More than 20 of the nation's 123 academic medical centers have been notified of the federal government's intent to audit Medicare claims submitted by their physician group practices.
The government's tenacious audit program, which could lead to billions in remuneration based on two completed audits, has upset many leaders in academic medicine, who believe that honest billing errors will be perceived and treated as fraud. At least one group, the Association of American Medical Colleges, is considering a legal challenge among other options for resolving differences with the government.
The first group of audits, initiated by HHS' inspector general's office, is part of a nationwide review of teaching physicians' compliance with Medicare billing procedures for work done by medical residents (March 11, p. 2).
The physicians targeted in this round of audits are affiliated with larger academic medical centers with larger dollar volumes of claims, according to an official with the inspector general's office who asked not to be identified. Eventually, she said, the inspector general's office intends to review physician billing practices at every teaching institution in the nation.
The inspector general's audit program became public in December 1995 when the 600-member faculty practice at the Hospital of the University of Pennsylvania in Philadelphia agreed to reimburse Medicare $10 million for alleged overpayments and pay a $20 million penalty to settle charges of fraudulent billing (Dec. 18-25, 1995, p. 17).
Recently, Thomas Jefferson University's medical faculty practice in Philadelphia became the first provider to voluntarily settle charges of improper Medicare billing by agreeing to pay $12 million (Aug. 26, p. 4).
The official with the inspector general's office said some institutions have agreed to participate in a voluntary audit program, but she declined to say which ones or how many.
In a recent teleconference sponsored by the Medical Group Management Association and the Association of American Medical Colleges, Lewis Morris, assistant inspector general for litigation coordination, said evidence suggests there is "a chronic problem" with adherence to the government's billing guidance.
But providers say the billing regulations have been ambiguous and open to wide interpretation.
"I think the major concern generally is that this is really seen as being a very unfair program in that the government is being very heavy-handed in its treatment of the institutions," said Ivy Baer, the AAMC's regulatory counsel.
At last count, the AAMC had identified 22 institutions that have received letters saying they have been selected or may be selected for an audit. The AAMC declined to identify those institutions.
A spokesman for the University of California system confirmed that it has been notified that all its medical centers will be audited. Terry Lightfoot, public information officer for the university president's office, said the audit will cover Jan. 1, 1990, through Dec. 31, 1995.
Lightfoot said federal investigators have asked the university to provide organizational charts, current bylaws and charters for each faculty practice plan, a list of all participating physicians and the physicians' Medicare identification numbers.
Robert J. Saner, an attorney with Powers, Pyles, Sutter & Verville in Washington, said if providers were to bring a suit, it would likely challenge whether Medi-care's billing requirements "established a bright-line test requiring physical presence of the teaching physician with the resident in each and every billable encounter." Saner said that's the position that the inspector general's office is attempting to enforce though the audits.