Firm Settles Medicare Double-Billing Case
A medical billing firm accused of double-billing for Medicare payments has agreed to a $1.5-million settlement with the federal government, the U.S. attorney’s office in Los Angeles said Tuesday.
Medaphis Physician Services Corp., based in Atlanta, did not admit guilt in the settlement. The case involved Medaphis billing an extra $500,000 on behalf of a doctors group affiliated with Cedars Sinai Hospital in Los Angeles.
“The primary problem was duplicate billing,” said Consuelo S. Woodhead, chief of the civil fraud section.
The double-billing occurred, Woodhead said, because the company frequently received duplicate copies of patient bills from the doctors group, and sent them through to Medicare without checking them. She said the problem was limited to a single office in Culver City, which was acquired by Medaphis from another company, Compmed Inc., in 1993.
In addition to the double-billing, Compmed used incorrect codes to submit claims to Medicare, the Federal Employees Health Benefit Program and another federal program, she said.
“The evidence showed that Medaphis knew it had a problem processing these claims and didn’t do anything for a substantial period of time to really address the problem,” Woodhead said.
The problems were discovered in 1992 and lasted through 1996, according to a news release issued Tuesday by the U.S. attorney’s office. It was caused by an improperly configured computer program, according to the news release. It was brought to the attention of Compmed management, but “nothing was done to correct the problem,” according to the release.
In a related action last month, Medaphis pleaded guilty on behalf of Compmed to one count of mail fraud, and paid a $350,000 fine and restitution of $498,000.
The case was brought under the federal whistle-blower statute in 1994 by a former office manager at Compmed, Maureen McKinsey. The United States and the state of California intervened in the lawsuit, which was unsealed and dismissed on Tuesday in federal court.
Under the statute, McKinsey will receive a portion of the settlement. She is entitled to between 15% and 25% of the $1.5 million deal, but lawyers have not yet begun to negotiate the terms, according to her attorney, Phil Benson of Orange.
