Community Health Network and Lifepoint Behavioral Health broke ground Monday on a new 120-bed behavioral health hospital on Indianapolis' south side, a freestanding facility meant to treat people with complex mental health conditions using evidence-based therapies. The hospital, to be built at 8708 Shelby St., is one of two the joint venture plans for the Indianapolis area as part of a broader push to close what officials describe as a serious shortage of behavioral health services across central Indiana.
The groundbreaking, first reported by WISH-TV, marks the first facility to emerge from the joint venture between Indianapolis-based Community Health Network and Tennessee-based Lifepoint Behavioral Health. It follows an April 2025 announcement of a sister hospital planned for Westfield, where construction was targeted for early 2026 with an estimated 2027 opening, according to the same report. No expected opening date for the Shelby Street hospital has been announced.
Community Health Network describes itself as Indiana's largest provider of behavioral health services and says the new hospital will expand access to specialized behavioral health care for patients and families across central Indiana. Nicki Tessler said, per the station's report, that the hospital will be “a place for hope, healing and recovery for the Indianapolis community.” Once open, Community Fairbanks Behavioral Health Hospital South will join Lifepoint Behavioral Health's national network of 24 behavioral health facilities, with Lifepoint managing day-to-day operations, an arrangement WISH-TV notes was formalized when the joint venture was established.
A Local Treatment Gap Driving the Expansion
The project responds to a stark local statistic: a Community Mental Health Needs Assessment for Marion County, conducted by Indiana University's Center for Health Policy, found that two-thirds of Marion County residents suffering from serious mental illness did not receive treatment, according to Inside INdiana Business. The study supported the hospital expansion.
The joint venture itself was first announced as an intent in September 2024 before being formally established in February 2025 to build and operate two freestanding 120-bed inpatient facilities, according to Becker's Hospital Review. Community Health Network and Lifepoint Health are not new partners: the two already collaborate through Lifepoint Rehabilitation, which operates Community Rehabilitation Hospital North, a 60-bed, 63,000-square-foot facility in Indianapolis specializing in brain injury, stroke, and amputation rehabilitation.
Ownership and Corporate Context
Lifepoint Health is owned by New York-based private equity firm Apollo Global Management, which acquired Lifepoint in a $5.6 billion deal in 2018 and now holds majority joint venture stakes in 61% of its hospital facilities nationwide as of 2026, according to the Private Equity Stakeholder Project. Lifepoint relies heavily on joint ventures with nonprofit systems, including Ascension, Mercy Health, and Duke Health, the group notes.
The Community Fairbanks name traces back to July 2021, when Community Health Network fully integrated Fairbanks, a historic alcohol and drug treatment program founded in 1945, renaming its Indianapolis campus Community Fairbanks Recovery Center to merge addiction medicine with general behavioral healthcare, the health system has said.
Statewide Bed Shortage Behind the Bars and ERs
The new hospital arrives as Indiana's state-run psychiatric system buckles under a different pressure. Referrals for court-ordered competency restoration in Indiana state psychiatric hospitals surged 477% between 2013 and 2025, leaving forensic criminal defendants occupying roughly 70% of all state hospital beds by 2026, according to WFYI. State officials reported that 86% of new admissions to state psychiatric facilities were forensic cases in mid-2026, per the same report.
Indiana maintained fewer than 11 state psychiatric hospital beds per 100,000 residents in 2023, an 8% drop since 2016, keeping state facility occupancy at a median rate of 90% against a recommended maximum threshold of 85%, according to the Indianapolis Business Journal. Treatment Advocacy Center data cited in that report underscored the state's historic low in public psychiatric bed availability, a shortfall that leaves people in crisis backlogged in emergency rooms and county jails.
Indiana's last major state investment in psychiatric infrastructure came in 2019, when it opened the 159-bed NeuroDiagnostic Institute and Advanced Treatment Center in Indianapolis, the state's first newly constructed state psychiatric hospital since 1952, focused on adolescent, adult, and neuro-cognitive psychiatric care. Even with that facility and the new south side project, all 92 Indiana counties were designated federal mental health workforce shortage areas in 2024, contributing to an estimated more than $4 billion economic burden from untreated mental illness in 2019, WFYI reported. Research from Indiana University's Bowen Center, cited in that report, found that many licensed providers do not accept Medicaid, further limiting care access even where beds exist.
