Massachusetts accuses UHS of Medicaid billing fraud

The state of Massachusetts intervened Monday in a landmark false claims case accusing King of Prussia, Pa.-based Universal Health Services of illegally charging Medicaid for outpatient mental health services provided by unqualified staff.

In its complaint-in-intervention, the state accuses UHS of submitting false claims to MassHealth, Massachusetts' Medicaid program, for care provided by Arbour Counseling Services in Lawrence, Mass., which is owned by UHS. 

Massachusetts' complaint will be added to the allegations against UHS brought by the parents of a teenage girl who died in 2009 after having an adverse reaction to medication prescribed by an Arbour Counseling employee. A subsequent investigation revealed Arbour Counseling was not in compliance with several Massachusetts regulations related to licensure and supervision in the course of the teenager's treatment.

The case, which focuses on the implied certification theory of False Claims Act liability, made its way to the U.S. Supreme Court in 2016 and was one of the most high profile false claims cases of last year. Under the implied certification theory, a healthcare provider implies it is compliant with all conditions of payment, such as Medicaid rules, when it submits a claim for payment. If the provider was actually in violation of a material statutory, regulatory or contractual requirement at the time of submission, the claim is rendered false or fraudulent.

In a unanimous opinion issued in June, the high court ruled that False Claims Act liability can be based on the implied certification theory. The Supreme Court remanded the case to the lower court to determine if UHS violated the False Claims Act using the approach set out by the high court.

Massachusetts relies on the implied certification theory as a basis for liability in its complaint-in-intervention.

"If the UHS entities had not impliedly misrepresented compliance with applicable state laws and regulations, MassHealth would not have paid for the claims submitted for services and prescriptions," the state wrote in its complaint.

The state is seeking civil penalties and treble damages on the $94.22 million in reimbursement it made to Arbour Counseling centers from 2005 through 2013.  

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