UNIVERSAL HEALTH SERVICES, INC. V UNITED STATES

Gamma Group: Regina Barnett, Janae Logan, Yvonne McLarty-Russell, Raven Morgan, and Danielle Wade

SUBJECT• Name of the Case: Universal Health Services, Inc. v United States• Court the Case was Appealed From: The United States District Court for

the District of Massachusetts• Case number: 14-1423• Court of Jurisdiction: United States Court of Appeals for the First Circuit• Case number: 579 US _ (2016)• Justice Writing the Opinion: Clarence Thomas• Text where the Case can be Found: SupremeCourt.gov• Year in which the Case was Decided: 2016

FACTS• Yarushka Rivera received counselling services at Arbour Counseling Services, a mental

health facility, for five years. • In 2004, Ms. Rivera began having behavioral problems and was treated intermittently by

five medical professionals at Arbour. • In May 2009, Ms. Rivera was diagnosed with bipolar disorder from an alleged “doctor” at

Arbour. The alleged doctor prescribed Ms. Rivera with a medication that she had an adverse reaction to.

• In October 2009, she suffered two seizures, was hospitalized, and died at the age of seventeen.

• Ms. Rivera’s respondents, Carmen Correa and Julio Escobar, were told by an Arbour counselor that, “few Arbour employees were actually licensed to provide mental health counseling and that supervision of them was minimal.” Ms. Rivera’s respondents also discovered that only one of the five professional that treated Ms. Rivera were properly licensed.

FACTS• Her parents filed a qui tam suit and eventually sued Universal Health

Services, Inc.• The District Court dismissed the complaint.

STATEMENT OF ISSUES• After being diagnosed and prescribed a medication for bipolar

disorder by a doctor who falsely represented himself, Yarushka Rivera died from a seizure due to an adverse reaction from the medication.• Due to the fact that only few employees from Arbour Counseling

Services were permitted to provide mental health counseling as well as prescribe medication without supervision, there was a breach in the facility’s compliance.

STATEMENT OF ISSUES• Fraud was a definite issue; reimbursement claim was submitted to

Medicaid, but Universal Health Services, Inc. failed to disclose qualification and licensing of staff members. According to Massachusetts Medicaid regulations, reimbursement would not have been made if such information was made known. Clearly, a violation of the False Claims Act was now in question.

RULE OF LAW• The respondents or whistleblowers, filed a qui tam suit, declaring that the

Universal Health Services had violated the False Claims Act (FCA) in 2011. • Whistleblower: A person who reports corruption and criminal and unethical

business practices in the workplace to appropriate government.• The False Claims Act of 1863: Purpose is to discourage fraud against the

federal government in areas such as billing for services not rendered; unnecessary procedures, such as knowingly placing cardiac stents into patients; and homecare visits that never took place.

• 31 U. S. C. §3729(a)(1)(A): The False Claims Act enforces significant penalties on anyone who is liable for “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” to the Federal Government.

APPLICATION: CONCERNING THE IMPLIED CERTIFICATION THEORY

• The respondents sought to hold the Universal Health Services liable under the implied false certification theory of liability.

• The implied false certification theory, “treats a payment request as a claimant’s implied certification of compliance with relevant statues, regulations, or contract requirements that are material conditions of payment that treats a failure to disclose a violation as a misrepresentation that renders the claim false or fraudulent.”

• Implied certification theory is a claim that contains no express certification, but the claimant implied that it has complied with any preconditions to payment set forth expressly in statues or regulations by submitting the claim for payment.

APPLICATION: APPLYING THE FACTS OF THE CASE TO RULE(S)

• Case Facts: Respondents• Arbour’s staff violations include:

• Individuals falsely identifying themselves as “doctors

• Individuals that were not properly licensed to provide mental health services

• Received their degree from an unaccredited Internet college.

• The staff also lacked the authority to prescribe medications without supervision and the clinical director knowingly helped misrepresent the qualifications of the staff.

• False Claims Act: Universal Health Services

• Universal Health Services “knowingly” misrepresented its compliance with mental health faculty requirements that are so central to the provision of mental health counseling that the Medicaid program would have refused to privacy these claims has it known of these violations.

APPLICATION: ARGUMENTSApplication: Argument presented by the Respondents

• The respondents claimed that the staff was unsupervised, unlicensed, violated regulations of Massachusetts, and billed for services not rendered in order to receive Medicaid reimbursements were made.

• The respondents argued that according to the theory of False Claims Act, that the Universal Health Services defrauded the Medicaid program by submitted reimbursement claims that implied certified compliance with all conditions of payment.

• They failed to disclose serious violation of regulations pertaining to licensing requirements for the services and staff qualifications. They also failed to disclose any violation of material statutory, regulatory, or contractual requirement makes a claim “false or fraudulent.”

Application: Argument presented by opposing party, Universal Health Services

• The opposing party, requested that the District Court dismiss the claims presented by the respondents as their argument. • The District Court granted Universal Health’s motion to dismiss the claims. • The reason that the district court dismissed the respondents’ claims was because the decision was based on the fact that compliance with the regulations was not a condition of payment from the government. • The District Court stated that the, “respondents had failed to state under that theory because, with one exception, none of the regulations that Arbour violated was a condition of payment.

PRECEDENT: THE UNITED STATES EX REL. HUTCHESON V. BLACKSTONE MEDICAL, INC.

• Precedent (common law): A judicial decision that may be used as a standard in subsequent similar cases.

• Set when a court decision is rendered that serves as a rule for future guidance when deciding similar cases.

• Precedent case: United States ex rel. Hutcheson v. Blackstone Medical, Inc., 647 F. 3d 377, 385–387 (CA1 2011). The implied false certification theory in this previous case was used as guidance in the Universal Health Services v United States case.

HOLDING (CONCLUSION) • Since the interpretations of the False Claims Act is different between the

Government and the Respondents, all eight justices canceled their judgment and remanded the decision to the U.S. District Court for the District of Massachusetts.• Will address if Respondents accurately pleaded a False Claims Act violation or

if they should have pleaded malpractice.

OTHER OPINIONS• Due to an unanimous decision of all eight justices, there were no

concurring or dissenting opinions.

Roberts

Kennedy

Thomas

Ginsburg

Breyer

Alito

Sotomayor

Kagan

FINAL THOUGHTS• The Gamma Group did not agree with the holding.• Arbour Counseling Services knowingly omitted critical requirements for

reimbursement.• If specified in the claim that the Arbour staff were supposed to be

supervised, then they would not have been reimbursed for that claim.• Yarushka could have possibly been alive had the staff been supervised.• Having this case remanded presents a longer trial and leaves questions

unanswered by the Government.

REFERENCES• Cadwalder. (2015, December 11). The End of the Implied Certification Theory?: The U.S. Supreme Court Grants Certiorari in Case That Could Substantially

Limit the False Claims Act. Retrieved September 25, 2016, from Cadwalder: https://www.cadwalader.com/uploads/cfmemos/9dd8772d1edb6485be555773a2959c7a.pdf

• Cooper, J. W., Handwerker, J. L., Holman, C. A., Hussain, M., Kelly, C., Ogrosky, K., . . . Shudofsky, S. L. (2016, June 17). UHS v. U.S. ex rel. Escobar : Supreme Court Refines "Implied Certification" Theory of False Claims Act Liability. Retrieved September 25, 2016, from Arnold & Porter: http://www.arnoldporter.com/en/perspectives/publications/2016/06/uhs-v--us-ex-rel-escobar

• Dorsey. (2016, June 16). The Supreme Court - June 16, 2016. Retrieved September 25, 2016, from The Supreme Court: https://www.dorsey.com/newsresources/publications/client-alerts/2016/06/the-supreme-court-june-16-2016

• Justice.gov. (2011, April 22). Retrieved September 28, 2016, from www.justice.gov: https://www.justice.gov/sites/default/files/civil/legacy/2011/04/22/C-FRAUDS_FCA_Primer.pdf

• Legal Information Institute. (2016, June 16). UNITED HEALTH SERVICES, v. UNITED STATES. Retrieved September 25, 2016, from Cornell University Law School: https://www.law.cornell.edu/supremecourt/text/15-7

• Legal Information Institute. (n.d.). 31 U.S. Code § 3729 - False claims. Retrieved September 25, 2016, from Cornell University Law School: https://www.law.cornell.edu/uscode/text/31/3729

• Oyez IT Chicago-Kent College of Law. (n.d.). Universal Health Services, Inc. v. Escobar. Retrieved September 25, 2016, from Oyez IT Chicago-Kent College of Law: https://www.oyez.org/cases/2015/15-7

• Pozgar, G. D. (2016). Legal Aspects of Health Care Administration (12th ed.). Burlington, MA, USA: Jones & Bsrtlett Learning.• Sidley Austin LLP. (2011, August 1). First Circuit Rewrites False Claims Act Requirements and Significantly Expands Potential Liability . Retrieved September

25, 2016, from Sidley: http://www.sidley.com/news/first-circuit-rewrites-false-claims-act-requirements-and-significantly-expands-potential-liability-08-01-2011• Skelton, C. (n.d.). Universal Health Servs., Inc. v. United States 579 U.S. ___ (2016) :: Justia U.S. Supreme Court Center . Retrieved September 28, 2016, from

https://supreme.justia.com/cases/federal/us/579/15-7/• Universal Health Services, Inc. v United States, 579 US _ (2016) (United States Court of Appeals for the First Circuit June 16, 2016). Retrieved from

https://www.supremecourt.gov/opinions/15pdf/15-7_a074.pdf

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