Laurel Ridge Treatment Center, a Universal Health Services (NYSE: UHS) facility in San Antonio, Texas, will lay off 648 employees effective June 26.
The news comes nearly two weeks after the 330-bed psychiatric hospital received a notification from the Centers for Medicare & Medicaid Services (CMS) on April 15 that it would no longer receive federal payments for services provided to patients on or after April 30. CMS stated its decision to terminate the provider agreement was based on the facility’s failure to comply with health and safety requirements.
Laurel Ridge Treatment Center filed a civil complaint in response on April 23 in the U.S. District Court for the Western District of Texas, seeking emergency court protection from CMS cutting off its funding. Judge Jason K. Pulliam denied the temporary restraining order and preliminary injunction on April 28.
The layoffs were announced in an April 27 letter to employees. Behavioral Health Business obtained a copy of the official WARN notice verifying the layoffs directly from the Texas Workforce Commission.
At this time, BHB is still awaiting responses from Laurel Ridge Treatment Center and Universal Health Services. This story may be updated.
Federal inspections at the Laurel Ridge Treatment Center over the last several years have revealed multiple failures, including 10 health deficiencies related to patient health and safety as of the most recently available records from an inspection on August 21, 2025. That report also describes a specific incident in which a patient was able to self-harm with a blade that they brought into the facility.
Earlier that same year, in April 2025, Laurel Ridge was issued an immediate jeopardy citation – one of the most serious citations in violation of patient safety that a hospital can receive —“for not appropriately screening patients for contraband according to policy,” according to the report.
“Based on observation, interview and records review, the facility failed to provide to all patients an environmentally safe setting that protected the patient’s physical safety, securing or removing objects that are hazardous; as well as an environment that protected the patient’s emotional health and safety, including respect, dignity and comfort,” inspection documents from the immediate jeopardy warning state.
In 2025, three patients also died while under the facility’s care.
Universal Health’s stock was down 7.2% today following its first-quarter earnings call, where it reported a net revenue increase of 9.6% to nearly $4.5 billion during the first quarter of 2026.