Universal Health Services v. Escobar involves a allegation of the violation of the Federal False Claims Act by Universal Health Services (through its subsidiary Arbour Health System) in its provision of mental health counseling services to teenager Yarushka Rivera of Lawrence, Massachusetts under that state's Medicaid program. Yarushka died in 2009 at the age of 17 following multiple seizures after several years of treatment, including the prescription of strong prescription drugs to which she apparently had an adverse reaction, received at one of Universal's Lawrence clinics.
Those interested in the Federal False Claims Act and the theory of implicit fraud or implied certification theory of FCA liability -- including myself -- have reviewed the Supreme Court's recent opinion with interest. After Yarushka's death, a clinic worker apparently came forward to her parents to advise that those who had been treating the teen were not qualified to do so under state licensing and Medicaid regulations.
The case hinges on whether the clinic's billing of the Massachusetts Medicaid program, without disclosure of the failure to comply with the relevant credentialing and supervisory regulations, was an implicitly false claim under the implied certification theory of FCA liability. From one perspective, the filing of the claim for reimbursement implied that the relevant providers were appropriately credentialed for the services provided and the method in which they were provided. Alternatively, silence as to credentials and supervisory standards might be construed as just that: a non-representation and, had the state deemed the credentialing and supervisory standards absolutely critical to the payment of the claim -- materially relevant -- they would have been called out as such. This is, as a result, a case about the sounds of silence and about materiality.
Half truths are funny things. Benjamin Franklin reminds us that "Half a truth is often a great lie." The willful omission of information the reasonable consumer and/or payer would deem essential to acceptance of the services and payment for the services cannot serve to insulate the half truth teller or can it? Here's Justice Thomas for the majority:
Accordingly, we hold that the implied certification theory can be a basis for liability, at least where two conditions are satisfied: first, the claim does not merely request payment, but also makes specific representations about the goods or services provided; and second, the defendant’s failure to disclose noncompliance with material statutory, regulatory, or contractual requirements makes those representations misleading half-truths.
There is another kind of half truth in this case. This is the half truth we tell ourselves when we say this case is about bureaucratic regulations and health care fraud alone. This case encapsulates so much more. I have to ask myself how it could be that one of the largest mental and behavioral health providers of services to low income individuals in Massachusetts conducted themselves, for as long as decades at a time, in violation of credentialing and supervision requirements put in place out of concern over safety and quality.
It may be that "don't ask, don't tell" is another kind of half truth -- also the kind that is often a great lie. A reluctance to inquire too closely, until shamed into doing so, into the bona fides of one of the largest providers of mental health and behavioral health services in the entire state of Massachusetts may stem, in part, from the reality of the extreme shortage of mental and behavioral health providers available to the Medicaid population. This is particularly true in Lawrence, Massachusetts, the poorest city in Massachusetts and one of the poorest cities in the entire United States.