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The U.S. Department of Justice is investigating Universal Health Systems of Pennsylvania and certain affiliated behavioral health centers for alleged billing fraud, Universal reported in a Feb. 25 filing with the Securities and Exchange Commission.
The investigation, going back to 2008, is focused on billings submitted to government payers, according to Universal, a Fortune 500 company.
"At present, we are uncertain as to potential liability and/or financial exposure of the company and/or named facilities, if any, in connection with these matters," Universal said in the filing.
In some cases, the government is demanding repayment, such as in Pennsylvania. In September 2015, the Department of Public Welfare demanded $4 million in Medicaid Disproportionate Share Hospital payments for the 2011 federal fiscal year, Universal said.
Should the demand for repayments be successful, the Department of Public Welfare could take similar action for fiscal years 2012 through 2014, Universal said.
"We have filed administrative appeals for all of our facilities contesting the recoupment efforts since we believe DPW's calculation methodology is inaccurate and conflicts with applicable federal and state laws and regulations," Universal said. "DPW has agreed to postpone the recoupment of the state's share of the DSH payments until all hospital appeals are resolved."
The Pennsylvania Department of Public Welfare extended the deadline to recoup the 55 percent federal share until April 30, 2016.
In April, 2014, the Centers for Medicare and Medicaid Services suspended Medicare payments to River Point Behavioral Health in Florida, Universal said.
The Florida Agency for Health Care Administration subsequently issued a Medicaid payment suspension for the facility, the report said. River Point Behavioral Health issued a rebuttal and requested revocation, but in August 2015, CMS said it would continue the suspension for another 180 days.
On August 7, 2015, CMS terminated the provider agreement for Timberlawn Mental Health System in Texas for allegedly being out of compliance for participating in the Medicare and Medicaid program.
Timberlawn appealed, but later agreed to not to pursue the case in court and remained open.
However, in December, 2015, Timberlawn received notice from the Texas Department of State Health Services of its intent to revoke Timberlawn's license and impose an administrative penalty.
"We have appealed and are contesting the proposed revocation and fine," Universal said.
In January, Timberlawn submitted its application for re-enrollment into the CMS program.
The Office of the Inspector General for the Department of Health and Human Services and the Department of Justice are investigating, or have requested documents from Universal facilities including: Keys of Carolina and Old Vineyard Behavioral Health in North Carolina; The Meadows Psychiatric Center in Pennsylvania; Friends Hospital in Philadelphia; Streamwood Behavioral Health, Hartgrove Hospital, and Rock River Academy and Residential Treatment Center in Illinois; Riveredge Hospital in Chicago; Roxbury Treatment Center in Pennsylvania; Harbor Point Behavioral Health Center, f/k/a The Pines Residential Treatment Center, including the Crawford, Brighton and Kempsville campuses in Virginia; Wekiva Springs Center and River Point Behavioral Health, in Florida; Coastal Harbor Health System in Savannah, Georgia; Salt Lake Behavioral Health in Utah; Central Florida Behavioral Hospital and University Behavioral Center in Florida; and the National Deaf Academy in Florida.
"We were advised that a qui tam action had been filed against Roxbury Treatment Center but the government declined to intervene and the case was dismissed," Universal said.
In December 2015, the civil investigation widened to include Arbour Hospital, Arbour-Fuller Hospital, Pembroke Hospital and Westwood Lodge located in Massachusetts.
The Boston Globe reported that the Department of Justice investigation into billing fraud includes all five hospitals in Massachusetts run by Universal, the largest private provider of mental health services in the state.
In 2015, authorities investigated potential Stark Law violations between the El Paso Behavioral Health System facility and physicians in El Paso, Texas, the report said.
Also in 2015, Texoma Medical Center, which includes TMC Behavioral Health Center, entered into a Systems Improvement Agreement with CMS which stopped termination action, Universal said. The terms of the agreement are set to conclude October 2, 2016 unless fulfilled earlier.
The most recent investigation is from January, 2016, when the Department of Justice opened a case involving compensation paid to cardiologists pursuant to 2005 employment agreements at the South Texas Health System, according to the report.
"We operate in a highly regulated and litigious industry which subjects us to various claims and lawsuits in the ordinary course of business as well as regulatory proceedings and government investigations," Universal said. " ... Government action has increased with respect to investigations and/or allegations against healthcare providers concerning possible violations of fraud and abuse and false claims statutes as well as compliance with clinical and operational regulations. Further, the Affordable Care Act has added additional obligations on healthcare providers to report and refund overpayments by government healthcare programs and authorizes the suspension of Medicare and Medicaid payments 'pending an investigation of a credible allegation of fraud.'"