The Johns Hopkins University announced yesterday that it will pay the government $800,000 to settle charges that it submitted fraudulent bills to Medicare.
The case stems from a series of federal audits conducted in 1997 and 1998 of hospitals affiliated with medical schools.
The investigations, known as Physicians at Teaching Hospitals (PATH) audits, looked at whether Medicare was billed for the correct level of service and whether faculty doctors were billing for work done by interns or residents.
The Hopkins' settlement was the smallest of 15, totaling some $125 million, obtained by the Department of Health and Human Services and the Justice Department.
In December 2001, the faculty group practice at the University of Maryland paid $8.3 million to settle similar claims.
Four of the two dozen or so PATH audits have affirmed that the hospital billings had been correct.
"Johns Hopkins submitted or caused the submission of false claims to the Medicare program on behalf of certain faculty physicians employed by the university without documentation to show that these physicians were personally involved in providing the services claimed by JHU," said a statement from the HHS inspector general.
"Instead, the government contends these services were actually delivered by an intern or a resident," the statement said.
Don White, a spokesman for the inspector general, said, "The $800,000 reflected recovery in excess of damages." White said the settlement agreement precluded further characterization of the payments, including spelling out what is meant by the term "damages."
In some cases, hospitals have been assessed penalties in addition to the amount of alleged overbilling.
Stephen J. Immelt, a lawyer who represented Hopkins, criticized the government's statement, and one from the U.S. attorney's office that referred to the investigation as a "Medicare fraud case."
"This is a totally inflammatory press release," Immelt said, "that bears no relation to what actually happened."
In its own statement, Hopkins said, "Despite six years of investigation, there were no significant findings, not any evidence of fraud on the part of Hopkins in either its Medicare coding or billing, but only errors one might expect in dealing with such a complex billing system.
"Although there were some points of disagreement between the university and the government concerning the interpretation of the audit results, both parties decided that it made sense to bring this long-running matter to a conclusion."
Immelt said Hopkins was unable to provide records in some cases that convinced the inspector general that a faculty physician had delivered services.
For example, he said, medical records written by a resident might note, "Dr. Jones concurred." Hopkins took that to mean Dr. Jones had performed an examination; the government said it wasn't sufficient.
Faculty physicians may bill for work they do. Residents and interns, who are part of training programs, cannot. The total amount of Hopkins' physicians billings for Medicare in 1994 - the year the audit examined - was $25.8 million.
Disputes sometimes arise when it is unclear whether a faculty doctor actually treated the patient or was simply overseeing a resident who did the treatment.
Under a 1996 Medicare ruling, a faculty doctor must be in the room when the service is performed in order to bill for it, said Robert M. Dickler, senior vice president for medical affairs at the Associations of American Medical Colleges.
Dickler said that the other main type of audit dispute comes when "I bill at Level 4, and you say it was a Level 3 service." When a doctor bills, for example, for a full physical examination after doing a quick checkup, the practice is called "upcoding."
Immelt said the Hopkins audit failed to find "a pattern of upcoding or of people not being present."
He said the case had taken so many years to resolve because it involved lengthy searches for records, meetings to interpret the records and, on occasion, periods of inaction.
Vickie E. LeDuc, a spokeswoman for the U.S. attorney's office in Baltimore, said the government had not pursued civil or criminal cases because "we got what we wanted" in the settlement.
In addition to the payment, according to the HHS inspector general, Hopkins agreed to revise its billing policies and have them reviewed by the government.
Hopkins noted that it had not been required to sign a "corporate integrity agreement," as a number of other teaching hospitals had done in settlements of audits.