FEDERAL AUDITORS are training their guns on Medicare overcharges at the nation's teaching hospitals, and the Medical College of Georgia is among those in the cross-hairs.
About 1,200 hospitals share $8 billion a year in federal subsidies for training medical students. The Health and Human Services Office of Inspector General plans to scrutinize every one of them in an ambitious nationwide sweep known as PATH, for Physicians At Teaching Hospitals.
Government auditors suspect the hospitals are routinely charging Medicare the full M.D. rate for services that really are done by medical students.
Teaching hospitals already get a special add-on in their rates to compensate for physicians' time supervising interns and residents. So if doctors are also charging for procedures they oversaw but did not perform, their institutions are double-dipping.
THE FIRST SHOT was fired in December 1995, when the University of Pennsylvania agreed to repay $30 million in disputed billings and damages. Three other audits have yielded another $38 million.
However, two audits have produced only minimal results, including one at the Dartmouth College medical center that found a grand total of $788 in erroneous bills.
Georgia has four medical colleges -- MCG in Augusta, Morehouse and Emory in Atlanta and Mercer in Macon -- but MCG and Emory have the two major teaching hospitals. Hence, they're natural targets.
"There has been a tremendous effort expended to be prepared if and when we do get a PATH audit," said Patricia F. Sodomka, hospital administrator at the Augusta college.
"IT DOES FORCE you to change your practice," said Sodomka, a board member of the National Council of Teaching Hospitals. "I know that our physicians spend more of their clinical time with the chart than ever before ... If anything is questionable or unclear, then they'll tend to bill at the lower rate."
For those with substantial overcharges, the risks are great.
Federal law lets Health and Human Services seek triple damages for false claims. Some hospitals have chosen to plea-bargain their way out, paying back millions to stop federal auditors from digging any further.
That has some hospital executives, and their supporters in Congress, questioning Medicare's prosecutorial zeal.
Prodded by the industry, U.S. Rep. Bill Thomas, R-Calif., asked the General Accounting Office to look over the inspector general's shoulder.
THE GAO'S NEWLY released findings largely support PATH. Despite two lawsuits brought by the hospital industry -- one dismissed, one pending -- GAO auditors concluded that Health and Human Services is on solid legal footing.
However, the audit found Medicare partly to blame for any billing errors. Federal officials failed to update their rules or consistently ask for documentation to assure that doctors had "full personal control" of services they billed for.
One Health and Human Services official admitted as much in a 1994 memo obtained by congressional auditors, saying that the payment standards "have not been vigorously enforced."
Contrary to industry protests, however, the billing rules were no secret. Medicare claims processors had told hospitals "for many years" that physicians couldn't charge for medical procedures they didn't observe, the GAO found.
EVEN WITHOUT the audits, these are anxious times for hospital money managers. Medicare is cutting back on the number of resident or trainee physicians it will subsidize, and managed-care HMOs are refusing to pay the traditional extra rate that teaching hospitals charge to subsidize education.
Still, PATH is the most feared threat. Officials at Pennsylvania happily paid the $30 million when faced with the alternative: $280 million in penalties and possible criminal prosecution.
"If you make a mistake, it's not just a mistake -- it's fraud," Sodomka said. "That's the part I think is so disheartening to hospitals across the country."
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Frank LoMonte covers politics in Georgia for Morris News Service.