Feds looking into billing by UW doctors

The FBI and the U.S. Attorney's Office are investigating whether University of Washington doctors improperly billed the federal government for millions of dollars in Medicare and Medicaid services, according to lawyers and law-enforcement officials familiar with the case.

UW officials confirmed the investigation yesterday, saying FBI agents seized hundreds of pages of billing records Nov. 22 in a raid that stunned medical-school officials.

The officials said they weren't aware of the full scope of the investigation but said it stems from allegations made by an anonymous whistle-blower.

The government also has issued subpoenas for millions of pages of billing documents, said Andrew Ziskind, the medical school's associate dean for clinical affairs.

The FBI and U.S. Attorney's Office declined comment on the investigation, which comes when U.S. Attorney General Janet Reno has made catching health-care fraud a priority.

Physicians' groups at issue

UW officials said the investigation appears to involve two physician practice groups affiliated with the medical school: University of Washington Physicians and Children's University Medical Group.

Those doctors care for patients at the UW Medical Center, Harborview Medical Center, Children's Hospital & Regional Medical Center and Veterans Affairs Puget Sound Health Care System.

"We're still not sure what information they have and what they are looking for," Ziskind said, referring to investigators. "They haven't told us what the charges are."

A law-enforcement source familiar with the case said investigators are looking at whether doctors performed certain treatments and procedures but billed for more expensive ones.

The practice is known as "upcoding" because Medicare and Medicaid treatments are billed to the government with codes. An example can be billing more common viral pneumonia as bacterial pneumonia, garnering a larger payment.

Medicare and Medicaid guarantee health insurance for the elderly and poor, respectively. Medicare alone reimburses doctors and hospitals for more than 400 diagnostic categories.

"We don't have any knowledge of upcoding or improper billing practices," Ziskind said. "This came as a total surprise to us. If there is something, we certainly want to understand and correct anything."

`Adversarial' approach

Ziskind said medical billing to the government has become inordinately complex in the past 10 years and that the two practice groups are doing everything they can to comply with regulations.

But it is hard to guarantee 100 percent compliance, he said.

Billing questions used to be resolved with year-end audits, in which the UW would return money to the government or get paid more, Ziskind said.

"And this whole process has been criminalized," he said, asserting that similar investigations have been conducted at other medical schools nationwide.

"So it took us completely by surprise," he said. "Instead of dealing with these as administrative issues and reconciling billing, this is now being approached with investigators in an adversarial way."

Ziskind said complying with the investigators' records requests is taking up so much staff time it "has the potential to impact our ability to provide good health care."

A team of lawyers, including criminal-defense attorneys, has been hired to help deal with the requests. The Seattle law firm Preston Gates & Ellis is leading the team.

1,000 doctors in the groups

U.S. Attorney Kate Pflaumer in Seattle said she couldn't discuss specific investigations, but she added, "It's hard to see how fraud is in the interests of the health of the people who are eventually paying the bills."

She said her office and federal investigators don't have the time or resources to pursue cases unless they have substantial justification.

"Health-care fraud is a major priority of this administration and this Justice Department," Pflaumer said. "But that has not in any way lowered the standards for evidence which justifies opening an investigation or pursuing a case."

UW officials said they don't know the whistle-blower's identity.

Ziskind said he wished the person had come to management first.

The two practice groups include about 800 doctors in University of Washington Physicians and 200 in Children's University Medical Group.

"We don't know who's being looked at," Ziskind said.

The clinical practices allow the doctors to supplement their state wages, which are much less than they could earn in private practice, said L.G. Blanchard, spokesman for the UW Medical Center.

"Through ongoing oversight and education, we work diligently to comply with all federal, state and insurance-carrier billing and medical documentation requirements," Blanchard said. "The complexity of these requirements has increased markedly in recent years, as have our efforts to comply."

Assistant U.S. Attorney Susan Loitz, who handles fraud in the office's criminal division, is heading the investigation.

The government crackdown on health-care fraud stems from the 1996 Health Insurance Portability Act, which gave FBI agents, Justice Department prosecutors and Health and Human Services investigators additional resources to investigate fraud and abuse.

Stepped-up enforcement has resulted in a 40 percent jump in the number of pending civil health-care fraud cases and a 20 percent increase in fraud convictions.

As part of the effort, federal officials launched a whistle-blower campaign last year that included "Fraud Fighter" rallies in Seattle and 29 other cities.

Tipsters can collect rewards if their information leads to recovery of Medicare money lost to fraud.

The Washington State Medical Association has criticized the campaign, saying patients could be turning in doctors in what is a complicated billing system.

Seattle Times staff reporter Mike Carter contributed to this report.