Saint Mary’s Health Network earned a big win in court after a jury awarded it half a billion dollars in its case against Universal Health Services.
A jury in Washoe County awarded the Prime Healthcare affiliate $510 million after it found Universal Health Services liable for fraud against Saint Mary’s during the COVID-19 pandemic. The verdict included punitive damages.
“This verdict affirms that the weaponization of corporate power, betrayal of physician trust, theft of proprietary information, and reckless endangerment of patients will not be tolerated,” said Saint Mary’s Health Network CEO Derrick Glum in a statement. “The verdict restores justice and allows our hospital’s mission to serve our community with compassion and dignity to endure.”
Universal Health Services is a healthcare management company that runs more than 400 facilities. UHS has undergone a huge expansion in Reno-Sparks in recent years, including the construction of the Northern Nevada Sierra Medical Center and several ER facilities.
The Reno Gazette Journal has reached out to UHS for comment.
Saint Mary’s case against UHS centers on pandemic incident
The case of Saint Mary’s Health Network, which includes Saint Mary’s Regional Medical Center in Reno, centered on accusations against UHS of “fraud, malice, and oppression in a coordinated scheme” perpetrated during the COVID-19 pandemic.
The allegations from Saint Mary included stealing confidential trade secrets, soliciting Saint Mary’s physicians and employees and fueling mass resignations, breach of contract, and disrupting patient care and relationships by diverting them from Saint Mary’s to UHS services and entities.
Evidence presented by Saint Mary’s included internal emails and text messages from UHS executives.
The incident led to more than $200 million in losses for the longtime healthcare provider in Reno, according to Saint Mary’s. Saint Mary’s Health Network was acquired by current owner Prime Healthcare in 2012.
“For over 117 years, Saint Mary’s has been a trusted institution,” said Dr. Sunny Bhatia, Prime Healthcare president. “Patients and communities should always be at the heart of medicine, and this verdict reinforces that trust and care must never be compromised.”
UHS responds to half-billion-dollar verdict in SEC filing
Universal Health Services responded to the verdict on Friday, Sept. 26, through a filing with the Securities and Exchange Commission.
In the 8-K filing, which is filed to inform investors about a material event that could affect a publicly traded company, UHS stated that the jury rendered a verdict against it for $4.7 million in compensatory damages.
UHS added that it expects the half-billion-dollar verdict to be significantly reduced.
“We expect the punitive damages to be reduced to a maximum of approximately $14 million,” UHS said in its SEC filing.
“We also believe that recent Nevada Supreme Court precedent could further reduce the amount of punitive damages.”
UHS added that it is evaluating all legal options and plans to challenge the verdict and appeal the case. Failing to do so would result in a significant financial impact against the company, according to UHS.
“We are uncertain as to the ultimate financial exposure related to this matter and we can make no assurance regarding its outcome, or the amount of damages that may be recoverable after post-judgment proceedings and appeals,” UHS wrote in its filing.
“If we are unsuccessful in reversing the verdict, or significantly reducing the level of damages, or we are required to post a substantial bond pending appeal, this matter could have a material adverse effect on the financial condition of the Company.”