On Monday, Corrections Corporation of America (CCA) announced it acquired four residential re-entry facilities from another private contractor for $13.5 million. According to a company press release, the re-entry facilities each have about 600 beds and were leased by Community Education Centers, Inc. (CEC) to the Pennsylvania Department of Corrections and the Philadelphia Prison System.

CEC is one of the country’s largest private re-entry service providers. The company’s website claims “CEC operates in 16 states and the Commonwealth of Bermuda and provides a full range of therapeutic residential and non-residential re-entry services with a documented record of reducing recidivism.”

However, CEC has come under fire in recent years for deplorable conditions as well as studies that showed inmates that spent time at their halfway houses actually had higher rates of recidivism, contrary to the company’s claims.

An SF Chronicle investigation this past April found a teenage boy died in one of the company’s juvenile justice camps in Utah after his urgent medical needs were left untreated for more than a week. Another inmate died of complications from her pregnancy after CEC staff delayed emergency medical care in Indiana. Inmates at a CEC halfway house in Colorado claimed drug use and gang violence ran rampant, and staff gave participants candy if they “pretended to participate in programs when officials walked through.”

CCA’s long track record of abuse and mismanagement does not inspire confidence that conditions will improve under their management. Yet the issues facing private residential re-entry, like its cousins in the rapidly growing “prisons without bars” industry, are not as much on the public’s radar as private prisons — where for-profit corrections companies face intense scrutiny over their treatment of inmates.

This negative public opinion combined with falling occupancy rates for private prisons seems to be motivating the industry to sink serious cash into diversifying to other private penal services. Politicians are now warming up to so-called “smart on crime” reforms like reducing mandatory minimum sentences for certain offenses. Those reforms would cut prison populations and undermine private prison profits — unless the companies can find ways to get paid as inmates are released.

That may be why in 2013, for example CCA acquired Correctional Alternatives, Inc. (CAI) — a “community corrections company” — for $36 million. CAI specialized in “work furloughs, residential reentry programs and home confinement for San Diego County, the Federal Bureau of Prisons (BOP) and United States Pretrial Services and Probation.” The company owned one 120-bed facility and controlled another a 483-bed facility through a long-term lease.

In January, GEO Group spent $415 million to acquire B.I. Inc., “a private provider of innovative compliance technologies, industry-leading monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers, and pretrial defendants.” The electronic monitoring company has faced criticism in recent years for harsh treatment towards immigrants.

GEO Group has also expanded into the inmate healthcare market with acquisitions of Just Care, Inc. and Cornell Companies.

Bob Libal, Executive Director of the prison reform group Grassroots Leadership, told me “policies that reduce mass incarceration are inherently bad for companies like CCA and GEO Group. That’s why these companies are trying to branch out into the re-entry, community corrections, and other rehabilitation services,” he said, adding that it was a “troubling trend for those of observers that have witnessed 30 years of the industry’s substandard and dangerous conditions in these companies facilities.”

A 2014 report on the emerging “treatment industrial complex” put out by Grassroots Leadership and the American Friends Service Committee found the shift away from private prisons “creates the potential for a dangerous trend of ‘net widening’ — placing more people on stricter forms of supervision than is necessary, for longer than is warranted.”

These diversification maneuvers may not signal a complete shift in the business model of these companies because their real bread and butter continues to be facility management. “Their core business model remains secure facility management, and both companies are heavily invested in immigration detention,” Alex Friedmann, Managing Editor at Prison Legal News, told me. “While CCA’s recent purchase of the re-entry facilities is indicative of continued interest in penetrating the community corrections market, CCA is still dependent on contracts to operate prisons and immigration detention facilities — particularly on the federal level.”