Company planning West Allis hospital to settle fraud allegations
Universal Health Services, the company that has contracted to provide inpatient care for patients now treated at the Milwaukee County Behavioral Health Division’s hospital in Wauwatosa, has reached a tentative agreement with the federal government and various state attorneys general to pay $127 million to settle allegations that some of its hospitals fraudulently billed Medicare and Medicaid.
The company won approval this month from the West Allis Common Council to build a $33 million behavioral health hospital at 1706 S. 68th St. The 120-bed hospital is expected to open in 2021.
Universal Health Services’ agreement in principle with the Justice Department and state attorneys general is subject to the requisite approvals and a definitive agreement, the company said in a news release on the financial results for its second quarter. The potential settlement was reported Thursday by Modern Healthcare.
Universal Health Services said it previously had been told that the Justice Department’s criminal investigation into the alleged fraudulent billing had been closed.
The company expects that a corporate integrity agreement with the Office of Inspector General for the U.S. Department of Health and Human Services will be part of the overall settlement.
Universal Health Services was being investigated for possible fraud at more than 30 of its behavioral health hospitals. The company has denied that any fraudulent billings were submitted to government agencies.
The law firm hired by the Milwaukee County Behavioral Health Division to do due diligence on the company determined that the allegations were limited to the hospitals under investigation.
The Behavioral Health Division had hoped to contract with a health system in Milwaukee County to replace the outdated Mental Health Complex in Wauwatosa, but none of them stepped forward.
Universal Health Services, which has wanted to enter the Milwaukee market, was the only entity that was willing to contract with the Behavioral Health Division.
The company also will contract with commercial health plans in addition to providing inpatient care for patients now treated at the Behavioral Health Division’s hospital.
Most of the patients at the Behavioral Health Division’s hospital are covered by Medicaid, Medicare or both. The hospital has about 45 patients on a typical day. Most of its patients are in periods of psychiatric crisis from depressive and bipolar disorders, psychotic disorders and other behavioral health conditions.
The Behavioral Health Division will continue to provide care at its hospital in Wauwatosa until the new hospital can begin accepting patients.
Universal Health Services’ hospital would employ 250 to 300 people when fully staffed and have an estimated payroll of $11.3 million.
The company, based in King of Prussia, Pennsylvania, operates more than 200 behavioral health hospitals as well as acute-care hospitals in the U.S.