ATLANTA - Attorney General Thurbert E. Baker announced today that a $4.5 million civil settlement has been reached between the State of Georgia and Emory University and its non-profit affiliate, the Emory Medical Care Foundation (EMCF), relating to past Medicaid billing for services provided by Foundation physicians at Grady Hospital.

By contract with the Fulton-DeKalb Hospital Authority, the Emory Medical Care Foundation provides physicians to treat patients at Grady Hospital. Most of these services are billed to the Georgia Medicaid program.

Since July 1997, the State Health Care Fraud Control Unit, composed of prosecutors from the Georgia Attorney General's office, Georgia Bureau of Investigation agents, and auditors from the State Department of Audits, has been investigating Emory's Medicaid billing. The State concluded that there were two specific areas in which Medicaid billing by EMCF was not in compliance with the policies and procedures of the Georgia Medicaid program. First, the State contended that from 1993 through mid-1997, EMCF billed for outpatient obstetrical services at higher service levels than were warranted by the documentation, a practice known as "upcoding." Second, the State's review also indicated that during the same period Medicaid billings submitted for services provided by residents and interns under the supervision of teaching physicians were inadequately documented and did not comply with Medicaid rules concerning "teaching physician presence." Although the investigation revealed that inappropriate billing and documentation may have occurred, the State found that all of the patients whose records were examined had, in fact, received treatment. The quality of services provided by Emory physicians was not an issue in the investigation.

Attorney General Baker stated that "Emory cooperated fully with the investigation and the investigation revealed no evidence of criminal wrongdoing." He further commended Emory for its role in consistently providing high quality health care to the indigent citizens of Fulton and DeKalb counties.

Under the terms of the agreement, the Emory Medical Care Foundation expressly denies any wrongdoing, but has agreed to pay the Georgia Department of Medical Assistance a lump sum of $4,502,693 to settle all possible claims. The Foundation also agreed to several compliance provisions, including continued implementation of a compliance office and program that were initiated in 1997. The State considered this compliance program, in addition to Emory's cooperation with the investigation, to be strongly mitigating factors in the settlement of the case.

According to Attorney General Baker, this Medicaid investigation is similar to Medicare investigations that have been conducted under the "PATH" (Physicians at Teaching Hospitals) initiative of the U.S. Department of Health and Human Services, Office of Inspector General. In other states, the federal initiative has led to substantial settlements involving both Medicare and Medicaid claims. Attorney General Baker noted, "To my knowledge, Georgia's investigation is the first state-initiated PATH-type case in the United States."

Attorney General Baker noted, "This case reflects my continuing effort to pursue not only criminal fraud and abuse in the Medicaid program, but also to seek civil recoveries where appropriate. We are recovering taxpayer dollars." Baker also recognized the excellent work done by the State Health Care Fraud Control Unit in handling this case. Assistant Attorneys General Scott A. Smeal and Charles M. Richards led the investigation.

According to DMA Commissioner William Taylor, DMA will begin reviewing the billing practices of Georgia's other teaching hospitals to determine if similar practices exist.