Cohen Seglias partners Julie Grohovsky and Shanlon Wu obtained an important civil settlement between the U.S. Department of Justice and numerous state attorneys general’s offices against Universal Health Services, Inc. and UHS of Delaware, Inc. (UHS), a Fortune 500 company that provides hospital and health care services including inpatient behavioral health services that were the subject of this settlement. The pair, while at their former firm Wu Grohovsky PLLC, filed a qui tam case under the federal False Claims Act on behalf of Dr. Steven Klotz, a psychiatrist who was employed at the UHS Roxbury Treatment Facility, in Roxbury, Pennsylvania. Dr. Klotz is one of 18 whistleblowers who filed complaints against UHS. Because the state of Pennsylvania does not have a state false claims act, Pennsylvania will not receive any of the states’ recovery in this case.
In its press release issued about this settlement, the Department of Justice reports:
UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country.
The government alleged that, between January 2006, and December 2018, UHS’s facilities admitted federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. The government further alleged that UHS’s facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS’s facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.
Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs.
The Department of Justice also stated:
The government’s settlement with UHS resolves 18 cases pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia under the qui tam, or whistleblower, provision of the False Claims Act, which permit private parties to file suit for false claims on behalf of the United States and to share in any recovery. The whistleblower share of the federal portion of the settlement will be $15,862,457.03.
Contemporaneous with the civil settlements announced today, UHS, on behalf of its inpatient acute and residential behavioral health facilities, has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (OIG), which will remain in effect for five years. UHS must retain an independent monitor, selected by the OIG, which will assess UHS’s Behavioral Health Division’s patient care protections and report to the OIG. In addition, an independent review organization will perform annual reviews of UHS’s inpatient behavioral health claims to federal health care programs.
As Cohen Seglias partners, Julie and Shan will continue to represent whistleblowers in the firm’s newly formed False Claims Act and Whistleblowers Group.