Records in Medicare Suit Released

Already hit with $15.3 million in penalties for submitting false bills to Medicare, Ventura County must abide by a strict training and inspection program to avoid future problems as part of its settlement with the federal government, according to court documents released this week.

Assistant U.S. Atty. Wendy Weiss said Friday the federal government’s lawsuit against Ventura County should warn other governments to make sure their Medicare billings are in order.

“If you are going to bill us, and bill us a lot, you better follow the rules,” said Weiss, chief prosecutor in the civil case unsealed late Thursday. “If I were standing in the shoes of county hospital administrators, my first, first step would be to make sure they are doing everything they can to make certain they don’t find themselves in Ventura County’s position.”

Ventura County officials admitted no wrongdoing under the settlement. But county officials have said that the billings were inadvertent.

“We may owe the money because we didn’t keep the records right, but there was no fraud,” said County Counsel James McBride.

State regulators say they, too, will keep closer tabs on health care programs run by counties as a result of the Ventura lawsuit.

“It’s a wake-up call that we need to be ever-vigilant,” said Gary Pettigrew, deputy director of the state Department of Mental Health, which conducted its own inquiry of Ventura’s mental health system.

Prosecutors say the Ventura County Medical Center systematically overbilled Medicare for nearly a decade, submitting claims for outpatient mental health care when doctors never saw the patients.

Services were instead provided by lower-paid employees, such as nurses or occupational therapists, with the county reaping higher payments by claiming a doctor was supervising care. The practice continued for nearly a decade until a county psychiatrist alerted the government in a whistle-blower’s lawsuit filed last year.

Government leaders across the state have closely tracked the federal lawsuit against Ventura County--believed to be the first successfully brought against a California county under the federal False Claims Act--after details of the sealed lawsuit leaked out earlier this year.

Ventura County supervisors entered into a five-year “integrity agreement” as part of the settlement. The pact requires the county to report its progress in cleaning up billing procedures to federal officials and mandates extensive training for employees who do billings.

The county also agreed to appoint an officer and a committee charged with ensuring that all requirements are obeyed and that senior managers are following a mandatory code of conduct.

Carrying out the controls will add millions of dollars to the $15.3-million settlement cost, county administrators say. The county will pay the settlement amount over five years.

County supervisors agreed to a settlement in June after an audit showed that every claim filed during a two-year period did not include a treatment plan signed by a physician, a prerequisite for Medicare reimbursement.

The audit showed that virtually every claim contained other errors that would have disqualified the billings for reimbursement, prosecutors said.

Although it appears that no one personally profited from the scheme, the inflated billings increased the amount of revenue flowing into the county’s treasury. Weiss said she questions why no one in the county caught the problems earlier.

“When someone has 100% of their billings wrong, it’s hard not to consider that someone should have known,” Weiss said.

A criminal probe is underway by the FBI to determine if any administrators broke the law. An initial inquiry did not spur charges, but investigators are continuing to ask questions. The Ventura County Grand Jury is also looking into the billing scandal.

Ventura County’s financial hit is a “scary, cautionary tale” of how quickly politics can devastate a public mental health care system once held up as a model for the state, said Marvin Southard, Los Angeles County’s mental health chief.

Political fights in the county’s Health Care Agency led to an ill-fated merger of its mental health and welfare departments last year. Psychiatrists vehemently opposed the merger, believing it would weaken their ability to treat mental illness as primarily a medical problem.

Dr. Jerome Lance, a veteran psychiatrist, filed a whistle-blower lawsuit five months after the April 1998 merger, alerting authorities to irregularities in billings. The action merging the agencies was later rescinded.

“This was an unnecessary tragedy,” Southard said. “The genesis of the problem was a dispute in the county family. . . .If that had been managed successfully, none of the after-effects would have occurred.”

Lance will get about $2 million as his share of the settlement. He and other county psychiatrists had said county officials were ignoring psychiatrists’ concerns that medical care was suffering under the county’s team-based approach to providing mental health services.