Transcription
The Federal False Claims Act allows private citizens who know of attempts to defraud the government to sue in the name of the United States. This is known as a qui tam lawsuit.
Universal Health Services versus United States ex rel. Escobar involves a qui tam lawsuit in a case of Medicaid fraud. Teenager Yarushka Rivera regularly went to Arbor Counseling Services for treatment for her behavioral problems. One medical practitioner there diagnosed her with bipolar disorder. Another prescribed medication. Yurushka had a bad reaction to the drugs and died at age 17.
Yurushka's mother, Carmen Correa, and her stepfather, Julio Escobar, then discovered that the so-called medical professionals at Arbor weren't actually licensed to provide mental health counseling. The practitioner who diagnosed Yurushka claimed to be a psychologist with a PhD, but in fact, her degree came from an unaccredited online college, and the state of Massachusetts had rejected her application to be licensed as a psychologist. The practitioner who'd prescribed the medication claimed to be a psychiatrist but was in fact a nurse with no authority to prescribe medication without supervision. It turned out that 23 of Arbor's employees had been providing counseling services and prescribing medication without the necessary licenses or supervision. The clinic's director had been misrepresenting their qualifications in Medicaid reimbursement claims. Massachusetts had been unwittingly paying these claims.
Correa and Escobar filed a qui tam lawsuit against Arbor's owner, Universal Health Services. They alleged that Universal, through Arbor, had defrauded the Medicaid program and knowingly failed to disclose violations of state regulations regarding staff qualifications. They argued that Universal had therefore violated the False Claims Act under the theory of implied false certification. The district court held that following Massachusetts regulations wasn't a condition of payment. It dismissed the case. The First Circuit reversed. The United States Supreme Court granted cert.