February 5, 2001
UC, Department of Justice announce Medicare billing settlement
The University of California and the U.S. Department of
Justice announced Friday, February 2, that they have reached a settlement agreement
that ends a long-standing dispute over Medicare billing documentation practices.
Under terms of the settlement, the university's five schools of medicine will refund
a total of $22.5 million to the federal government in connection with documentation
of Medicare billings between 1990 and December of 1998. The five UC medical schools
are located at Sacramento (UC Davis), San Francisco, Los Angeles, Irvine and San
Diego.
"The university reached the settlement with the federal government as an economic
measure," said John Lundberg, deputy general counsel to the UC Board of Regents. "Litigating
the dispute would have cost many additional millions of dollars on top of the approximately
$15 million already spent on outside accountants, auditors and other consultants
during the course of the audit," he added.
No evidence of fraud was found in connection with the billing documentation.
The settlement was reached after audits of Medicare billing performed under the Physicians
at Teaching Hospitals (PATH) project of the Office of the Inspector General within
the U.S. Department of Health and Human Services.
The PATH project has initiated audits at more than 40 university teaching hospitals
nationally. UC is one of a number of institutions across the nation that has negotiated
settlements. The largest settlement to date, $30 million, was reached the Office
of the Inspector General and the University of Pennsylvania.
For more than a year, the university had negotiated with federal officials over allegations
that teaching physicians at UC's five teaching hospitals had not documented Medicare
billing in accordance with Medicare regulations. The university contended that the
regulations were confusing and vague.
"It is important to point out that at no time was there any question of the
high quality of patient care provided at the five medical centers of the University
of California," Lundberg said. "The audits, and the settlement, were concerned
solely with administrative procedures and billing practices."
Lundberg added: "Federal officials, including two former secretaries of Health
and Human Services and the general counsel to HHS, have admitted that the guidelines
regulating Medicare billing have been both complex and vague, creating a great deal
of confusion over the years on the part of providers."
In an effort to keep teaching physicians informed of changing Medicare billing policies
and guidance, the university in October of 1996 issued new "Compliance Guidelines"
to ensure UC medical faculty were aware of regulations issued in July of that year
by the Health Care Financing Administration on Medicare billing.
The July 1996 the Health Care Financing Administration regulations were the latest
in a series of attempts by the federal government over a 30-year period to clarify
what is permissible and not permissible in Medicare billing. Among other things,
the 1996 regulations made it clear that in certain instances, a teaching physician's
presence is required when care is being provided by residents.
UC conducts the largest health science and medical training program in the nation,
with more than 12,000 students enrolled in medicine, nursing, public health, pharmacy
and other health professions.
