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Universal Health Services to pay more than $127m to end allegations of improper billing

Massachusetts Attorney General Maura Healey
Massachusetts Attorney General Maura HealeySteven Senne/Associated Press/File 2019

Universal Health Services Inc., the largest US owner of psychiatric hospitals and clinics, has agreed to pay more than $127 million to resolve allegations that it improperly billed government insurance programs in Massachusetts and states around the country.

Attorney General Maura Healey said in a statement Monday that the company and two affiliates, including Arbour Counseling Services, will pay $10 million to settle two lawsuits alleging the state’s Medicaid program, known as MassHealth, was charged for services provided by unlicensed and non-independently licensed staff and unqualified psychologists who were not properly supervised, and for medications prescribed by psychiatric nurses who were not properly supervised.

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The lawsuits — one a whistle-blower case filed by the family of a patient, the other filed by Healey’s office — covered outpatient mental health services between 2009 and 2017 at centers in Allston, Fall River, Franklin, Haverhill, Lawrence, Lowell, Malden, Norwell, Woburn, and Worcester.

Separately, the Pennsylvania-based company will pay $117 million to settle fraud allegations by multiple states and the federal government. The lawsuits said that the company was paid for services provided to Medicaid beneficiaries at residential and inpatient treatment facilities who were not eligible for inpatient or residential treatment. Massachusetts will receive nearly $5.5 million as part of the multistate settlement.

Universal Health and Arbour have a long record of quality-of-care lapses in Massachusetts. A Boston Globe review in 2017 found that Arbour turned a healthy profit while repeatedly and sometimes egregiously shortchanging patient care.

In a statement, Universal Health said the settlements “do not constitute any formal legal finding of improper conduct or failure to provide appropriate care and treatment in accordance with governing rules and regulations. UHS unequivocally disputes any allegation that it engaged in wrongdoing of any kind and the agreement is not an admission of liability but merely a resolution of a civil claim.”

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The Massachusetts cases stemmed from a whistle-blower lawsuit filed by the parents of 19-year-old Yarushka Rivera, who died in 2009 while under the care of Arbour’s Lawrence clinic.

Julio Escobar, the girl’s stepfather, and Carmen Correa, her mother, alleged that unlicensed and unsupervised therapists diagnosed Rivera with bipolar disorder, and that a nurse working without adequate supervision prescribed an antiseizure medication sometimes given for mood disorders.

Rivera developed a seizure disorder after she stopped taking the drug and suffered a seizure shortly before she died. Virtually every therapist who came in contact with Rivera at the Lawrence clinic was unlicensed and unsupervised, her family said.

The case went to the US Supreme Court, which in 2016 ruled that a services provider can be liable for submitting false claims to the government by failing to disclose material noncompliance with regulations.

“This company routinely allowed unqualified and unsupervised mental health professionals to provide care to patients and improperly billed MassHealth for it,” said Healey. “This behavior put patients at risk and wasted critically needed health care dollars. With this settlement, millions of dollars will now be returned to our state.”

Liz Kowalczyk of the Globe staff contributed to this report.


Larry Edelman can be reached at larry.edelman@globe.com. Follow him on Twitter @GlobeNewsEd.