Sound Physicians settles in Medicare overbilling case

Sound Physicians, a large Tacoma-based hospitalist company, agreed to pay $14.5 million to settle the allegations that it overbilled Medicare and other federal health programs.

The federal government alleges the company “knowingly submitted” claims on behalf of its employees for higher levels of service than were documented in patient records between 2004 and 2012, according to a U.S. Justice Department news release. Sound Physicians has physicians working in hospitals and post-acute facilities in 22 states.

The Justice Department's investigation was triggered by a whistle-blower complaint filed by a former employee under the False Claims Act. The employee, Craig Thomas, will get $2.7 million of the settlement.

"We cooperated fully with the government when we were made aware of the allegations in the civil lawsuit," Steven McCarty, Sound Physicians general counsel, said in a statement. "In agreeing to settle this case, we did not concede any liability or wrongdoing. And there was never any question regarding the high quality of care Sound Physicians delivers in more than 1 million patient encounters it conducts each year."

McCarty said that the settlement sum is 1.7% of the amount Sound Physicians submitted for Medicare reimbursement during the period at issue.