UNM has reached a settlement agreement to pay $10,856.54 to the United States government for fraudulent bills submitted to Medicare, Medicaid and other third-party insurance providers by Dr. William L. Johnson, former medical director at the University Hospital Pain Management Clinic.
The amount paid represents twice what health care insurers lost for physician visits and other services that reportedly occurred, but were never rendered by Johnson, according to the agreement.
"In terms of what our office was doing, we were trying to recover these moneys for services not performed," said Norm Cairns, a spokesperson for the U.S. Attorney's Office. "That has been resolved by this agreement."
The U.S. Attorney's Office, UNM and the University Physician Associates, also known as UPA, executed the agreement March 12, Cairns said.
Sam Giammo, director of public affairs for the UNM Health Sciences Center, said the University, instead of Johnson, incurred the fine because UPA submitted the bills and received payment for them. Operating under the auspices of UNM, UPA is the billing component of the health center.
Cairns said the U.S. Attorney's Office initially investigated only civil matters associated with illegal activity in the pain clinic and that, to his knowledge, no one has been charged with a federal criminal offense.
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"There is still an investigation pending by the federal government regarding the same general subject," said Nick Estes of University Counsel.
Giammo added that the ongoing investigation is criminal in nature.
A self-report, submitted by UNM to the U.S. Department of Justice on May 16, 2002, initially alerted federal investigators to the illegal billing.
The report states that a former registered nurse at the pain clinic alleged that on several occasions Johnson would review the computer printout of scheduled patients for a given day, decide which ones he did not want to see and proceed in one of two ways with them:
l In some instances, Evelyn Martinez, a former unit clerk at the clinic, contacted patients by telephone at Johnson's request, telling them that he did not need to see them. Martinez would then instruct the patients to come into the clinic to pick up their prescriptions, which Johnson had previously written.
l With patients who had already arrived at the clinic, Martinez would tell them in the lobby that Johnson did not need to see them. She would then have them sign the out- patient treatment log, documenting a visit to the clinic and give them a prescription that Johnson had already drafted.
In the report, the nurse alleged that under both practices, patients left the clinic without being treated and that Johnson documented and submitted charge tickets -- bills -- for out patient visits.
The report states that Johnson denied the alleged fraudulent activity to hospital administrators. However, according to the report, a patient care technician, an anesthesia resident and a doctor, all employees at the pain clinic during the time, corroborated the nurse's statements in separate interviews.
A government employee who is familiar with the internal investigation of the fraud stated that, on at least one occasion, Johnson told a patient that there was no time for an office visit and gave the patient a prescription in the hall.
The employee added that Johnson submitted a charge ticket for the encounter in the hall as well.
Johnson left the clinic in February 2002, four weeks after notifying UNM of his intent to do so. The Faculty Handbook states that four months' notice must be given before resignation.
"He just quit," Estes said. "We just didn't pursue it with him."
Estes said that contrary to the Daily Lobo's March 6 article, a settlement agreement was never reached between Johnson and the University.
The former pain clinic nurse initially stated concerns to her supervisor sometime before October 2001, the report states. When no action was taken, the nurse told Johnson's supervisor, Dr. Stephen Abram, former chair of the Department of Anesthesiology, about the alleged misconduct.
The self-report states that, sometime around October, Abram referred the matter to Shannan Carter, who was director of the center's Risk Management office. Carter was assigned to conduct an internal investigation, but the self-report does not mention her findings.
Neither hospital administrators, nor the UPA compliance officer were informed of the nurse's allegations until April 17, 2002.
"Under our policy, the matter should have been reported to the compliance officer earlier," Estes said, but he would not give any reasons for the delay.
The UPA compliance officer reviews any inquiries concerning billing or reports of non-compliance by determining whether a compliance issue exists and if so, developing an appropriate response.
Estes said that he informed the Board of Regents of Johnson's fraudulent billing practices about the time of the University's voluntary disclosure on May 16, 2002.
Former Reg. David Archuleta said that he remembered hearing some information about the case, but could not recall being told anything about the University's internal investigation.
Former Reg. Richard Toliver said that he did not recall being told any information about the pain clinic matter whatsoever.
"Had I heard that, I would have remembered it," Toliver said. "We got pretty riled up over cases of fraud and abuse."
Toliver added that he might have been absent when Estes told the regents about Johnson's activity.
In a written statement, Giammo said the University did not disclose the findings of the investigation to any of the patients involved.
A clinical review conducted by Mark Hauswald, associate dean for clinical affairs at the health center, revealed that there was no harm done to patients in the pain clinic, therefore, no disclosure was necessary, Giammo said.
He added that no external review was conducted to determine if disclosure to patients should have occurred.
Giammo also said that no disclosure was made to the New Mexico Board of Pharmacy regarding the prescriptions Johnson had written for patients he allegedly did not see.
Estes would not comment as to why the pharmacy board was not informed.
"We believe the fine is very reasonable," Giammo said.
