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U of C Hospitals faces civil suit

The U of C recently made Chicago Tribune headlines with news that the U.S. attorney’s office in Chicago filed a civil lawsuit against the University, the University of Chicago Physicians Group, and the University of Chicago Hospitals, alleging that the defendants overbilled Medicare and Medicaid.

Initiated in 1996, the suit claims that many of the outpatient Medicare claims for physician services submitted from 1991 to 1997 should actually have been billed at a lower rate. The University denies the allegations, stating in its response that the federal government is applying new requirements that were not in effect when the services were billed.

The Hospitals’ billing practices first came under scrutiny as part of a Department of Health and Human Services (HHS) initiative called Physicians at Teaching Hospitals (PATH). Since 1995, HHS has launched PATH audits at more than 50 of the nation’s 125 major academic medical centers. The U.S. attorney’s office has brought charges against a number of universities, with several settling multimillion-dollar complaints out of court. In the first and largest such agreement, the University of Pennsylvania settled for $30 million. More recently, several other medical centers have settled for much smaller sums; two more settled for nothing.

PATH audits have focused on inpatient billing practices, and the U of C has not been charged with submitting false claims connected to its inpatient billings.

The investigation into the Hospitals’ outpatient billings began after a private citizen filed a qui tam suit claiming those billings were false and fraudulent.

“We believe that suit is totally without merit,” wrote Hospitals CEO Ralph Muller and Biological Sciences Division Dean Glenn Steele in a letter to the Chicago Tribune.

After studying the PATH audits, the General Accounting Office, a government research agency, noted in a 1998 report that Medicare regulations were not always clear and had sometimes been misinterpreted—and that the medical community believes the government “is coercing settlements from teaching institutions through threats of federal lawsuits.”—K.S.

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