UF settlement softens Medicare liability

By BARRY KLEIN

© St. Petersburg Times,
published August 28, 2001

During much of the 1990s, federal prosecutors threatened to slam the University of Florida medical school with tens of millions of dollars in penalties for what they said were deliberate Medicare overbillings.

UF officials said Monday the school has agreed to pay $8.6-million to end the government investigation. The settlement does not include another $2-million the university already has spent on legal bills.

The decision to settle was the best resolution to a difficult situation, said College of Medicine dean Kenneth Berns, who said he was told the government may have considered penalties in excess of $65-million.

The settlement ends eight years of litigation that began with accusations from a whistle-blower that UF faculty doctors were improperly billing Medicare for care provided by lesser-skilled resident physicians.

A second whistle-blower later raised separate allegations about billing for clinical pathology work at the college. Investigators also looked into allegations that other federal health care agencies, including the Department of Veterans Affairs, were overbilled by faculty physicians.

Berns said Monday that in no instance did UF doctors bill for patient services that were not actually performed.

The $8.6-million represents charges the university either could not document or conflicted with the government's interpretation of billing regulations, UF officials said.

"These are very complicated regulations," Berns said. "They're worse than the IRS."

At one point, prosecutors apparently considered criminal charges. A federal grand jury reviewed payroll and patient records and listened to witness testimony.

No charges were ever brought, but the investigation helped run up UF's legal bill.

The university has paid at least $1-million to a Washington, D.C., law firm that specializes in Medicare litigation. It paid Tallahassee attorney Murray Wadsworth almost $400,000 to help with the grand jury investigation.

UF officials say public money will not be used to pay for the settlement or the legal expenses. That money will come from the Florida Clinical Practice Association, which administers the medical school's physicians pay plan.

The plan's revenues are generated from fees charged by UF doctors. That includes faculty physicians who supervise medical students but who are supposed to render patient care when they submit claims to Medicare.

Allegations that faculty physicians sometimes weren't even in the building when care was provided helped prompt the UF investigation. But a 1999 memorandum indicates the practice continued even when settlement negotiations were well under way.

The memo was sent to "all surgical faculty" by Timothy Flynn, the surgical service chief at the VA Medical Center, Gainesville. The VA hospital is across the street from Shands at the University of Florida, home to UF's medical school. Many of UF's faculty physicians practice in both hospitals.

"It has come to my attention that some of you are not abiding by the absolute rule that says you cannot be attending on a case at the VA and on a case at Shands at the same time," Flynn wrote.

"This means that it is illegal, and a clear case of fraud, if you are listed as the attending and the surgical times at the VA and Shands overlap. I would caution you to be very careful about this as the ongoing investigation at the VA is looking into this very aspect of our practice."

UF is not the only university whose medical school billing practices have come under government scrutiny in recent years.

In 1995, the University of Pennsylvania paid a record $30-million to settle allegations that its doctors had submitted $10-million in false Medicare claims from 1989 to 1994. The University of California settled a civil action this year for $22.5-million.

As part of the UF settlement, university officials have agreed to beef up their internal auditing and to educate doctors and staff members on proper billing procedures.

"We're going to bring everyone in for lectures and video presentations," Berns said. But he said no amount of education will completely eliminate the problem.

"The regulations are actually getting more complicated," he said.

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