Doctors at California University Pay $2.2M to Resolve Allegations Involving Fraudulent Billings to Medicare

December 2, 2004

A group of faculty practice corporations affiliated with California’s Loma Linda University has paid the United States $2.2 million to resolve allegations that they submitted false claims to Medicare, United States Attorney Debra Yang announced. The settlement was paid after 20 corporations reached an agreement to conclude a federal fraud investigation.

For teaching hospitals such as Loma Linda, Medicare rules allow reimbursement for services performed directly by 1) members of the clinical faculty, or 2) residents and interns under the faculty member’s direct supervision. The Department of Health and Human Services, which administers the Medicare program, undertook a nationwide initiative – known as the Physicians at Teaching Hospitals, or PATH, initiative – to review compliance with these rules.

As a result of this review, investigators at HHS reportedly determined that the faculty practice corporations submitted claims for services directly performed by faculty members, when in fact there was insufficient evidence that the faculty member, as opposed to residents or interns, had been personally involved in performing the services. Investigators also found evidence that the corporations submitted “upcoded” claims, meaning claims for greater levels of service than what had been actually documented in the patient medical records.

The settlement was negotiated by the United States Attorney’s Office for the Central District of California, which received investigative assistance from the Office of Inspector General for the Department of Health and Human Services. The Office of Counsel to the HHS Inspector General also participated in the negotiations.

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