Universal Health Services Inc., of King of Prussia, said Friday that Pennsylvania officials had demanded that seven of its mental hospitals return $4 million to the state in fiscal 2011 payments made to the hospitals to compensate for losses on Medicaid and uninsured patients.

The demand was made in a late September letter from the Pennsylvania Department of Human Services, UHS said in its quarterly filing with the Securities and Exchange Commisssion.

State officials on Friday said the letters went to about 40 of roughly 200 hospitals eligible for the payments, but did not say how much money was demanded back overall.

Federal law requires that state Medicaid administrators make so-called "disproporatate share" payments to hospitals that serve a large number of Medicaid and uninsured individuals.

UHS said it is contesting the repayments because it thinks the calculation methodology is "inaccurate and conflicts with applicable federal and state laws and regulations."

The company, which is the nation's largest operator of mental health facilities, said that if the state were successful in recouping the money for fiscal 2011 it could make the same demand for the next three federal fiscal years.

UHS has eight mental health facilities on the state's list of psychiatric hospitals eligible for disproportionate share payments, including Fairmount Behavioral Health System and Friends Hospital in Philadelphia.