U. pays $30 mill. settlement for alleged Med Center overbilling

Glasgow, KY In December of 1995, the Hospital of the University of Pennsylvania agreed to pay $30 million to the United States Department f Health and Human Services to settle claims alleging that certain Medical Center physicians overbilled Medicare for patient care. The settlement came as part of an extensive audit of HUP and the Clinical Practices of the University of Pennsylvania. The audit spanned the years 1989 to 1994. In addition to the $30 million payment, the University promised to implement a corrective action plan designed to prevent the reoccurrence of such incidents. CPUP physicians allegedly violated the Medicare billing code in a number of ways. The audit uncovered that doctors had not only overbilled Medicare, but had also provided inadequate documentation of their services. The audit also found that the physicians had submitted bills for work done by residents. Medicare does not allow billing for residents' work, as their salaries are already subsidized by the federal government. In January, Health System Chief Executive Officer William Kelley denied any wrongdoing on the part of CPUP physicians alleggedly violated the Medicare builling code in a number of ways. The audit uncovered that doctors had not only overbilled Medicare, but had also provided inadequate documentation of their services. The audit also found that the physicians had submitted bills for work done by residents. Medicare does not allow billing for residents' work, as their salaries are already subsidized by the federal government. In January, Health System Chief Executive Officer William Kelley denied any wrongdoing on the part of CPUP physicians. Kelley added that the ongoing reform within the Medical Center was not spurred by the Medicare claims. "Even before the audit began, we had an intensive program to enhance the reliability of CPUP's billings systems to ensure compliance with billing requirements," Kelley said in a statement. Medical Center spokesperson Lori Doyle emphasized, "We paid the $30 million, (but that) doesn't mean that we are guilty." CPUP paid the $30 million in early January and implementation of the corrective action plan began soon after. The plan consists of four parts: the centralization of billing operations, mandatory annual financial audits, intensive training of physicians and billing personnel on the correct Medicare procedures and the establishment of two telephone hotlines devoted to billing problems. Though it is too soon to tell if the plan has had any effect on CPUP's systems, Doyle said implementation is moving along as planned. Former Chief of General International Medicine, Jhn Eisenberg said the overbilling was not an organized attempt to get more money from unsuspecting patients and insurance companies. He speculated that the errors are due to a misinterpretation of the Medicare billing code. "The real irony of the situation is that the Medicare commission came out with a new set of rules a week before the Penn investigation," he said. Eisenberg added that ambiguity and confusion on the part of health care providers has led billing personnel to create their own rules when dealing with Medicare claims. A new audit by Pennsylvania Blue Shield arose out of the Medicare claims. It will address the same issues, but is being conducted privately. According to Douglas Smith, vice president for corporate affairs at Blue Shield, the insurance company played a role in the first audit because, as a federal Medicare carrier, the company serves as a "contractor" to the federal government. Smith explained that this audit will only involved those claims relevant to the Blue Shield private insurance company, while the previous one dealt with Medicare claims only. Smith also said the Blue Shield audit was not spurred by the federal investigation. "Basically, Blue Shield was aware of the potential for problems but was also aware of the federal audits going on, so we stepped back until they were finished," he said. Such discrepancies can range from a slight overbilling to a charge from a doctor patients have never visited. Smith said that when Blue Shield receives a tip from a source, it can instantly check its dta bases to try to reconcile the discrepancies. If this doesn't work, the company will decide whether or not to probe further into the situation. "Some things are obviously worth looking into," he said. "You can only have your appendix out once."