Thursday, March 29, 2012

Residential Youth Treatment Facility for Medicaid Recipients in Marion, Virginia Agrees to Resolve False Claims Act Allegations


Universal Health Services Inc. (UHS) and two subsidiaries have reached a settlement in a False Claims Act lawsuit with the United States and the Commonwealth of Virginia, the Justice Department announced today. Under the settlement, UHS and its subsidiaries, Keystone Education and Youth Services LLC and Keystone Marion LLC, which did business as the Keystone Marion Youth Center, a residential facility in Marion, Va., agreed to pay $6.85 million to the United States and the commonwealth to settle allegations that they provided substandard psychiatric counseling and treatment to adolescents in violation of Medicaid requirements, falsified records and submitted false claims to the Medicaid program. UHS closed the Marion facility earlier this year.

This settlement resolves a whistleblower lawsuit filed by Megan Johnson, Leslie Webb and Kimberly Stafford-Payne, former therapists at the closed facility. UHS and its subsidiaries have paid an additional amount under the terms of the agreement to the former therapists to settle their separate discrimination and attorney’s fees claims. The United States and the Commonwealth of Virginia had intervened in the lawsuit on Nov. 4, 2009.

Under the False Claims Act, an entity that submits false or fraudulent claims to the government is liable for three times the government’s damages, plus a civil penalty for each false claim. The claims settled by this agreement are allegations only; there has been no determination of liability.

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