Federal law enforcement officials are going national with their Medicare fraudulent billing investigation of teaching hospitals and their faculty practice plans, MODERN HEALTHCARE has learned.
"This is a national project that's under way now," confirmed Lewis Morris, deputy chief counsel to HHS' inspector general's office in Washington, last week. "About a dozen teaching hospitals around the country have been contacted and have received preliminary notices of impending audits."
Morris said an unspecified number of the inspector general's 10 regional offices already are involved and that all 10 will be involved during the next year.
The focus of the audits and investigations is how physician members of a teaching hospital's faculty practice plan bill Medicare for their services and, specifically, for work done by medical residents. The government says hospitals already are reimbursed for the work of medical residents through Medicare payments for graduate medical education programs. Claims submitted by teaching physicians for the same work represents double billing, the government says.
A new Medicare regulation that takes effect July 1 is intended to tighten billing practices by teaching physicians (Feb. 19, p. 10).
Teaching hospitals got their first glimpse of the probe last December, when the 600-member faculty practice plan at the Hospital of the University of Pennsylvania in Philadelphia agreed to reimburse Medicare $10 million in alleged overpayments and pay a $20 million fine to settle false claims allegations (Dec. 18-25, 1995, p. 17).
At the time, the investigation was thought to be focused exclusively on teaching hospitals in the Philadelphia area. A number of those hospitals and their faculty practice plans have been contacted by the Philadelphia office of HHS' inspector general about billing audits, including 607-bed Thomas Jefferson University Hospital.
In fact, a second hospital and physician group caught in the investigation's web settled fraudulent billing charges last month, agreeing to pay a $1.2 million civil penalty.
On Feb. 26, 291-bed Montgomery Hospital Medical Center in Norristown, Pa., and three anesthesiologists agreed to pay the government $1.2 million to resolve similar false billing charges. According to HHS' inspector general's office, the hospital and physicians inappropriately billed Medicare from July 1989 to December 1992 for services performed by medical residents and failed to provide sufficient documentation for other claims.
The hospital and physicians admitted to no violation of federal law, but they also agreed to implement an internal billing compliance program to avoid similar problems in the future.
Meanwhile, HHS notified Thomas Jefferson last October that it was being considered for an audit, said Cheryl Haze Luehrs, administrator of the 430-physician faculty practice plan affiliated with the teaching hospital.
On Jan. 24, HHS informed Thomas Jefferson that it had been selected for an audit, and hospital and physician representatives met with HHS officials on Feb. 6 to discuss the process, Luehrs said. At the Feb. 6 meeting, HHS gave the providers the option of hiring their own auditors or relying on the government's auditors.
"We decided to retain our own independent auditor because we thought it would go more quickly," Luehrs said.
The next step is meeting with HHS officials later this month to discuss the scope of the audit, Luehrs said.
It now appears that Thomas Jefferson's experience may be repeated at teaching hospitals across the country.
"We believe the billing problem is quite large and endemic wherever medical residents are providing services," Morris said. "We're starting with teaching hospitals because they have a high concentration of residents."
Executives at the Association of American Medical Colleges in Washington didn't respond to an interview request.