Billing report urges more oversight at UW Medicine

After a 10-month review of billing problems in physician groups attached to UW Medicine, a panel has recommended appointing a compliance officer who answers only to the vice president for medicine affairs.

The committee, appointed by the UW Medicine Board, also urges a new “culture of compliance,” information systems upgrades and stronger governance by the UW President and Board of Regents. It said there have been significant improvements in compliance, but that more needs to be done.

Vice President for Medical Affairs Paul Ramsey, who is also dean of the medical school, commissioned the report after the University agreed to a $35-million settlement with the federal government to end a lawsuit over billing fraud in Medicare and other programs. (See “UW Pays Record $35 Million to Settle Government Bill Fraud Claims,” June 2004.)

During the investigation, two UW physicians pleaded guilty to felony charges. One admitted to obstruction of justice, the other to submitting a fraudulent bill.

There was “no evidence of a conspiracy at any level to overbill the federal government,” said William Van Ness Jr., ’66, an attorney and UW Medicine Board member who chaired the review panel. He presented the report at a July 21 regents committee meeting.

However, the report stated that the billing problems were “serious and unacceptable,” and that there was a range of errors: “innocent mistakes, negligent mistakes, reckless error and some rare instances of deliberate fraud.”

Committee Vice Chair Orin Smith, the retired CEO of Starbucks, said that during the late 1990s the overall governance and management of compliance was “inadequate,” adding “there simply wasn’t any ownership of this issue.”

UW Physicians and Children’s University Medical Group were the physician groups that were the principal targets of the federal probe. Key errors included “upcoding,” which is changing billing codes to substitute a more expensive procedure for the one actually conducted, and charging for a supervising physician’s time when only a resident was actually present.

Van Ness said there was an atmosphere of “laziness” in some departments. “We became complacent about compliance,” he said. When whistleblower Mark Erickson first raised his concerns, he was “not taken seriously,” Van Ness added. Had action been taken, “things would have been caught in time.”

The panel urged that UW Medicine instill a “culture of compliance” through more training and monitoring. “The culture is ready to make the shift,” said Smith. “People have been damaged by this affair. It has created a lot of anger.”

At the July 21 meeting, President Mark Emmert, ’75, told the regents he would have recommendations based on the report ready in the fall. Ramsey also said the report was an extremely important road map for moving forward on compliance.