Other Residential Care Facilities (U.S.) — NAICS 62399

A Histometrics industry primer for public-market and private investors

Short primer — single-child level. In the North American Industry Classification System (NAICS), the 5-digit industry 62399 contains exactly one 6-digit national industry, 623990, and the two are effectively identical in scope, size, and economics. This page gives the 62399-level figures and orientation; for the full treatment — investable universe, per-diem economics, regulation, consolidation, and how to invest — see the 623990 primer.

1. Overview

NAICS 62399 — "Other Residential Care Facilities" — is the catch-all layer for round-the-clock residential care that doesn't fit the residential-care family's more specialized boxes. It covers places where people live and receive supervision and personal care but not skilled nursing or a hospital-level medical program: youth group homes, group foster homes, orphanages and children's homes, homes for unwed mothers, halfway houses for delinquents and ex-offenders, non-correctional "boot"/disciplinary camps for at-risk youth, and group homes for disabled people who need help but not nursing [1].

For an investor, the headline is the same at this level as at the child: a small, deeply fragmented, and overwhelmingly government-funded corner of the care economy — roughly $9.2 billion in measured private receipts [2], funded almost entirely by Medicaid, federal foster-care dollars (Title IV-E of the Social Security Act), and state and county child-welfare and juvenile-justice contracts. Demand is durable; revenue is rate-capped, politically exposed, and lately under intense abuse-and-neglect scrutiny.

2. What's inside — and why this level equals its one child

NAICS is a nested hierarchy: sector (2-digit) → subsector (3-digit) → industry group (4-digit) → industry (5-digit) → national industry (6-digit). Most 5-digit industries split into several 6-digit children. 62399 is not one of them — it has a single child, 623990, so the 5-digit and 6-digit lines describe the same set of establishments. There is no aggregation happening here: no sibling industries to sum, no cross-child mix to weigh. The 62399 rollup figure is the 623990 figure.

That is why this page is deliberately short. Everything substantive about the industry — its scope, its exclusions (residential intellectual/developmental-disability care → 623210; residential mental-health and substance-abuse care → 623220; assisted living → 623312; skilled nursing → 623110; emergency shelters → 624221; private prisons → 561210), its operators, and its economics — is documented once, in the 623990 primer [1].

3. Size (this level's figures)

Federal statistics for NAICS 62399 (our ground-truth figures). Because the level has one child, these equal the 623990 totals.

Two quick reads: payroll (~$5.2 billion) is more than half of receipts (~$9.2 billion), confirming a labor business, not a capital-intensive one; and the average establishment has about 20 employees (118,478 ÷ 5,988), i.e. mostly small group homes rather than large institutions. The average firm books only about $2.5 million in receipts — well under the U.S. Small Business Administration's (SBA) $16 million small-business size standard for this code [4].

Undercount caveat. County Business Patterns covers only establishments with paid employees; it excludes the self-employed, nonemployer businesses, and most government employment [5]. The Economic Census generally excludes government-owned establishments even when their activity mirrors a covered private industry [6]. So government-run juvenile group homes and public children's homes sit outside these totals, and paid individual foster families — who aren't "establishments" at all — are outside scope entirely. The societal spend on housing these populations is materially larger than $9.2 billion; the Herfindahl-Hirschman Index (HHI, the standard market-concentration measure) is suppressed in the federal data for this code, so no value is stated [2]. Do not stitch these numbers into a single margin: receipts and concentration are 2022 Economic Census, payroll and employment are 2023 County Business Patterns, and payroll is not revenue [2][3].

4. Investable universe (where value concentrates)

With one child, value concentrates exactly where it does in 623990: there is no pure-play public company whose reported revenue maps cleanly to this code. Listed exposure is indirect and small — residential-reentry (halfway-house) segments inside prison operators GEO Group (GEO) and CoreCivic (CXW), and youth residential beds inside behavioral-health chains Acadia Healthcare (ACHC) and Universal Health Services (UHS) that mostly sit in adjacent NAICS codes [9][11][12][13]. The real operators are private: nonprofits (Boys Town, Devereux) and government run most of it, with for-profit — increasingly private-equity-backed — roll-ups (Sevita, Embark Behavioral Health, Family Help & Wellness) owning the rest [15][16][18][24][25]. See the 623990 primer for the full company-by-company map.

5. How the money works

Owners earn like a hotel with a captive, publicly-funded clientele: revenue = licensed beds × occupancy (census) × per-diem rate, minus a labor-heavy cost base. Almost all revenue is public (Medicaid, including the children's EPSDT benefit — Early and Periodic Screening, Diagnostic and Treatment; Title IV-E; and state/county contracts). The per-diem gradient is the whole game: a child in an ordinary foster home draws roughly ~$30/day, but the same child in a residential treatment center can draw ~$275 to more than $800/day [8][17]. Because payroll exceeds half of receipts [2][3], profitability turns on two levers — labor cost and census — and administratively set rates mean operators can't simply raise prices to cover wage inflation. Full detail (metrics, cost structure, nonprofit vs. for-profit) is in the 623990 primer.

6. Demand drivers

The same forces apply as for the child: a shortage of foster families that pushes systems toward congregate care ; the youth behavioral-health crisis [12]; Medicaid's tilt toward community living [21]; Medicaid rate adequacy and state budgets [21][25]; and child-welfare/juvenile-justice caseloads and policy. The Family First Prevention Services Act of 2018 (FFPSA) cut off federal Title IV-E reimbursement after 14 days for group placements that aren't an accredited Qualified Residential Treatment Program (QRTP) [19][20] — yet the congregate-foster population has held around 40,000, so underlying need is sticky and relatively defensive [20].

7. Regulation

A heavily regulated, license-gated business with a rising regulatory temperature. There is no single national license: state licensing is the license to exist and can be suspended or revoked; federal funding rules (Title IV-E, FFPSA/QRTP, Medicaid EPSDT, and Home- and Community-Based Services standards from the Centers for Medicare & Medicaid Services, CMS) shape the economics [19][21][25]; and oversight scrutiny is intense — the U.S. Senate Finance Committee's June 2024 "Warehouses of Neglect" investigation and a subsequent Department of Justice (DOJ) referral put the for-profit model under direct pressure [23][24]. Full regulatory detail lives in the 623990 primer.

8. Consolidation

Extraordinarily fragmented: the largest four firms hold just 6.3% of revenue, the top eight 9%, the top 20 15.3%, and even the top 50 only 25.8% [2] — a textbook roll-up-ready structure with 3,601 firms and no dominant player. Competition is fundamentally local (licenses, referrals, staff, contracts, community acceptance), while private-equity buyers consolidate for scale economics and per-diem arbitrage. The result is a barbell: a stable nonprofit/government core, a churn of small local operators, and an aggressive for-profit consolidation layer drawing most of the capital and most of the criticism [8][18][7].

9. Risks

Identical to the child's: reimbursement risk (administratively set Medicaid/Title IV-E rates, FFPSA funding limits, 2025 Medicaid tightening) [19][25][25]; labor risk (a chronic direct-care worker shortage, with pay effectively capped by Medicaid rates) [26]; quality/safety/litigation risk (abuse, restraints, license loss — which can also strand the underlying real estate) [8][23]; occupancy/policy-shift risk; referral and payer concentration; leverage risk from PE ownership and sale-leasebacks; and acute ESG and headline risk in one of the most reputationally charged corners of the care economy [8][7].

10. How to invest & outlook

Public markets offer no clean entry — use listed names (GEO, CXW, ACHC, UHS) only as exposure to selected subsegments, valuing the relevant segment on enterprise value to EBITDA (earnings before interest, taxes, depreciation, and amortization), free-cash-flow yield, leverage, and payer mix rather than treating diversified revenue as 623990 exposure [9][11][12][13]. Private markets are where the industry actually is: acquiring or building licensed multi-site platforms, private credit against contracted cash flows, owning the real estate leased to a licensed operator, or supplying staffing/compliance technology [8][18].

Outlook: demand is structurally durable but revenue is rate-capped while costs are squeezed by a direct-care labor shortage; escalating oversight raises compliance cost and regulatory risk for the for-profit model even as capital keeps flowing into roll-ups. Returns will be highly operator-specific. Because 62399 and 623990 are the same industry, this outlook is the child's outlook — for the complete analysis, read the 623990 primer.

---

Sources

1. U.S. Census Bureau, 2022 NAICS Definition — 623990 Other Residential Care Facilities (definition, illustrative examples, cross-references), 2022. https://www.census.gov/naics/?chart=2022&details=623990&input=623990
2. U.S. Census Bureau, 2022 Economic Census — receipts, firm counts, and concentration ratios (CR4/CR8/CR20/CR50; HHI suppressed), NAICS 623990, 2022. https://api.census.gov/data/2022/ecnsize.html
3. U.S. Census Bureau, County Business Patterns: 2023 — establishments, employment, annual and first-quarter payroll, NAICS 623990, 2023. https://www.census.gov/data/datasets/2023/econ/cbp/2023-cbp.html
4. U.S. Small Business Administration, Table of Size Standards, 2023. https://www.sba.gov/document/support-table-size-standards
5. U.S. Census Bureau, County Business Patterns Methodology (coverage; excludes nonemployers and most government), 2026. https://www.census.gov/programs-surveys/cbp/technical-documentation/methodology.html
6. U.S. Census Bureau, Understanding NAICS (Economic Census exclusion of government-owned establishments), 2022. https://www.census.gov/programs-surveys/economic-census/year/2022/guidance/understanding-naics.html
7. Private Equity Stakeholder Project, The Kids Are Not Alright: How Private Equity Profits Off of Behavioral Health Services for Vulnerable and At-Risk Youth, 2022. https://pestakeholder.org/reports/the-kids-are-not-alright-how-private-equity-profits-off-of-behavioral-health-services-for-vulnerable-and-at-risk-youth/
8. Wikipedia, GEO Group (GEO Care / youth-services divestiture to Abraxas), 2025. https://en.wikipedia.org/wiki/GEO_Group
9. CoreCivic, Inc., Form 10-K / 2024 Annual Report — CoreCivic Community segment (reentry centers, beds, occupancy, revenue), 2024. https://www.sec.gov/Archives/edgar/data/1070985/000114036125011095/ny20038715x3_ars.pdf
10. Acadia Healthcare Company, Form 10-K for Fiscal Year 2025 (277 behavioral-health facilities, 12,500+ beds), 2026. https://www.sec.gov/Archives/edgar/data/1520697/000119312526078266/achc-20251231.htm
11. Universal Health Services, Form 10-K for Fiscal Year 2025, 2026. https://www.sec.gov/Archives/edgar/data/352915/000119312526071676/uhs-20251231.htm
12. Boys Town, About Boys Town and Residential Care, 2025. https://www.boystown.org/about
13. Wikipedia, Devereux Foundation (total revenue ~$494 million, 2024), 2025. https://en.wikipedia.org/wiki/Devereux_Foundation
14. Unsilenced, The Troubled Teen Industry — What Is TTI? (Sequel revenue, per-diem rates, public-funding share), 2025. https://www.unsilenced.org/the-industry/
15. Stateline, Private equity snaps up disability services, challenging state regulators (Sevita/National Mentor ownership and scale), 2025. https://stateline.org/2025/05/16/private-equity-snaps-up-disability-services-challenging-state-regulators/
16. Behavioral Health Business, Consonance Capital Partners Acquires Majority Stake in Youth-Focused Embark Behavioral Health, 2023. https://bhbusiness.com/2023/02/09/consonance-capital-partners-acquires-majority-stake-in-youth-focused-embark-behavioral-health/
17. Associated Press, Adopted and Locked Away: Kids Promised "Forever Homes" Instead Confined in For-Profit Institutions (Family Help & Wellness), 2026. https://apnews.com/
18. Child Trends, The Number of Older Youth in Congregate Foster Care Decreased in 2024, 2025. https://www.childtrends.org/publications/older-youth-congregate-foster-care-decreased-2024
19. Congressional Research Service, Family First Prevention Services Act, Insight IN10858. https://www.congress.gov/crs-product/IN10858
20. Child Welfare Monitor, Surprise, surprise! Family First has not reduced the use of congregate care! (congregate population held ~40,000; QRTP 14-day rule), 2026. https://childwelfaremonitor.org/2026/03/24/surprise-surprise-family-first-has-not-reduced-the-use-of-congregate-care/
21. Centers for Medicare & Medicaid Services, Home and Community-Based Services Provisions / 2024 Medicaid Access Final Rule, 2024. https://www.medicaid.gov/medicaid/access-care/home-and-community-based-services-provisions
22. Centers for Medicare & Medicaid Services, Home and Community-Based Services Quality Measure Set (reporting beginning 2028), 2026. https://www.medicaid.gov/medicaid/quality-of-care/quality-improvement/measuring-and-improving-quality-home-and-community-based-services
23. U.S. Senate Committee on Finance, Wyden Investigation Exposes Systemic Taxpayer-Funded Child Abuse and Neglect in Youth Residential Treatment Facilities ("Warehouses of Neglect"), June 12, 2024. https://www.finance.senate.gov/chairmans-news/wyden-investigation-exposes-systemic-taxpayer-funded-child-abuse-and-neglect-in-youth-residential-treatment-facilities
24. U.S. Senate Committee on Finance, Wyden Asks DOJ to Investigate Medicaid Fraud by Youth Residential Treatment Facilities and Potential Civil Rights Violations by States, October 9, 2024. https://www.finance.senate.gov/chairmans-news/wyden-asks-doj-to-investigate-medicaid-fraud-by-youth-residential-treatment-facilities-and-potential-civil-rights-violations-by-states
25. KFF, Payment Rates for Medicaid Home Care Ahead of the 2025 Reconciliation Law, 2025. https://www.kff.org/medicaid/payment-rates-for-medicaid-home-care-ahead-of-the-2025-reconciliation-law/
26. Home Health Care News, For Patients With Intellectual And Developmental Disabilities, Access To HCBS Remains Grim (direct-care worker shortage; provider staffing survey), 2024. https://homehealthcarenews.com/2024/03/for-patients-with-intellectual-and-developmental-disabilities-access-to-hcbs-remains-grim/