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.
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.
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.
For example, she mentioned a case in which the hospital billed for an anesthesiologist to be in two operating rooms simultaneously, for a period of 42 minutes.
"This indicates that the same doctor was in two places at once," the consultant, Linda C. Hoffman, wrote in a Sept. 19, 2001, letter to then-Maryland General President Timothy D. Miller.
"This is an error that could definitely be a fraud/compliance issue," Hoffman wrote.
Referring to what she described as "grave errors committed by the billing department with regard to Medicaid billing" for women in labor, Hoffman wrote, "All of these errors, I have been told, have been present in the MGH billing system going back many years."
As part of the whistleblower suit, a subpoena was issued to Maryland General seeking detailed records of the anesthesia department dating back to 1992. Those records included the schedules for all operating rooms, the medical records of all surgical patients, schedules for the anesthesiologists and billing records.
Audits prompted by Dorin, including the Hoffman report, also turned up billing questions in other areas of the hospital. A "corporate compliance audit," for instance, found evidence of overbilling to Medicare for a drug called epogen used to treat dialysis patients.
According to an audit summary obtained by the newspaper, the amounts billed for the drug did not coincide with the amounts administered to the patients.
The concerns about the billing practices raised by Dorin also prompted a series of education programs for Maryland General anesthesiologists, including a session held June 6, 2002.
"Most anesthesia record documentation is woefully inadequate to pass an audit," a report presented to the physicians at the June 2002 meeting stated.
According to an agenda for that meeting, the issues to be discussed included the practice of physicians "automatically adding minutes to start and stop times" and a computer software program that was automatically and "improperly rounding up" the time spent on each case.
According to one of the people who attended the meeting, the doctors were advised that too many of them were recording their times with similar numbers.
"We can't have all your times ending in zeroes and fives," the doctors were warned.
Hoffman, in her letter to Miller in 2001, warned that the hospital could be facing serious compliance problems with the regulations of the federal Health Care Financing Administration.
"I cannot stress enough the importance of adhering to the rules set by HCFA in billing anesthesia. It must include proper record keeping and proper billing," Hoffman wrote.
In response to the critical state inspection reports concerning its lab, Maryland General late last week filed a 244-page plan of correction that includes steps already taken, such as the hiring of an outside consulting firm to run the lab on an interim basis and the appointment of a new medical director for the facility.
An interim report from the consulting firm concludes that the laboratory was not understaffed but that a high turnover rate and poor management led to problems.
"This turnover combined with low pay rates and poor management made it difficult to retain and recruit technologists," the report states, adding that the staff was not properly trained.
The corrective action plan notes that new tests have been offered to all those patients who received the suspect test results.
Three laboratory officials have resigned along with Miller, who stepped down as the hospital's president and chief executive officer, because of the lab problems.