Medical Center to Change Troubled Billing System

UCI Medical Center is changing billing practices to avoid the kind of improper charges that occurred in a problem-plagued cancer research project, where insurers and patients paid for work that should have been billed to the research program.

The changes, which would affect billing practices throughout the hospital, should be in place by year’s end, Executive Director Mark Laret said.

“We have known this is something we had to get done,” Laret said. “All this thing does is reinforce why this is critical to have in place. We knew it was important.”

He said the university identified the billing problems in late 1995 or early 1996 after 18 patients were improperly charged for medical care associated with experimental treatments devised by a cancer research laboratory.

The lab itself--at the Chao Family Comprehensive Cancer Center--was shut down at the end of 1996 after UCI found that researchers engaged in unauthorized experiments and practices.

Laret said officials have since begun working on a new billing system.

One change would assign a nurse to each research project to determine in advance if procedures should be paid for by the research project or by the patient, either directly or through insurance.

The second change would establish a single billing system for the entire hospital. Currently, individual UCI departments often maintain separate billing systems, making it difficult to determine what care individual patients are being billed for.

Federal and state law bars payments for experimental drugs, treatments or procedures performed as part of a research protocol, said officials.

Confusion and incorrect billing in the case of research patients is something that happens at hospitals around the country, Laret said. For years clinical research has been supported by insurers who are billed as if the work was being done as part of a patient’s regular care, he said.

“I think that is a big issue, and there is no question that is going on across the country,” he said. “In many cases, it is hard to be real certain which parts of a patient’s treatment is a research cost rather than a clinical care cost.”

The difficulty in identifying charges might arise because a cancer patient, for instance, might need a weekly blood test and a monthly magnetic resonance imaging procedure, or MRI. Once in the trial, though, the researchers might want three blood tests a week and two MRIs each month. The question of whom to bill could be complex or easily confused.

“In the past, it used to be that a researcher would bill the insurance carrier and if they paid, then that is how it went,” said Laret. “That era has come and gone it is just not acceptable.”

In the UCI situation, the research was privately funded by Meyer Pharmaceuticals, which was co-owned by several of the doctors involved in the research and billing, including the lead researcher Dr. John C. Hiserodt. As a result, bill shifting could have meant that the research program was able to save money by not paying for treatment and tests required by the research.

As of Thursday, UCI was still trying to determine the full extent of the overbilling to the patients and their insurers, said university officials.

The determination has been complicated because the researchers in charge of the program have been disciplined or have left the university and because some hospital departments had separate billing systems.

Don Stanziano, a spokesman for Scripps, which operates six hospitals in San Diego County, said their company has strict guidelines governing clinical research billing--including outlining ahead of time to patients what they and their insurers are responsible for.

“The clinical trials pick up the cost of anything directly related to the trial,” he said. “What isn’t covered is . . . whatever they would be receiving anyway.”

Researcher Sheila A. Kern contributed to this story.