UC Medical Centers to Pay $22.5M to Settle Medicare Fraud Charges
The University of California has reached an agreement with the U.S. attorney's office in San Francisco to settle allegations that doctors at UC's five teaching hospitals improperly billed Medicare, the Los Angeles Times reports. While the university "denied any wrongdoing," under the terms of the settlement, the medical centers at UCLA, UC-Irvine, UC-San Diego,
UC-San Francisco and UC-Davis will pay a total of $22.5 million in exchange for the government dropping its lawsuits against the university. The investigation stemmed from an HHS "crackdown ... on teaching hospitals that allegedly billed the government for faculty physicians' services [for Medicare patients] when medical residents actually did the work," the Times reports. After two former UC employees filed whistle-blower lawsuits alleging Medicare fraud, federal auditors examined hundreds of UC hospitals' files that involved "insurance claims by faculty physicians who did not personally perform the services between 1994 and 1998." Initially, the HHS Office of the Inspector General "demanded" that the university pay more than $200 million. But federal officials agreed to a smaller settlement after auditors found nothing to substantiate the claims of "widespread" Medicare fraud. The five hospitals have 30 days to pay the fine (Weiss, Los Angeles Times, 2/3).
Discussing the settlement, university officials said they agreed to the terms to avoid future audit and litigation expenses, which so far have cost the university $15 million. The $22.5 million settlement represents more than 3% of the $600 million that the five hospitals billed Medicare for between 1994 and 1998. John Lundberg, deputy counsel to the UC Board of Regents, said, "We believe this is a relatively nominal settlement. We question whether this is an appropriate public policy and whether federal dollars are being spent inappropriately." Eight other teaching hospitals nationwide have settled with the government as part of HHS' crackdown, which has drawn criticism from these institutions because they believe that the regulations governing Medicare claims and teaching physicians are vague and open to interpretation (Rapaport, Sacramento Bee, 2/3). The Times reports that UC officials "chalked up most of the discrepancies [found by auditors] to arcane rules and to the give-and-take that comes with billing hundreds of millions of dollars a year in medical care." Howard Daniels, a health care attorney who has defended hospitals in similar cases, said, "[The UC] hospitals got caught between a very ambiguous regulation that the government had never clarified before, and the possibility of being excluded from Medicare. So they really have not much choice but to settle. You can't even assume from the dollar amount that they even did anything wrong" (Los Angeles Times, 2/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.