Three physician practices affiliated with the University of Washington Medical Center will pay the largest settlement to date stemming from charges that teaching physicians illegally billed Medicare for procedures performed by medical residents, the U.S. attorney in Seattle said.
Not only is the $35 million civil agreement the largest involving such charges, but the case is the first of its kind to result in criminal convictions. In a 1999 lawsuit, a former internal auditor alleged that the groups retroactively billed Medicare and other payers for procedures performed by residents, despite having compliance programs intended to detect and prevent fraud. The whistle- blower, Mark Erickson, also accused the groups of falsifying documents, destroying evidence and fabricating audit reports. The federal government subsequently joined his suit.
Erickson's lawyer, Stephen Meagher of Phillips & Cohen, said there's a lesson for hospitals: "This case demonstrates the vulnerability of compliance programs. Merely having one does not guarantee correct Medicare billing, and (the case) shows you can destroy a compliance program from the inside out." In settling, the Association of University Physicians, Children's University Medical Group and University of Washington Physicians, which together represent hundreds of doctors, did not admit guilt. The groups could not be reached for comment by deadline. Earlier this year, the former chiefs of neurosurgery and nephrology at the Seattle medical center were convicted of obstruction and mail fraud, respectively.
HHS' inspector general said that as of April 30, 19 hospitals have settled such investigations for a total of $129.1 million and 16 hospitals have settled similar allegations for $94.8 million, bringing the total to $223.9 million.