U.S. ex rel. Bellevue v. Universal Health Servs. of Hartgrove, Inc. – April 2015 (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Bellevue v. Universal Health Servs. of Hartgrove, Inc., No. 11 C 5314 (N.D. Ill. Apr. 24, 2015)

The United States District Court for the Northern District of Illinois granted a psychiatric hospital’s motion to dismiss an action alleging violations of the False Claims Act. A therapeutic counselor filed the lawsuit on behalf of the federal government and the State of Illinois, alleging that the hospital had violated both federal and state law when it submitted certain reimbursement claims to Medicaid.

According to the counselor, the hospital knowingly and repeatedly billed Medicaid for patients that exceeded its authorized capacity. Among other things, the counselor stated that he had personally observed adolescents sleeping in the dayroom on rollaway beds instead of being admitted to a regular patient room. The counselor argued that an individual room is an essential part of the treatment provided by the psychiatric hospital, and argued that failure to provide this room was a complete abdication of the obligation to treat patients.

The court disagreed and held that the counselor had failed to provide sufficient evidence to support his contention that an individual room was essential to treatment. The court ruled that even if the hospital had falsely certified that it was giving individual rooms to patients who were actually sleeping in a common room, those facts alone would not be sufficient to establish liability under the False Claims Act. According to the court, absent an allegation that the failure to provide a patient room destroyed the effectiveness of the rest of the treatment provided, the counselor’s allegation that certain patients were deprived of that particular aspect of the services that they were entitled to cannot serve as the basis of a False Claims Act claim. For these reasons, and others, the court granted the hospital’s motion to dismiss the counselor’s complaint.