Internal Audit Clears UCI's Psychiatric Unit : Medicine: No evidence is found to substantiate allegations of falsified drug records or improper billing of Medi-Cal.


An internal audit of UCI Medical Center's psychiatric unit has found no evidence of falsified prescription drug records or improper billing of Med-Cal for unapproved research drugs, university officials said Wednesday.

After a 10-month investigation that included a review of the records of about 60 psychiatric patients at the hospital in Orange, the university's internal audit department concluded that "Medi-Cal was not improperly billed for research drugs," according to the summary report released Wednesday.

"What it means is that . . . there was no indication or finding of any impropriety," said Dr. Donald B. Summers, UCI Medical Center's chief of clinical psychiatric services.

The investigation was begun last November amid allegations by medical center employees that unidentified doctors falsely labeled research drugs with the names of approved drugs and illegally billed the state. The doctors allegedly kept two sets of medical records to hide the practice from Medi-Cal, which does not pay for research trials.

Similar allegations are the focus of a second investigation by the state attorney general's division of Medi-Cal fraud. Don Kennedy, a senior investigator for the office in San Diego, said Wednesday that the investigation is continuing. UCI spokeswoman Karen Young said a copy of the internal audit findings would be forwarded to the attorney general's office.

Complaints that sparked the internal investigation were made in letters to hospital administrators by two UCI psychiatrists and an administrator for the department. The letters to Dr. William E. Bunney and Summers, the chairman and vice chairman, respectively, of UCI's department of psychiatry and human behavior, raised ethical and legal concerns about these practices, emphasizing that these same questions were raised months earlier but that department officials had taken no action.

Summers said Wednesday that he and Bunney requested the internal audit in late October, 1989, and that at least two of the letter writers were informed of the investigation in a meeting on Feb. 13.

Summers said Wednesday that he did not know why the investigation took so long, but auditors indicated that it was part of a continuing major audit of the 95-bed hospital unit and psychiatric department.

According to the audit report, the medical center was reimbursed by Medi-Cal for the hospital stays of some patients used in research studies.

"However, Medi-Cal was not billed for the actual cost of the research drugs administered to these patients," wrote internal audit director Andrew C. Yeilding in the summary report to Mary A. Piccione, the medical center's executive director.

As for keeping a "second set" of medical records, such practice is "standard procedure," the audit said, citing the director of research for the medical center's department of psychiatry and human behavior, Dr. Steven G. Potkin. Potkin was unavailable for comment Wednesday.

The report indicated that one set is the patient's medical record and the other is the research record of the patient's participation in research studies.

The audit said such a research record is required by the U.S. Food and Drug Administration, but that these are not part of the official hospital medical records and consequently "are not relevant to the hospital records used for billing procedures."

Summers said that research drugs are generally supplied by the drug company supporting the studies and that "there is no way to generate a charge" for the drugs.

"Medi-Cal was never billed for any of these medications," Summers said.

A central part of the criticism that led to the internal investigation revolved around the labeling of drugs on patient records. Charts of patients who were receiving the research drugs Raclopride and Zacopride were variously labeled Haldol/R and Haldol/Z.

Haldol, a brand name for the drug haloperidol, is an anti-schizophrenic drug approved by the FDA and reimbursable by Medi-Cal. It is a major tranquilizer used in treating psychotic disorders, severe behavior problems in children and hyperactivity in children.

The audit called it standard practice in conducting medical research to use a "double blind" study and identify a drug by a code name in the medical record. Since the physician's orders and those in the medical center's pharmacy indicate the appropriate research drug, what is actually written in the medical record "is moot," the audit concluded.

However, Summers said, when questions were raised about this labeling practice last October, he ordered a procedural change requiring that the drugs be more fully labeled to prevent confusion.

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