Item 1.01 Entry into a Material Definitive Agreement.
As previously announced in July, 2019,
On
The Company denies the allegations raised in this matter and the settlement does not constitute an admission of facts or liability by the Company or any of its subsidiary behavioral health facilities.
Pursuant to the terms of the settlement agreements, on
•$88.1 million pursuant to the terms of the agreement with the Department of Justice ("DOJ") andOffice of Inspector General for the United States Department of Health and Human Services ("OIG"); •$28.9 million to various individual states that participated in the settlement; •$10.0 million in connection with the settlement of theU.S. ex rel Escobar v.Universal Health Services, Inc. et.al. andU.S. et. al. ex rel Correa et. al. v.Universal Health Services, Inc. et. al. matters, False Claims Act cases filed againstUniversal Health Services, Inc. ,UHS of Delaware, Inc. andHRI Clinics, Inc. d/b/a Arbour Counseling Services inU.S. District Court for the District of Massachusetts ; • less approximately$9.7 million of aggregate funds previously withheld from us in connection with the previously disclosedRiver Point Behavioral Health payment suspension and a suspension of payments to the Lawrence campus of Arbour Counseling Services associated with the Escobar matter. These previously withheld amounts are credited against the amounts due from us under the Settlement Agreements. As a condition of the settlement, the payment suspension at River Point will be lifted. The Lawrence campus of Arbour Counseling was previously closed by us.
In addition, we have also reached agreement in principle resolving all claims
for attorneys' fees and costs of the relators, as well as any individual claims
of the relators, amounting to approximately
We also paid accrued interest on the settlement amounts for certain specified
periods of approximately two months or less at annual rates of either 2.125% or
1.250% which amounted to approximately
We had previously established a pre-tax reserve in connection with the
settlements and matters discussed above, which includes related fees and costs
due to or on behalf of third-parties, which amounted to approximately
Under the settlement agreements,
In connection with the resolution of this matter, and in exchange for the OIG's agreement not to exclude the Company and its behavioral health subsidiaries from participating in the federal health care programs, the Company entered into a five-year corporate integrity agreement (the "Corporate Integrity Agreement") with the OIG. The Corporate Integrity Agreement imposes compliance, monitoring, reporting, certification, oversight, screening and training obligations on the Company and its behavioral health facilities, certain of which have previously been implemented. The Corporate Integrity Agreement contains other terms and conditions and the foregoing description of the Corporate Integrity Agreement is qualified in its entirety by reference to the full text of that agreement, which is attached as Exhibit 10.3 hereto and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
On
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The information contained in Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.1 attached hereto) is being furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
10.1 Settlement Agreement among: (i)the United States of America , acting through theUnited States Department of Justice and on behalf of theOffice of Inspector General (OIG-HHS) of the Department of Health and Human Services (HHS); theDefense Health Agency (DHA), acting on behalf of the TRICARE Program; theOffice of Personnel Management (OPM), which administers the Federal Employees Health Benefits Program (FEHBP); and theUnited States Department of Veteran Affairs (VA) (collectively,the United States ); (ii)Universal Health Services, Inc. ("UHS, Inc. ") andUHS of Delaware, Inc. ("UHS of Delaware, Inc. "), acting on behalf of the entities listed on Exhibits A and B, (collectively the "Defendants" or "UHS"); and (iii) various individuals (collectively, the "Relators"). 10.2 Form of Settlement Agreement between various states andUniversal Health Services, Inc. andUHS of Delaware, Inc. , acting on behalf of the entities listed on Exhibits A and B. 10.3 Corporate Integrity Agreement between theOffice of Inspector General of theDepartment of Health and Human Services andUniversal Health Services, Inc. andUHS of Delaware, Inc. 99.1 Press Release issued onJuly 10, 2020 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
By: /s/Steve Filton Name :Steve Filton Title: Executive Vice President and
Chief Financial Officer
Date:
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