Thursday, November 19, 2009

Reminder To Adopt Compliance Plan: U.S. Intervenes In False Claims Act Suit Against Psychiatric Treatment Facility For Adolescent Boys

On November 4, 2009, the United States and the Commonwealth of Virginia intervened in a False Claims Act suit in the Western District of Virginia against the Medicaid providers Universal Health Services Inc., Keystone Marion LLC and Keystone Education and Youth Services LLC. The facilities at issue were Keystone Marion Youth Center, a residential facility in Marion, Virginia, that receives Medicaid funds to provide psychiatric counseling and treatment for boys ages 11-17.

This False Claims Act lawsuit was filed by several former therapists who worked at the Marion residential facility. The lawsuit alleges that the facilities provided sub-standard care to adolescents in violation of federal and state Medicaid requirements, falsified records to cover up their serious violations and filed false Medicaid claims.

Under the False Claims Act, a health care provider that submits false or fraudulent claims to a federal health care program is liable for three times the government’s damages, plus a civil penalty for each false claim.

Attorney Commentary: This type of qui tam lawsuit is a reminder to all health care providers and regulated industries to have a compliance plan. The employees would receive a copy of the compliance plan and they would sign a document acknowledging receipt of it and agreeing to follow it. In essence, they they would agree to report any alleged program violations or any wrongdoing to the employer.

In addition, it is necessary to have personnel policies in place to follow up and ensure that the employees believe they can report any perceived wrongdoing or perceived violations of policies. Where employees do not feel like team members, there can be problems. Many cases we handle were initiated by complaints by former employees.

In qui tam lawsuits which are contingency, the employees also will be compensated without having to spend any money for legal fees. Thus, terminated employees have an incentive to report alleged fraud or abuse to a qui tam attorney. Terminations of employees need to include exit interviews where specific questions are asked regarding any actual or perceived wrongdoing. If they report it then, the employer can take actions to investigate (internal or outside) and take actions in accordance with the compliance plan.

Any questions or comments should be directed to: Tracy Green is a principal at Green & Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is:


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