Accounting firm Ernst & Young, New York, will pay $1.5 million to settle allegations that it gave bad advice about clinical laboratory billing to nine hospitals, which then used the advice to unjustly enrich themselves, Modern Healthcare has learned. The company settled without admitting wrongdoing. Its announcement of the settlement with the U.S. attorney's office in Philadelphia is expected today. All nine of the hospitals previously settled lab-upcoding claims. Five of the hospitals went to Ernst & Young between 1991 and 1995 to check the legality of advice they had received from consultant Harry Metzinger, who with his partner, William Ritter, settled civil allegations related to their billing advice in 1997.
According to the U.S. attorney's office, Ernst & Young accountants approved the advice, leading to more than $900,000 in improper claims being paid. The company could have been liable for three times that amount, plus up to $10,000 per alleged false claim, which in this case amounted to roughly 150,000 claims. Ernst & Young officials could not be reached for comment at deadline. When U.S. Attorney Patrick Meehan filed the lawsuit in January, the company said its work was consistent with professional standards and coding guidelines of the time, and that it was paid a flat fee and did not benefit from increased reimbursements to hospitals. -- by Mark Taylor