Attorney General Thurbert Baker and U. S. Attorney Richard H. Deane, Jr. announced today that a $2.87 million civil settlement has been reached between the State of Georgia, the United States and Floyd Medical Center in Rome, Georgia, relating to Medicare and Medicaid billing for services provided by resident physicians participating in Floyd’s Family Practice Residency program.

“The U.S. Attorney and I take very seriously our responsibility to safeguard our health care programs,” Baker said. “When we believe that an institution has overbilled the programs for services, we will take the actions necessary to recover taxpayer funds,” he said.

Floyd Medical Center is one of sixteen teaching hospitals in the State of Georgia. Under both the Medicare and Medicaid programs, residents and interns at teaching hospitals may perform services under the supervision of faculty physicians, but must do so in compliance with regulations of each program. These rules define the degree of supervision and the documentation required for services to be reimbursable to the programs.

In December 1998, Floyd voluntarily disclosed to State Medicaid officials that its past Medicaid billings for its residency program were not in compliance with state and federal billing regulations. Floyd followed with a similar disclosure to the Federal government’s Medicare program.

Following these disclosures, the Georgia State Health Care Fraud Control Unit and the U. S. Attorney’s office conducted an extensive investigation which confirmed that Floyd’s billings were not in compliance with regulations covering certain faculty-to-resident staffing ratios and documentation requirements.

Although the investigation confirmed that inappropriate billing and documentation occurred, the Government found that all of the patients whose records were examined had, in fact, received treatment. The quality of services provided by FMC’s resident physicians was not an issue in the investigation.

Under the terms of the agreement, Floyd will pay approximately $1.5 million to the Medicaid program and $1.36 million to Medicare. Floyd will also be required to enter into a corporate integrity agreement with the U. S. Department of Health and Human Services, Office of Inspector General. In reaching the settlement agreement, Attorney General Baker and U. S. Attorney Deane emphasized that FMC cooperated fully with the investigation.

According to Attorney General Baker, the investigation of FMC’s residency program is similar to investigations that have been conducted under the “PATH” (Physicians At Teaching Hospitals) initiative of the U. S. Department of Health and Human Services. The PATH initiative has led to substantial settlements involving Medicaid and Medicare billings by teaching hospitals in a number of states.

Attorney General Baker and U. S. Attorney Deane noted that this settlement reflects their commitment to vigorously enforce state and federal laws and to pursue civil recoveries for violations where appropriate. They recognized the excellent work done by both the State Health Care Fraud Control Unit and the Civil Division of the U. S. Attorney’s Office in achieving this settlement. Georgia Assistant Attorney General Scott A. Smeal and Assistant U.S. Attorney Amy Kaminshine led the investigation.