United States, ex rel. Escobar v. Universal Health Servs., Inc., No. 14-1423 (1st Cir. 2015)Annotate this Case
Relators’ daughter was being treated by counselors at Arbour Counseling Services in Lawrence, Massachusetts when she was prescribed a medication for her purported bipolar disorder. The daughter experienced an adverse reaction to the drug and eventually suffered a fatal seizure. Relators filed this action against Defendant Universal Health Services, Inc., Arbour’s owner and operator, under both the federal and Massachusetts False Claims Acts, alleging that Arbour, in submitting reimbursement claims to the state Medicaid agency for services rendered by the staff members who treated their daughter, fraudulently misrepresented that those staff members were properly licensed and supervised, as required by law. Specifically, Relators alleged that Arbour’s alleged noncompliance with supervision and licensure requirements rendered its reimbursement claims actionably false. The district court dismissed the complaint for failure to state a claim. The First Circuit reversed the dismissal of the complaint with one limited exception, holding (1) a healthcare provider’s noncompliance with conditions of payment is sufficient to establish the falsity of a claim for reimbursement; and (2) Relators appropriately stated a claim with particularity under the False Claims Act.