Universal Health Services, King of Prussia, Pa., is facing an inquiry from HHS' inspector general's office into the operations of several behavioral health facilities.
The publicly traded system said in its annual report that it received a subpoena
last month requesting documents dating as far back as January 2008 concerning 10 treatment centers. One of the facilities, the Keys of Carolina, was closed and sold in an unrelated deal in January.
The “focus, scope or extent of the investigations, liability of the facilities and/or potential financial exposure, if any,” is still unclear, UHS said in the Securities and Exchange Commission filing.
The geographically diverse group includes hospitals UHS already had in its portfolio as well as those acquired through its 2010 takeover of Psychiatric Solutions PSI faced a Justice Department subpoena
in October 2010, one month before the deal closed.
The inspector general's subpoena follows notification UHS received in December of the Justice Department's plans to investigate two of those facilities, the Keys of Carolina, Charlotte, N.C., and Old Vineyard Behavioral Health Services, Winston-Salem, N.C. Also in December, Virginia's attorney general subpoenaed Harbor Point Behavioral Health Center, Portsmouth.
The facilities represent about 6% to 7% of the company's consolidated revenue, CFO Steve Filton said during a question and answer session on Friday earnings call.
All systems, but especially large chains, have been on high alert since the Obama administration singled out healthcare fraud
and abuse as a “Cabinet-level priority.”
Filton noted on the call that while it appears the government is focusing on clinical practices, it's still too early to tell whether a billing or False Claims Act case could result.
“The bulk of the request, I think, is for patient records, etc., which would sort of lead you to believe the focus is probably more on clinical matters,” he said, adding however that “there's a history of the government trying to convert that, if you will, into a billing issue.” But, he added, “We have no idea if that's where the government is going in this case and certainly couldn't predict that.”
In a note to clients, A.J. Rice, a UBS analyst, said that while clinical questions come up periodically, they seldom lead to large payouts. Medicare makes up about 19% of the payer mix for psychiatric hospitals, he added.