The Supreme Court’s ruling today in Universal Health Services v. United States ex rel. Escobar preserves the ability of whistleblowers to bring claims under the False Claims Act (FCA) when government contractors, like Universal Health Services (UHS), lie by omission. Affirming the “implied false certification” theory of liability, the Court held that contractors can be liable when they bill the government for services while knowingly failing to disclose violations of statutory, regulatory, or contractual requirements that would be material to the government's decision about whether to pay those claims.
This case involves the tragic death of a teenage girl, Yarushka Rivera, while seeking mental health treatment from a UHS subsidiary in Massachusetts. The teen was allegedly treated by several unlicensed and unsupervised staff, including a nurse who held herself out as a psychiatrist and another staff member who claimed to be a psychologist despite having had her licensing application rejected by the state licensing authority. Yarushka’s parents filed suit as relators under the FCA after her death. They claim that UHS billed the Massachusetts Medicaid program for Yarushka’s care even though it was provided by unlicensed and inadequately supervised staff in violation of state law, and used billing codes and job title codes suggesting that the care had been performed by properly licensed and supervised caregivers.
Justice Thomas, writing for a unanimous court, explained that “by submitting claims for payment using payment codes that corresponded to specific counseling services” without disclosing UHS’s “many violations of basic staff and licensing requirements for mental health facilities, Universal Health’s claims constituted misrepresentations.”
SEIU Executive Vice President Leslie Frane said, “The Supreme Court’s unanimous block of industry attempts to limit fraud liability is critically important and a great victory for healthcare workers and patients who bravely step forward to blow the whistle on companies that break the law.” In partnership with The Judge David L. Bazelon Center for Mental Health Law and Mental Health America, SEIU submitted an amici curiae brief in support of the Relators which explained that this case was not an isolated incident, and advocated for the whistleblowers and patients who benefit from the FCA.
UHS is the largest provider of inpatient behavioral health care in the country, operating 1 out of every 5 psychiatric beds in the United States. The company owns almost 200 of the estimated 500 total freestanding behavioral health hospitals in the U.S.
In addition to the issues of unqualified and unsupervised staff raised in this fraud case, the company finds itself mired in three separate federal fraud investigations. In March of 2015, Universal Health Services revealed that it is under investigation as “a corporate entity” by the U.S. Department of Justice Criminal Fraud Section. Modern Healthcare reported that it is a “criminal investigation into whether the company fraudulently billed Medicare and Medicaid for behavioral health treatments.” Three of UHS’s behavioral facilities had already been under criminal investigation. One of those facilities — River Point Behavioral Health in Jacksonville, Fla. — has had its payments suspended by Medicare and Medicaid since April 2014. UHS and 25 of its behavioral health facilities are also the subject of a coordinated civil investigation by federal authorities. In February of 2015, UHS disclosed that the civil aspect of the coordinated probe is a False Claims Act investigation focused on billings submitted to the government.
SEIU Healthcare is the healthcare arm of SEIU, representing 1 million members who work in healthcare and mental health settings. SEIU Healthcare members work in UHS facilities across the country and are dedicated to protecting patients and improving quality of care.
To learn more about our ongoing concerns about UHS, please visit: http://uhsbehindcloseddoors.org/
