination behind a physician’s statement to the court. And facilities, physicians, and police get immunity for good-faith acts, short of gross negligence.
Indiana Disability Rights opposed the detention extension, warning it could raise the risk of abuse, WFYI reported. When the Senate committee heard the bill, numerous people with psychiatric diagnoses testified against it. Hospital, police, prosecutor, and judges’ associations testified for it. A 2025 Indiana Law Review note examined the due process problems with how long people can be held under Indiana’s emergency detention scheme before a hearing.
The cross-border piece holds. The company’s own 2019 expansion pitch rested on the volume of Michigan patients going to its Indiana hospitals, and WFYI reported that patients from other states are sometimes transferred to the chain because few alternatives exist. A Michigan resident admitted to an Indiana hospital is held under Indiana’s detention rules, not Michigan’s Mental Health Code, and the protections that come with Michigan’s recipient rights system do not follow them across the line.
Fourteen days, not counting weekends or holidays, is close to three calendar weeks. A former nurse practitioner alleged the chain told staff no one should be discharged before 14 days. Indiana then made 14 the legal limit.
What Happens to Patients Now
A Medicare termination is a payment decision, not a closure order. Medicare will not pay for anyone admitted on or after November 16. People admitted before that date may be covered for up to 30 more days. In practice, a psychiatric hospital that loses Medicare loses a large share of its patients, and commercial insurers often drop terminated hospitals from their networks, as Blue Cross Blue Shield of Illinois did after CMS moved to terminate a Chicago psychiatric hospital, ProPublica reported.
The hospital can ask for a hearing before an HHS administrative law judge. It can also reapply for Medicare later, but it has to give reasonable assurance that the reasons for termination are gone and will not come back. The state license fight runs separately, through an administrative hearing under the Michigan Public Health Code.
If your family member is inside right now, get the plan in writing. Ask who is paying after November 16, where the patient will go if they still need inpatient care, and which hospital they are being transferred to. If the answer is a hospital in Indiana, ask whether it is owned by the same company.
The Charts Don’t Leave With Medicare
Let’s be honest about where psychiatric records end up. They do not sit quietly in a filing cabinet. They get subpoenaed, requested, summarized, and read out loud in courtrooms. A hospital that discharged 778 people in its first nine months of Medicare billing has produced a lot of paper, and that paper is already sitting in custody files, probate files, and criminal cases.
Every one of those cases now has a new fact attached to it. The federal government looked at this hospital and found it failed 42 CFR 482.61, the condition that governs psychiatric medical records, alongside nursing, staffing, and patient rights. The state found patients were not checked as often as required and that no physician or psychiatrist was available during its review. If a chart from this building is being used against someone, those findings belong in the same conversation.
In Family Court
We need to stop waltzing around the elephant in the room. In a custody fight, a psychiatric admission gets used as a weapon. One parent’s hospitalization becomes Exhibit A for “unstable,” whether the stay lasted three days or three weeks, and whether the person walked in asking for help or was brought in by police.
Michigan’s Child Custody Act makes the mental and physical health of the parties one of the best interest factors a judge must weigh. That does not throw a parent’s psychiatric chart open to the other side. The Court of Appeals has held that a parent’s mental health records stay privileged unless that parent’s condition is actually placed in controversy, and that a parent’s mental health has to significantly affect their ability to parent before it carries weight. In July 2026, the court refused to let a trial judge pierce the Mental Health Code privilege just because counseling was tied to the custody case.
Child protective cases run on different rules. Under MCL 330.1748a, a CPS caseworker investigating abuse or neglect can request pertinent mental health records in writing, the provider has 14 days to release them, and the physician-patient and psychologist-patient privileges do not apply to what gets turned over. A Kalamazoo Behavioral Health Hospital chart can land in a caseworker’s file without the parent ever signing a release, and from there into a petition in family division.
If a chart from this hospital says a parent was combative, unresponsive, injured, or restrained, ask what was happening in the building that day. The state documented falls, assaults, unexplained injuries, and patients found unresponsive. A note that reads like proof of a parent’s instability can just as easily be proof of a hospital that was not watching its patients.
In Probate Court
Involuntary treatment in Kalamazoo County runs through the probate court on Gull Road, which asks anyone filing a mental health petition to contact Integrated Services of Kalamazoo first. A petition can be backed by clinical certificates, one of which must come from a psychiatrist when two are filed, and each must be signed within 72 hours of filing and after a personal examination. When the person is already in the hospital, the hospital director or an authorized representative can file the petition for continuing treatment.
That puts the hospital’s own paper at the center of the case. Michigan law requires the hearing within seven days, and the Court of Appeals has treated that deadline as mandatory. An initial order can authorize up to 60 days of hospitalization, up to 180 days of assisted outpatient treatment, or a combination capped at 60 hospital days. When an order includes hospital days, it goes to the Michigan State Police for entry in LEIN, where it follows the person long after discharge, into a custody case and into federal firearm eligibility.
So ask the obvious questions. Who signed the clinical certificate? Was that person a psychiatrist? Was a psychiatrist even on site the week the certificate was signed, given the state’s August finding? Was the person examined in person, inside the 72-hour window? A respondent’s attorney who walks into a Kalamazoo commitment hearing without the CMS notice and the LARA reports is leaving the best cross-examination material in the car.
Then there is the placement problem. With Medicare gone for new admissions and the license on the line, this hospital’s 64 beds are not a sure thing. Fewer beds in Kalamazoo County means more people ordered into treatment get sent farther away. Given how this company came to Michigan in the first place, farther away can mean Indiana, where Indiana’s detention clock and Indiana’s rules apply instead of ours.
In Criminal Court
The county 911 logs show dozens of calls classified as assaults at this facility. Some of those calls end with a patient in handcuffs. When a hospital that failed federal standards for nursing, staffing, and patient rights calls police on a patient in psychiatric crisis, the defense needs the CMS and LARA findings, because who was supposed to be supervising whom is part of the case.
The charts cut both ways. Defense attorneys use psychiatric records for competency, criminal responsibility, bond, and mitigation. Prosecutors use them to argue dangerousness. Either side leaning on a Kalamazoo Behavioral Health Hospital discharge summary should expect the other side to bring up the federal medical records finding. And patients who were assaulted inside that building are crime victims with rights of their own, whatever the hospital’s paperwork says about them.
How to Challenge the Chart
Hospital charts usually come into evidence as business records or as statements made for medical diagnosis and treatment. Michigan’s business records exception has a built-in escape hatch: a record does not come in that way when the source of the information or the way it was prepared shows a lack of trustworthiness. That is the opening. A federal finding that this hospital failed the psychiatric medical records standard is about as direct as trustworthiness evidence gets.
Here is the practical list. Get the patient’s complete chart, including nursing observation logs, restraint and seclusion documentation, incident reports, and physician orders; the Mental Health Code gives patients a right of access to their own records. Request the hospital’s federal Statement of Deficiencies, the CMS-2567, which spells out what surveyors actually found. Get the LARA complaint investigation reports and the notice of intent to revoke; LARA says those documents are available through a Freedom of Information Act request. Ask the hospital’s Office of Recipient Rights for any findings tied to the patient. Then line up the dates. If a nursing log shows observation checks every 15 minutes on a day the state says checks were not being done as required, that log has a problem.
One more thing to watch. If this hospital closes, Michigan requires a closing hospital to file a closure plan with LARA, and patient files have to go somewhere. Anyone with a case built on these charts should be asking now where they are going and who will be able to certify them later. This is not legal advice. Take this list to your attorney.
Where to Report
| Who | For what |
|---|---|
| LARA, Bureau of Community and Health Systems | Complaints about a licensed Michigan hospital. Non-Long Term Care State Licensing Section: 1-833-757-7308, LARA-BCHS-NLTCSLS@michigan.gov |
| Hospital Office of Recipient Rights | Michigan’s Mental Health Code requires licensed psychiatric hospitals to maintain a recipient rights office. Patients and families can file rights complaints there and ask for a copy of the findings. |
| Medicare | 1-800-MEDICARE for coverage questions about a stay at a terminated hospital, or to file a quality complaint |
| Disability Rights Michigan | Michigan’s protection and advocacy agency for people with disabilities, including mental illness: drmich.org |
| Kalamazoo County Probate Court | Mental health petitions and commitment orders. Gull Road Justice Complex, 1536 Gull Rd., Kalamazoo; (269) 383-8666 |
| Integrated Services of Kalamazoo | Kalamazoo County’s community mental health agency, which the probate court asks petitioners to contact first: (269) 373-6000 |
| Indiana Department of Health | Complaints about NeuroPsychiatric Hospitals’ Indiana facilities, which IDOH surveys for CMS |
| Justice for NeuroPsychiatric Hospitals | Public Facebook group run by Expose NPH, collecting patient and family accounts about the chain |
If you were a patient, family member, or employee at Kalamazoo Behavioral Health Hospital or any NeuroPsychiatric Hospitals facility, and you have records, transfer paperwork, or recipient rights findings, send them through the Clutch Intel Tip Portal.
Why This Matters Here
Southwest Michigan needed psychiatric beds. Nobody disputes that. Families were waiting months for the state hospital and watching relatives get shipped to Indiana. That need is exactly why the question of who gets to fill it matters so much. When the only open bed belongs to an operator with this history, families do not have a choice. They have a bed.
What gets me is that none of this was hidden. The Indiana citations were public. The death counts were public. The lawsuits were public. People like the reader who tagged me were posting warnings before anyone poured concrete. It still took nine state investigations, at least 57 trips out by ambulance or transport in five months, and a federal payment cutoff before anyone with power treated this as the emergency it was for the people inside.
The hospital may close. The company will still run hospitals in Indiana, Texas, and Arizona, and Michigan patients can still be sent to them. If you have a loved one in crisis, ask who owns the bed before you say yes to it.
Continue Your Investigation
If this reporting raised more questions, use the Clutch Justice ecosystem to keep going.
