Maryland General Hospital faces a state Medicaid fraud investigation arising out of the severe problems found in the hospital's laboratory.

The Maryland attorney general's office is examining whether the hospital fraudulently billed the state Medicaid program for lab tests that employees knew might be inaccurate.

Maryland General also is being sued by a former top doctor there who says the 243-bed Baltimore facility routinely overcharged the federal Medicare program for anesthesiology services.

Several state government sources confirmed that the Medicaid fraud probe is under way.

Kevin Enright, a spokesman for Attorney General J. Joseph Curran Jr., said he could neither confirm nor deny the existence of an investigation.

Hospital spokesman Lee Kennedy issued a statement last night acknowledging lab billing issues, but it did not address the lawsuit.

"As we examined issues related to the validity of test results at Maryland General Hospital over the last two months, we are also examining billing matters related to these tests," the statement said. "Payers may have been billed for - and Maryland General reimbursed for - test results that were potentially invalid.

"Our focus has been on identifying and retesting patients and on improving laboratory operations. However, we are actively examining billing issues related to these tests. It is our desire and intent to work with private and government payers to ensure that any billing issues are resolved equitably."

The Medicaid probe was initiated after state health inspectors, prompted by the complaint of a former Maryland General lab technician, found a laboratory operation "rife with equipment malfunctions."

Inspectors found that the hospital sent out HIV and hepatitis test results to 460 patients even though instrument readings indicated the results might have been inaccurate.

'Whistleblower' suit

The lawsuit against the hospital was filed in 2002 by Dr. Adam F. Dorin, who headed Maryland General's anesthesiology department in 2001 and 2002.

Suing under a federal "whistleblower" law, he charged that Maryland General officials "routinely submit false claims for the services of anesthesiology professionals."

Though the file in the suit remains sealed, in conformance with the whistleblower law, records obtained by The Sun established that it was filed by Dorin.

Now serving as the medical director of an ambulatory surgical clinic in California, Dorin said when contacted that he was barred from giving details of the suit but issued a brief statement in which he described working at the hospital as "like living a bad dream."

"I can identify with the laboratory workers who were frustrated with harassment and threats for simply trying to fix problems and make things better for their patients.

"I was raised to be good, and do good for others, and I expected honesty and integrity on the part of the Maryland General Hospital administration when I pointed out their internal problems. Their failure to do the right thing directly led to the filing of the case," Dorin said.

Raising concerns

Records obtained by the newspaper show that an outside consultant brought in by Dorin to review the anesthesiology billing records in 2001 said that she had "a grave concern" after examining them.