Georgetown University Medical Center in Washington has paid $5.3 million to settle the latest case in the ongoing Physicians at Teaching Hospitals, or PATH, investigation conducted by HHS' inspector general's office.
The hospital did not admit any culpability, but it became the fifth university medical center to settle in probes of physician billing practices at academic medical centers.
About 50 hospitals have been audited since PATH surfaced in 1995. Four have been cleared of any wrongdoing, and five have settled with the inspector general's office for a total of $73 million. A spokeswoman for the inspector general's office said about 30 other PATH audits are pending.
In the audits, investigators review how doctors at teaching hospitals bill Medicare for work that interns and residents perform. To qualify for reimbursement under compliance guidelines for Medicare Part B, staff physicians must be present to supervise doctors in training and must document their efforts.
Before the inspector general's office began the audits in 1995, the requirements were not strictly enforced. Some physicians at teaching hospitals routinely billed for services they didn't perform or supervise and often submitted those bills without proper documentation.
"We have an obligation to ensure that the government and Medicare patients are actually receiving what is paid for through the Medicare program," said Anthony Lewis, U.S. attorney for the District of Columbia.
In December 1997, at the inspector general's request, Georgetown University agreed to complete a self-audit. That review showed that medical center faculty billings were submitted without documentation of staff physician involvement, Lewis said in a written statement.
Of the settlement, Sam Wiesel, M.D., Georgetown medical center's executive vice president, wrote a letter to staff explaining that the agreement was not an admission of wrongdoing.
"We believe this settlement, which covers five and a half years of professional fee billing to Medicare, is reasonable," he wrote.
Wiesel wrote that the settlement allows the center to avoid costly, protracted litigation and resolve the issue. The university budgeted reserves in anticipation of the settlement.
The agreement also requires Georgetown to develop a compliance program that includes staff education and training.
The four other academic medical centers that have settled with the inspector general's office include the teaching hospitals at University of Pennsylvania, for $30 million; University of Pittsburgh, for $17 million; Thomas Jefferson University, for $12 million; and University of Virginia, for $8.6 million.
Another university teaching hospital investigation did not involve a PATH audit but stemmed from a whistleblower lawsuit that alleged activities similar to those involved in PATH cases. University of Texas Health Sciences Center in San Antonio paid $17.2 million to settle.
The four academic hospitals that have been cleared of violations are Dartmouth-Hitchcock Medical Center; University of Colorado; University Physicians Foundation, affiliated with Lifespan Corp. in Rhode Island; and Yale University.
In another case, Harrisburg, Pa.-based Penn State Geisinger Health System repaid $260,000 to HHS. The case resulted from a separate probe of an insurance carrier and did not include any identifiable fraud or abuse, said Alwyn Cassil, a spokeswoman for the inspector general's office.
In 1997, three healthcare associations-the American Association of Medical Colleges, the American Hospital Association and the American Medical Association-filed suit against HHS charging that applying physician billing rules retroactively was unfair and that instructions from regional carriers administering Medicare were sometimes unclear or inconsistent. The case is awaiting oral arguments later this year in federal appeals court in Los Angeles.
A federal judge in Los Angeles dismissed the suit in April 1998, saying the plaintiffs had avenues other than litigation for addressing their concerns.
Lawyer Leonard Homer of Baltimore-based Ober, Kaler, Grimes & Shriver, who is appealing the case on behalf of the healthcare organizations, said medical schools have been caving in rather than standing up for the principles involved and paying the costs of fighting the charges.
"Our claim is that for the government to come in based on invalid rules and impose the ruinous penalties of the False Claims Act amounts to a settlement under unconstitutional conditions," Homer said.
Sandy Teplitzky, a lawyer with the same firm, said the government is using the PATH audits to send a message that it is still serious about billing issues.
"I would expect all teaching hospitals are making every effort to comply," Teplitzky said. "But most of these settlements relate to things that happened years ago, and I'd argue strenuously that the rules weren't clear then and varied from region to region by carrier."
Teplitzky pointed out that 16 New England teaching hospitals were dropped from the audits in 1997 because of that variation.
The settlement won't affect Georgetown's plans to merge with MedStar Health, a seven-hospital system serving communities between Baltimore and Washington, spokesman Paul Donovan said. The parties signed a letter of intent to merge in March and are in due diligence.
Georgetown lost $62.4 million last year on total revenues of $468 million.