April 30, 2017

Top Court Decides Universal Health Services, Corporation. v. U . s . States et al. ex. rel. Escobar et al.

Top Court Decides Universal Health Services, Corporation. v. U . s . States et al. ex. rel. Escobar et al.

On June 16, 2016, the final Court from the U . s . States made the decision Universal Health Services, Corporation. v. U . s . States et al. ex. rel. Escobar et al., No. 15-7, holding that omitting material statutory, regulatory, or contractual violations which make other representations misleading inside a claim for reimbursement supports False Claims Act liability.

In ’09, Yarushka Rivera endured a seizure and died while receiving counseling services and treatment from Arbour Counseling Services, a subsidiary of Universal Health Services. Her mother and stepfather later learned that the majority of Arbour’s employees lacked the right licenses which the specialist who prescribed the medication for Rivera’s bpd lacked authority to prescribe medications not being watched. When submitting reimbursement states State medicaid programs, Arbour staff overlooked these too little their qualifications and licensing status.

Rivera’s mother and stepfather filed a qui tam action underneath the False Claims Act, which imposes penalties on individuals who present or induce the submission of false or fraudulent claims, including demands for reimbursement of funds under federal benefit programs.

Even though the False Claims Act doesn’t define what is really a “false” or “fraudulent” claim, the final Court held that representations that condition the reality while omitting critical qualifying information could be actionable misrepresentations. The choice began using the statute’s language. By not defining “false” or “fraudulent,” Congress incorporated the well-settled common law concept of fraud – and customary-law fraud has lengthy encompassed misrepresentations by omission. The claims within this situation constituted “representations that condition the reality only to date as the story goes, while omitting critical qualifying information.”

Just like a job applicant that lists prior jobs after which “retirement,” but does not disclose that “retirement” occasioned time in jail for bank fraud, submitting payment claims using codes akin to specific services constituted a representation that particular treatment was provided. Arbour staff also made representations akin to specific job titles which were, in context, misleading.

A Legal Court rejected Universal Health’s argument the government must specifically designate a disclosure like a condition of payment. The “clear statutory text” didn’t offer the requirement. Rather, whether an offender recognizes that an omission is material towards the payment decision determines liability.

Justice Thomas delivered the unanimous opinion from the Court.

Download Opinion from the Court


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