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University of Pittsburgh Hospital Network Paying $2.5M to Settle Overbilling Claims

PITTSBURGH ― The University of Pittsburgh Medical Center has paid $2.5 million to settle some claims in a federal whistleblower lawsuit accusing the hospital network of overbilling government insurance programs for neurosurgery.

UPMC, Pennsylvania’s largest private employer with 60,000 workers, didn’t acknowledge wrongdoing in the settlement announced Wednesday by the U.S. Attorney’s Office in Pittsburgh. The nonprofit reported $12 billion in revenue last year.

The federal government sued last year after two doctors and another whistleblower sued in 2012 alleging various kinds of inflated billing. Some of the whistleblower claims remain and will be pursued privately, and UPMC said it would defend those claims “vigorously.”

The claims settled primarily involve the way UPMC billed for surgeries in which some of its doctors acted as first assistants or teaching assistants on surgical procedures. Under regulations governing Medicare, Medicaid, Tricare/Champus and other federal programs, those assisting physicians must spend a certain amount of time or perform specific roles during surgery, otherwise UPMC cannot bill for their services.

The lawsuit claimed UPMC billed for the assistant services when those doctors didn’t meet the criteria and sometimes even when they weren’t present at all.

UPMC “created a culture where money ― not medicine ― drove the decision-making process,” the lawsuit said.

The lawsuit didn’t say how much money the overbilling allegedly cost the government programs or how the feds arrived at the $2.5 million settlement figure. UPMC didn’t address that issue in its statement.

But the lawsuit also alleged UPMC was a “repeat offender” with regard to billing for surgeries performed by residents, fellows or physician assistants when no teaching physician oversaw the procedures.

UPMC paid the government $17 million in 1998 after an audit by the U.S. Department of Health and Human Services uncovered that specific type of overbilling, but this earlier settlement “obviously did not constitute a sufficient deterrent to forego its clearly fraudulent billing practices,” the lawsuit said.

UPMC issued a statement saying Wednesday’s settlement “wraps up” the government’s investigation of billing to Medicare, Medicaid and Tricare.

“UPMC learned that some of the billing these entities submitted did not accurately reflect the services performed, and resulted in more reimbursement than was due. The physicians themselves did not submit these bills,” the statement said. “UPMC discovered the billing discrepancies, disclosed the errors to the United States Attorney’s office, conducted an internal review, and fully cooperated with the government’s review.”

UPMC has since taken steps to fix its billing process and practices.

The remaining claims to be pursued in non-government lawsuits largely concern something known as Relative Value Units. Those are numerical units that the government uses to “score” the complexity of a surgical procedure and the amount of time it requires.

Relative Value Units are also used to calculate bills for surgical procedures, and the lawsuit contends UPMC inflated or over-reported those scores to drive up its revenue and to overpay some surgeons, giving those doctors an incentive to over-report their surgical work.

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