More Scandals in For-Profit Medicine

Universal Health Services is a holding company that provides behavioral health services. Its Oklahoma subsidiary, Shadow Mountain Behavioral Health System, is now being penalized by loss of Medicaid and Medicare contracts. The current accusations against the parent and subsidiary include:

  • Accounting irregularities at the parent company
  • At the subsidiary, inflating reimbursements by
    • Holding patients longer than necessary and
    • Holding patients against their will.

The accounting investigation has been expanded to include the FBI and Department of Defense. The coverage notes that Shadow Mountain has the opportunity to correct the defects to satisfy Medicare, but that the withdrawal of Medicaid contracts cannot be appealed or reversed.

As I noted in an earlier post, both my own prior research for commercial clients and some third party studies suggest that private non-profit medical facilities provide superior care. They tend to be leaders in investment in new technology and research, while public facilities have budgets that are constrained by politics, and for-profit facilities are constrained by the need to maximize profits.

Where you go for care effects the quality of care you get.

Unfortunately, as should be well known by now, medical misdeeds aren’t limited to for profit hospitals. Five NJ doctors have been charged this week related to an illegal kickback scheme. They were receiving payments for steering patients to one specific medical imaging center. (2)



  1. Ayla Ellison, “UHS hospital in Oklahoma faces Medicare termination on heels of Buzzfeed News investigation,” Becker’s Hospital CFO Report, 12 June 2017.
  2. Tom Davis, “NJ Doctors Busted In Statewide Bribery Kickback Scheme,” The Patch, 13 June 2017.

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