The Christian-based counselling program run by Mercy Ministries has been condemned by psychiatrists, who have labelled it cult-like and warned that it puts the lives of young women at risk.
"What an organisation like this is doing is quite high risk - high risk for the young women and high risk for these [Bible college] students to be taking on these complex cases," said Louise Newman, a professor of psychiatry at the University of Newcastle and a former director of the NSW Institute of Psychiatry.
"There is always the potential of self harm and possible suicidal behaviour."
Placing young women with mental health issues in an isolated house with little contact with their families or qualified medical and psychiatric care could exacerbate, rather than alleviate, their symptoms, she said.
"[It sounds] very similar to the - old psychiatric facilities that were isolated, disempowering places where people very rapidly lose their sense of identity, where the focus is compliance, there are high levels of surveillance and where contact with people close to them is limited."
Another concern was what appeared to be a complete lack of regulation of the Mercy Ministries' facilities.
"The same standards that apply to mental health services and mainstream medical services do not apply to these organisations," Professor Newman said.
People with mental illness had long been vulnerable to cult-like movements run under the guise of churches or religious groups such as Mercy Ministries, said Ian Hickie, the executive director of the Brain and Mind Research Institute at the University of Sydney.
"They are one of the groups most preyed upon by those fundamentalist religions. You have to worry about any group that takes in young women without review - the more secretive, the less open to review, the more likely abuse is to happen, that has been the repeated history of closed institutions and cult-like groups throughout the ages."
Professor Hickie said one of the most important developments in mental health services over the past two decades had been a move from religious-based counselling to evidence-based practice.
"Most of the non-government or community sector have moved very rapidly to a professional base, so while they maintain their core values they have also moved to make sure their services are scientifically based rather than religious-based."
Organisations purporting to provide health services had to be properly accredited, with qualified staff, safe facilities and regular reporting on the outcomes of those programs, he said. "The wish to do good is no longer enough; the serious possibility that you do harm also must be a consideration.
"Our modern community and church-based organisations do have to have a separation of church and state - they do not proselytise religion, it is not part of their professional practice. Prayer is not a medical treatment."
Any program that discouraged individual autonomy and encouraged a reliance on an organisation was dangerous, Professor Hickie said. "We are dealing with very vulnerable people and therefore the exploitation of those people and the exposure of these people to religious, political and social views has long been considered completely inappropriate.
"This cult-like behaviour has been demonstrated time and again to be counter-therapeutic, to do harm, because it makes the person less able to cope in the world, whereas the goal of all psychological therapies is to make it easier to cope in the world."