University of Washington's physician practice plans have reached a settlement with the federal government

Under the settlement, the faculty practice plans have agreed to pay $35 million. No state appropriations will be used to pay any part of the settlement.

"There's no question that billing errors were made," said Dr. Paul G. Ramsey, UW vice president for medical affairs and dean of the School of Medicine. "While most of these errors were the result of innocent mistakes, we recognized our responsibility and took immediate steps to improve our compliance efforts. We are committed to having business practices that meet the same high standards of excellence as our other programs.

"This settlement allows us to devote our full energies to our teaching, research, and patient care missions."

"The faculty and staff of UW Medicine should be commended for having stayed on course during a difficult and protracted period," said Dr. Lee Huntsman, president of the University of Washington. "Our region has every reason to be proud of a medical school that is recognized as one of the finest in the nation and has demonstrated an unwavering commitment to serve the underinsured and uninsured in our state."

The billing procedures in question occurred during a period when federal rules involving Medicare and Medicaid billings were changing and widely acknowledged to be confusing.

"As federal regulations changed and became more complex, we made constant efforts to expand our billing compliance program to keep up. This effort goes back more than 20 years, when the non-profit UW physicians' faculty practice plan became one of the first in the nation to implement a formal review program for billing documentation--well before there was any federal requirement to do so," Ramsey said.

"When we first became aware of the government's investigation in November 1999, we were shocked. But, as the investigation continued, it became clear that our compliance program was not up to the task in certain respects," Ramsey said. "Throughout this investigation process, we have been implementing comprehensive, concrete measures to enhance our billing compliance system. These include improved oversight at several levels, additional staff and physician training, and efforts to enhance communication between professional fee coordinators and physicians regarding coding and documentation issues. We now spend nearly $4 million a year on compliance."

Compliance programs are intended to ensure that bills submitted for reimbursement are correct and accurate based on the documentation provided by caregivers. It is expected that people will submit accurate documentation and will act to prevent anyone else from doing otherwise, Ramsey said. The compliance program now includes separate mechanisms by which anyone can report compliance concerns in a safe and confidential manner.

The settlement includes provisions that commit the UW to taking specific actions to ensure continued compliance with billing rules.

"We will put these documentation problems behind us and continue to provide innovation and leadership in medical education and research now and in the future. UW Medicine is a strong, healthy system of two world-class hospitals, neighborhood clinics, highly recognized physicians and a premier School of Medicine providing exceptional patient care, research and training," Ramsey said.

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