University of Texas Health Science Center at San Antonio has agreed to pay $17.2 million to settle a whistleblower lawsuit filed by a former employee who alleged the school improperly billed Medicare for residents' services.
The settlement, signed June 12 after one year of negotiating, includes $9.8 million in overpayments and $7.4 million in interest and other charges.
UT Health Science Center did not admit wrongdoing or liability as part of the settlement. In a prepared statement, the medical school said it chose to settle because the lawsuit would have taken too much time and money to litigate.
The case was not part of the federal Physicians at Teaching Hospitals, or PATH, audits currently going on at about 50 medical schools nationwide.
PATH, which began in 1995, examines how teaching hospitals bill federal health programs for services performed by residents.
UT was one of 16 medical schools HHS let off the hook in 1997 (Feb. 9, p. 6). HHS told the schools by letter that they would not undergo PATH audits because their fiscal intermediaries had not issued clear billing guidelines to them.
UT Health Science Center also had implemented new compliance and training programs between 1995 and 1996 in light of more complex billing regulations, said Judy Wolf, vice president for university relations.
The whistleblower who filed the complaint is the former director of the faculty practice plan that was at the center of the lawsuit, Wolf said. The plan includes all the school's clinical faculty, or several hundred physicians.
At issue in the lawsuit against UT was whether the medical school practice plan's documentation of services provided to Medicare and Medicaid patients between 1990 and 1995 included the words "reviewed and agreed" followed by the supervising physician's signature.
The school contends that while faculty physicians signed the notes of the resident physicians' work, they did not always write "reviewed and agreed."
"Those three words constitute the difference between sufficient documentation and insufficient documentation," the school said in its statement. "The lack of those three words adjacent to the faculty physician's signature cost our physicians millions of dollars."
The language required on paperwork since 1995 has become more complex, Wolf said.
About 2% of the school's $511 million in billings during that period were found to be incomplete, Wolf said.
All patient care was delivered and quality was not in question, the school's statement said.
The settlement payments will be made using the medical school's funds derived from physician income that comes from the faculty practice plan, not from state appropriations, Wolf said. Roughly one-third of the medical school's budget comes from state funding.
In a related matter, Georgetown University in Washington is in the middle of a PATH audit.
A spokeswoman for Georgetown University Hospital said the school has not settled with HHS and declined to say whether negotiations are under way.
To date, four medical schools and their related teaching hospitals in two states have paid a total of $68 million in overpayments and damages to settle PATH audits.