Universal Health Services disclosed to investors Monday a jury verdict with $500 million of punitive damages against the for-profit health system’s subsidiaries—though it hopes to bring down that number substantially.
The decision, also announced Monday by plaintiff Saint Mary’s Health Network, an affiliate of Prime Healthcare, totals more than $510 million of damages including about $4.7 million of compensatory damages to be paid to the plaintiffs.
The jury found that defendants had deliberately and unlawfully solicited Saint Mary’s physicians and employees, orchestrated a mass resignation event, breached contracts and, as a result, disrupted patient care and existing patient relationships, according to that release.
A trial on the lawsuit filed in Washoe County, Nevada, back in 2021 concluded Sept. 26. It listed UHS’ wholly owned UHS of Delaware administrative services subsidiary and the 50%-owned Pinnacle Management Group as defendants.
Also listed alongside the companies as defendants were “former Saint Mary’s leaders who sabotaged the network from within,” Saint Mary’s wrote in its announcement. The system said it presented evidence that the effort had begun in 2019 and continued through the COVID-19 pandemic, that the individual defendants had destroyed “secret text messages” related to the effort and had “nearly destabilized” its Saint Mary’s Regional Medical Center.
“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,” Derrick Glum, CEO of Saint Mary’s Health Network, said in the release. “The verdict restores justice and allows our hospital’s mission to serve our community with compassion and dignity to endure.”
UHS, in a Form 8-K filed with the Securities and Exchange Commission, said it intends to challenge the verdict in post-judgment proceedings and on appeal.
It also downplayed the nine-figure punitive damages, pointing to Nevada law that limits punitive damages to three times the amount of compensatory damages awarded to the plaintiff (in cases exceeding $100,000 compensatory damages, excluding certain exceptions outlined in the statute), or about $14 million. It also said a recent Nevada Supreme Court precedent “could further reduce” those punitive damages.
That said, UHS acknowledged it is “uncertain” just how much it will be required to pay out.
“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,” UHS wrote in the filing.
King of Prussia, Pennsylvania-based UHS reported $15.8 billion of net revenues as well as $1.1 billion net income attributable to the company across 2024. It operates 29 inpatient acute care hospitals, 331 inpatient behavioral health facilities, dozens of other outpatient sites and other businesses. In second-quarter financial results released in July the company raised its 2025 earnings forecast on stronger-than-expected numbers.
Reno, Nevada-based Saint Mary’s Health Network is a single-hospital system with a medical group and primary care locations. In 2012, it joined the 51-hospital Prime Healthcare, which bills itself as a rescuer of struggling local hospitals.
“This case is about more than one hospital, it is about accountability and integrity in American healthcare and we commend the judicial system for bringing truth to light,” Prem Reddy, M.D., founder, chairman and CEO of Prime Healthcare, said in the release. “This verdict is a victory for patients and communities, affirming that accountability and integrity are the foundation of healthcare.”