Universal Health Services, Inc. v. United States

136 S.Ct. 1989 (2017)

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Nature of the Case

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Facts

For five years, Yarushka Rivera, a teenage beneficiary of Massachusetts’ Medicaid program, received counseling services at Arbour Counseling Services, a satellite mental health facility in Lawrence, Massachusetts, owned and operated by a subsidiary of petitioner Universal Health Services (D). Yarushka started having behavioral problems, and five medical professionals at Arbour intermittently treated her. In May 2009, Yarushka had an adverse reaction to a medication that a purported doctor at Arbour prescribed after diagnosing her with bipolar disorder. Her condition worsened; she suffered a seizure that required hospitalization. In October 2009, she suffered another seizure and died. She was 17 years old. An Arbour counselor revealed Yarushka’s mother and stepfather-that few Arbour employees were actually licensed to provide mental health counseling and that supervision of them was minimal. Ps discovered that, of the five professionals who had treated Yarushka, only one was properly licensed. The practitioner who diagnosed Yarushka as bipolar identified herself as a psychologist with a Ph. D., but failed to mention that her degree came from an unaccredited Internet college and that Massachusetts had rejected her application to be licensed as a psychologist. The practitioner who prescribed medicine to Yarushka, and who was held out as a psychiatrist, was a nurse who lacked authority to prescribe medications absent supervision. Rather than ensuring supervision of unlicensed staff, the clinic’s director helped to misrepresent the staff’s qualifications. Some 23 Arbour employees lacked licenses to provide mental health services, yet-despite regulatory requirements to the contrary-they counseled patients and prescribed drugs without supervision. When submitting reimbursement claims, D used federal payment codes corresponding to different services that its staff provided to Yaruskha. Staff members also misrepresented their qualifications and licensing status to the Federal Government to obtain individual National Provider Identification numbers. Ps filed complaints with various Massachusetts agencies. D agreed to a remedial plan, and two Arbour employees also entered into consent agreements with Massachusetts. Ps filed a qui tam suit alleging that D had violated the False Claims Act under an implied false certification theory of liability. The District Court granted D’s motion to dismiss the complaint holding that Ps had failed to state a claim under that theory because none of the regulations that D violated was a condition of payment. The United States Court of Appeals for the First Circuit reversed in relevant part and remanded. The court observed that each time a billing party submits a claim, it “implicitly communicates that it conformed to the relevant program requirements, such that it was entitled to payment.” To determine whether a claim is “false or fraudulent” based on such implicit communications, the court explained, it “asks simply whether the defendant, in submitting a claim for reimbursement, knowingly misrepresented compliance with a material precondition of payment.” In the court’s view, a statutory, regulatory, or contractual requirement can be a condition of payment either by expressly identifying itself as such or by implication. D appealed and the Supreme Court granted certiorari.