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Universal Health Services, Inc. v. United States et al. ex rel. Escobar et al.

Supreme Court of the United States
136 S. Ct. 1989 (2016)


Arbour Counseling Services (Arbour) was a mental health facility and a subsidiary of Universal Health Services (Universal) (defendant). Arbour treated Yarushka Rivera for behavioral problems. At Arbour, Rivera was diagnosed with bipolar disorder. Rivera then had an adverse reaction to a medication that a purported doctor at Arbour had prescribed her. As a result of the medication, Rivera suffered a seizure and died. Rivera’s parents (plaintiffs) discovered that most Arbour employees were not properly licensed. The practitioner who diagnosed Rivera identified herself as a psychologist with a Ph.D., but failed to mention that her degree came from an unaccredited online college and that the state rejected her application to be licensed as a psychologist. The practitioner who prescribed the medication to Rivera was held out as a psychiatrist, but was in fact a nurse who lacked authority to prescribe medication. When submitting reimbursement claims to Medicaid, Arbour staff members also misrepresented their qualifications and licensing status to the government. The state Medicaid program was unaware of the misrepresentation and paid the claims. Rivera’s parents filed a qui tam suit in federal court, alleging that Universal (through Arbour) failed to disclose violations of regulations relating to staff qualifications. Rivera’s parents also accused Universal of defrauding the Medicaid program. The trial court granted Universal’s motion to dismiss, holding that the regulations were not a condition of payment. The appellate court reversed, holding that a regulatory requirement can be a condition of payment by implication. The case was then brought before the Supreme Court.

Rule of Law


Holding and Reasoning (Thomas, J.)

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