Update on Universal Health Services' false claims suit: 3 things to know

The First Circuit has denied King of Prussia, Pa.-based Universal Health Services' petition for an en banc rehearing on the revival and remand of a False Claims Act case that was filed against the for-profit hospital operator, according to a Law 360 report.

The case accuses UHS of seeking reimbursement from government payers for poor care provided at one of its mental health facilities.

The UHS motion for an en banc rehearing claimed the panel of judges that heard the case on appeal acted unfairly, basing its decision on possible violations of a regulation that no parties to the lawsuit ever mentioned. However, the appeals court didn't agree with UHS' argument and ruled that neither the original panel nor the entire circuit would rehear the case.

Listed below are three highlights of the case.

1. The suit was filed by the parents of a patient who died in 2009 in a Massachusetts UHS mental health center after suffering from seizures allegedly caused by bad reactions to medicine she received from unlicensed counselors and nurses. The suit alleged UHS improperly sought reimbursement from Medicaid for those services, despite the services being provided by unsupervised and unqualified staff members.

2. A U.S. District Judge found the suit never clarified whether the mental health facility was an autonomous UHS satellite or a dependent UHS satellite, an issue that affects which regulations would apply. The judge dismissed the case, and the case was appealed.

3. However, on appeal, the panel of judges from the First Circuit maintained the rules mandating sufficient supervision applied to clinical directors of both kinds of satellites and the False Claims Act requires compliance as a precondition for government reimbursement. On March 17, the appeals court reversed almost all of the district judge's decision, including the judge's dismissal of the case.



More articles on industry lawsuits:
Florida governor to sue feds for withholding hospital funding
NY cardiologist charged for arranging hit on competitor
Quality Systems sued for alleged retaliatory firing

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