Below is the statement issued by the U.S. Department of Justice, United States Attorney, Eastern District of Pennsylvania.


The Clinical Practices of the University of Pennsylvania (CPUP), a component of the University of Pennsylvania Health System (UPHS), has agreed to pay $30 million to the United states government after a federal audit disclosed that false Medicare bills were submitted for faculty physician services.

The civil settlement agreement was announced today (Dec. 12) by Michael R. Stiles, U.S. Attorney for the Eastern District of Pennsylvania, and June Gibbs Brown, Inspector General of the Department of Health and Human Services.

As part of the settlement, CPUP also agreed to undertake an extensive compliance/disclosure program to assure that future billings by its physicians comply with Medicare requirements.

"The submission of these false claims to Medicare is a very serious matter," Stiles said. "Obviously, the escalating costs of Medicare are a concern to everyone. Hopefully, this agreement will serve notice on other institutions to closely audit and monitor their Medicare billings, and to come forward if they find discrepancies. We intend to continue to aggressively pursue investigations of false Medicare claims submitted by other institutions."

Federal law provides for triple damages in false claims cases. Triple damages of $30 million in this case covers false claims for the years 1989-1994.

The audit disclosed:

Auditors used a scientific sampling of CPUP billings to arrive at the amount of false claims. Individual medical charts were analyzed by experts from XACT Medicare Services, a subsidiary of Pennsylvania Blue Shield.

The compliance program agreed to has four key elements:

The $30 million CPUP will pay will be distributed between the Medicare Trust Fund and the U.S. Treasury.

Stiles said this matter had been assigned to Assistant United States Attorney Margaret Hutchinson and congratulated Hutchinson and Jim Sheehan, Chief of the U.S. Attorney's Office, Civil Division, for their excellent efforts in the case.

Stiles also noted the cooperation of the University of Pennsylvania Health Services in the prompt resolution of the settlement agreement.