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The state's premier medical center is in a crisis of denial following a settlement with the federal government over an overbilling scandal.

As much as University of Washington officials want to move beyond their $35 million settlement for billing fraud, UW regents and administration must repair the breach of public trust.

Paul Ramsey, dean of the UW medical school, should resign.

He has been dismissive of the costly settlement by characterizing the fraudulent Medicare and Med-icaid billings as "billing errors," most of which were "innocent mistakes." Ramsey was warned of billing problems in 1998, a full year before a whistleblower lawsuit spawned a five-year investigation and led to two doctors pleading guilty to felonies. And, in recent days, he acknowledged to The Seattle Times that billing compliance should have been a higher priority in the 1990s.

Still too little. Far too late.

The UW regents are culpable. They should do some soul-searching about their leadership and efforts to hold Ramsey accountable for the system he heads.

Consider, these are mostly the same regents who encouraged a former UW president to leave over an affair with a staff member. Yet, they are turning a blind eye to wrongdoing — festered over years — that cost federal and state taxpayers and the UW dearly.

Doctors billed for services actually performed by medical residents. The whistleblower told stories of doctors recreating records and billing for procedures more expensive than those performed.

Beyond the UW's $35 million settlement announced April 30 — a record for a U.S. teaching hospital — the university ran up about $27 million in private legal bills because the state attorney general was representing the Department of Social and Health Services. The agency pressed for refunds for the fraudulent Medicaid billings against a backdrop of budget cuts that pushed adults off Medicaid and even endangered coverage for some children.

Outrageous behavior

Consider also, the regents presided over outrageous behavior across Montlake Boulevard. The university is awaiting NCAA sanctions for a gambling scandal in the football program and possibly an investigation into the softball program's drug scandal. Finally, athletic director Barbara Hedges left but was given a publicly fond send-off by UW officials.

The UW's reaction to far too many of its imbroglios is the same: Ignore. Deny. Obfuscate. Minimize.

Even last week in an e-mail to faculty, Ramsey expressed dismay the scandal had not blown over. "Although a settlement was reached with the federal government on April 30, there continues to be a high level of media interest in this investigation."

Well, yes. Public institutions require public accountability.

State and federal taxpayers were defrauded in amounts that eclipse the settlement — federal prosecutors conceded they all but pulled their financial punch in settling the case in order not to cripple the UW's critical role in underpinning the regional medical system. Also, the two doctors' groups responsible will pay only about one-fifth of the settlement. To maintain salaries that will attract and retain doctors, the UW picked the pockets of other institutions to settle up — the UW Medical Center, the School of Medicine, Harborview Medical Center and Children's Hospital and Regional Medical Center.

Attitude adjustment

Though the settlement requires extra federal scrutiny and prosecutors acknowledged positive changes in UW compliance programs, confidence the institution has changed is hard to muster, given UW officials' attitude.

Now the UW is creating an independent investigation to consider lessons learned from the investigation. But even that promising step is tainted by the university's epidemic of minimization.

Dennis Okamoto, the UW Board of Medicine chairman who will appoint the investigative panel, said Ramsey's oversight of the billing issues likely will not be examined. "There's no doubt in my mind that Dean Ramsey did the proper things, and we have the fullest confidence in him."

Nothing, and no one, should be sacred in such a review.

The regents should insist on a thorough probe that is completely independent, truly leaves no stone unturned and relentlessly examines the administrative failures that led to the fraud that robbed taxpayers and now other hospitals.

Until that happens, this mess won't go away.