A Texas university medical center and the Dallas hospital where Grady Memorial Hospital’s new CEO comes from have agreed to a $1.4 million settlement made public Thursday following a government investigation into alleged Medicare and Medicaid billing fraud.
The University of Texas Southwestern Medical Center and Parkland Memorial Hospital cooperated with investigators but denied claims by federal and state agencies that university physicians inadequately supervised surgeons in training and improperly billed Medicare and Medicaid for services they didn’t provide. Parkland, where the university physicians teach, isn’t required to pay anything under the agreement.
John Haupert, who will take over as Grady’s CEO in October, has served as the public hospital’s chief operating officer and second-highest ranking administrator since 2006.
A Grady search committee chose Haupert, an Arkansas native, from among hundreds of applicants because he has a successful track record of dealing with financial issues at hospitals similar to Grady, board chairman Pete Correll said in July after announcing his selection. The Atlanta safety net hospital is facing an up to $25 million budget shortfall this year.
Like Grady, Parkland, which is roughly 20 percent larger, spends hundreds of millions of dollars a year caring for the poor and uninsured and has seen visits to its emergency room jump in recent years.
The settlement follows a four-year investigation by the U.S. Department of Justice and Texas attorney general into improper Medicare and Medicaid billing by university teaching physicians between 2004 and 2007. Teaching physicians may submit claims for supervising residents, doctors in training, if they’re present for a critical portion of the service. The agencies contend, however, that physicians didn’t properly supervise surgeries conducted by residents at Parkland.
The investigation was sparked by a June 2007 whistleblower lawsuit brought by Dr. Larry Gentilello, the former chair of the burns, trauma and critical care division at the university medical center.
In a statement, the medical center’s president, Daniel Podolsky, denied any lapse in supervision of residents or inappropriate billing, saying it agreed to pay the $1.4 million to avoid ongoing litigation expenses and prevent more distraction from its mission. Parkland said it conducted an internal investigation in 2007 but found no evidence of improper supervision.
The agreement comes at a time when Parkland is facing intense government scrutiny stemming from a separate investigation in July where state inspectors found widespread problems, including unsanitary conditions, that put patients at serious risk.
Federal regulators had threatened to cut off hundreds of millions of dollars in Medicare funding if Parkland didn’t address the problems by Friday but pushed back the deadline to Sept. 30.
While the main reason for the new deadline is to allow inspectors time to complete follow-up reports, it also allows inspectors additional time to examine other recent complaints related to patient care and safety, a spokesman with the Centers for Medicare & Medicaid Services said Friday.
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