Nexus Family Healing, a nonprofit whose CEO earns more than $600,000 annually, won a multimillion-dollar Hennepin County contract to run a new youth mental health stabilization center in Minneapolis.
Now, state regulators have suspended operations at another of its psychiatric residential facilities after finding an “imminent risk of harm” to children.
The Minnesota Department of Human Services recently issued a temporary immediate suspension order against Nexus Family Healing’s East Bethel youth psychiatric residential treatment program.
The suspension is effective June 15 and bars the organization from providing children’s psychiatric residential treatment services at that site.
According to the DHS order, regulators cited multiple serious deficiencies: failure to protect residents’ basic rights, failure to report suspected maltreatment, unsafe medication administration, inadequate staffing and supervision, poor responses to safety risks, and insufficient monitoring of safety policies.
“This action is based on a determination that children served by your program are at an imminent risk of harm,” the DHS order states. “Because of these findings, DHS cannot ensure the health and safety of the children served by your program at this time.”
DHS licensing records show the East Bethel facility faced prior maltreatment investigative memorandums, correction orders, and fines dating back to 2024.
The suspension does not affect Nexus’s separate license for the Hennepin County Youth Stabilization Center in Minneapolis, which remains active.
Facility and contract background
The Hennepin County Youth Stabilization Center opened in December 2025 with 13 beds for youth ages 8-17, with stays of up to 30-45 days.
County officials promoted it as an alternative to emergency rooms, juvenile detention, or out-of-state placements.
In October 2024, the County Board approved a contract with Nexus worth roughly $7 million annually for three years — a potential $21 million commitment — despite an original allocated amount of $1 million. That was in addition to the county’s separate $20 million capital investment to build the facility.
Safety and oversight concerns
A Hennepin County Human Services employee, speaking on the condition of anonymity out of fear of retaliation, raised concerns about safety and oversight across Nexus facilities.
They alleged broader issues across Nexus facilities, including youth absconding and frequent hospital transfers — issues that were also recently cited by the East Bethel city administrator.
In March 2026, the Hennepin County Youth Stabilization Center itself received a fine for failing to complete a required background check on an employee with direct child contact.
Tax filings show Nexus Family Healing CEO and President Michelle Murray received $613,703 in compensation in 2024. CFO Scott McGuire received $432,381, with other top executives also earning high six-figure salaries.
“This is about whether Hennepin County followed proper procurement rules, whether taxpayer dollars are being responsibly managed, and whether warning signs were ignored while dramatically expanding funding to a provider with documented oversight issues,” the employee told Alpha News.
County defense
Hennepin County Commissioner Jeff Lunde defended the contract increase, noting the county originally expected state Medicaid reimbursement to offset costs after a 2023 reimbursement rate study.
When that did not materialize, the county adjusted the contract.
“We are missing $6 million a year for Medicaid reimbursement eligibility due to the delays in MN DHS acting. The missing $6 million is being covered by Hennepin County taxpayers as we wait,” Lunde said. “This is the price of mental health in Minnesota.”
Lunde defended the county’s authority to alter the contract.
“All of our RFPs (Request for Proposal) reserve the right for the county to amend, delete, reissue, change, and negotiate,” he said.
Alpha News asked Lunde about the optics of awarding the multimillion-dollar contract to Nexus while its CEO earns more than $600,000 annually.
“I can’t control executive pay,” Lunde said.
He added that the county has increased scrutiny of Nexus following the DHS action.
“We absolutely — if we hear things happening somewhere else, we investigate,” Lunde said. “We’re gonna take a deeper look.”
Lunde also defended maintaining full staffing and readiness for high-acuity youth even during lower occupancy periods.
A Hennepin County spokesperson echoed Lunde’s explanation for the cost increase, stating the original $1 million RFP figure assumed Medicaid reimbursement that never materialized. The spokesperson said Nexus was selected through a “structured, competitive process” and described the county funding as temporary “until the state has Medicaid funding in place.”
“We take stewardship of public funds very seriously, and we are confident that we have not paid for services that haven’t been provided,” the county said. As of April 30, 2026, the center had served 24 youth.
“We are in active, daily conversation with Nexus about services and operations at the Youth Stabilization Center,” the county added.
Statements from agencies and provider
The Minnesota Department of Human Services said the East Bethel facility housed 21 youth when the suspension was issued.
“Our priority is ensuring the safety, stability and appropriate treatment for these young people,” the agency said.
In a statement to Alpha News, Nexus Family Healing said it was “surprised” by the state’s temporary suspension order involving its East Bethel facility.
“We were surprised to receive notice of a temporary suspension of services at our East Bethel Psychiatric Residential Treatment Facility (PRTF). We take this action very seriously and appreciate that DHS has extended the notice from May 29 to June 6 to allow more time to transition youth,” the statement said.
“We are committed to working with DHS, as we always have, so that we can continue serving the youth at East Bethel, as we do not believe suspending services at this facility is in the best interest of the youth and families we serve. We value and respect the role of DHS and all regulatory and licensing organizations who partner with us to ensure youth safety.”
The organization also defended operations and costs associated with the Hennepin County Youth Stabilization Center.
“We can confirm that our management and operations costs for the Hennepin Youth Stabilization Center are consistent with those at high level care facilities, serving youth with significant mental and behavioral health needs,” Nexus said.
“Our contract costs were negotiated and finalized in partnership with the County. When a new program of this nature is launched, the occupancy increases over time as staff are hired and properly trained. We continue to hire and train to reach full capacity and are working closely with our partners at Hennepin County to meet the increasing demand.”
Alpha News asked Nexus whether any of the staffing, supervision or safety concerns identified by DHS at East Bethel were also present at the Youth Stabilization Center. The organization did not directly answer the question. Nexus has appealed the suspension of its East Bethel license.
Jenna Gloeb
Jenna Gloeb is an Edward R. Murrow Award-winning journalist, media producer, public speaker, and screenwriter. Most recently, she worked as a reporter and on-air host for CCX Media. Jenna is a Minnesota native and resides in the Twin Cities with her husband, son, daughter, and two dogs.
