Supreme Court to hear arguments in lawsuit stemming from Massachusetts Psychiatric clinic death

The Supreme Court will hear oral arguments Tuesday in what could be a precedent-setting case stemming from the death of a Massachusetts teen after treatment at a Universal Health Services-owned facility. The case, referred to as Universal Health Services v United States ex rel. Escobar, was brought by the teen's parents against Universal Health Services, the largest owner of psychiatric hospitals and clinics in the United States.

According to a report by the Boston Globe and the Supreme Court blog, the lawsuit centers on the death of 19 year-old Yarushka Rivera, who received care at a UHS-owned Arbour Health System clinic in Lawrence, and was covered by Medicaid. The girl's parents allege that unlicensed and unsupervised therapists diagnosed their daughter with bipolar disorder, and another unsupervised staff member prescribed an anti-seizure drug to her. After Rivera stopped taking the drug she developed a seizure disorder, eventually suffered a seizure in October 2009 and died.

[Also: Universal Health Systems' behavioral health centers under investigation for alleged billing fraud]

According to a Scotus blog post by Ronald Mann, professor of law at Columbia University, the parents argue that the company violated the False Claims Act in billing government health programs for their daughter's care, because the caregivers had violated state regulations in not properly supervising the unlicensed personnel that were caring for her.

Massachusetts state law allows for unlicensed staff to care for patients as long as they are properly supervised, but the girl's parents said none of the people caring for her had the proper licenses or supervision. In fact, twenty-three counselors at the Lawrence clinic alone were unlicensed and unsupervised, according to the Globe report, and that group of employees treated almost every patient there.

[Also: Universal Health Services profits jump to $182 million in second quarter]

Moreover, even though state law requires that any nurse practitioner prescribing medication only do so if supervised by a staff psychiatrist who is either board certified or eligible for board certification, the staff psychiatrist at the Lawrence facility where Rivera was treated had failed her boards and was therefore not properly certified, the Globe said.

The lower courts upheld the family's complaint. UHS is expected to argue before the Supreme Court that the complaint is a compliance issue, not a False Claims Act issue, explained Mann. That is to say, if UHS billed for care it actually rendered, whether effective or harmful, there was no violation of the False Claims Act.

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"If the claim seeks repayment for goods and services that the contractor actually provided and does not describe or claim any aspect of the goods and services that the contractor failed to provide, then, the contractor contends, the claim cannot be actionable under the FCA," Mann summarized.

He said it is hard to predict whether the Justices will find merit in the parents' complaint, or whether they will side with UHS. "On the one hand, the Justices ordinarily are protective of government contractors; on the other, they tend to be almost reflexively hostile to those who defraud the government," said Mann.

He also said a compelling factor could be the number of organizations which have submitted supporting briefs on behalf of both the parents' case and UHS's defense. The parents' case has the support of the Solicitor General, said Mann.

All of Universal Health Services in Massachusetts are under federal investigation for alleged fraudulent billing practices, according to the Securities and Exchange Commission. 

Twitter: @BethJSanborn