University of Miami settles 3 suits alleging fraudulent billing, unnecessary lab tests for $22M

File folders labeled "insurance," "fraud," "claims," and "under investigation"
The whistleblower lawsuits were filed as far back as 2013 and unsealed in November. In a statement, the university stressed that each was tied to "certain past administrative practices" and did not compromise the quality of its care. (Getty Images/Olivier Le Moal)

The University of Miami has agreed to settle three whistleblower lawsuits alleging fraudulent billing and medically unnecessary lab tests for $22 million, the U.S. Department of Justice (DOJ) announced in a May 10 release.

The three cases in question were first filed by individuals against the university between July 2013 and April 2014 and then pursued by the government under provisions of the False Claims Act. They were first unsealed in November and reported on at the time by the Miami Herald.

Alongside the payment, the University of Miami has agreed to enter into a corporate integrity agreement with the Department of Health and Human Services (HHS) as part of the settlement.

“Bilking the Medicare program and patients by charging for medically unnecessary services will always draw the attention of my office,” Special Agent in Charge Omar Pérez Aybar of the HHS Office of Inspector General said in a statement. “Working with our law enforcement partners, our agents are committed to investigating alleged billing scams that result in tremendous costs to federal health care programs and its beneficiaries.”

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According to court documents cited by the DOJ, the University of Miami allegedly converted multiple physicians' offices it operates to hospital facilities and then billed at the higher payment rates associated with the setting without informing Medicare program beneficiaries.

Hospitals are required to provide beneficiaries with a notice explaining that they and their Medicare program would face higher costs when receiving services at a hospital facility. The cited documents alleged that the University of Miami continued to seek payments without appropriate notice “even after being advised by a Medicare Administrative Contractor that its notice practices were deficient,” the DOJ wrote.

The other two alleged violations settled by the university also involved Jackson Memorial Hospital, which the DOJ noted had agreed to a separate $1.1 million settlement.

Here, patients who checked into the Miami Transplant Institute (which is jointly run by the University of Miami and Jackson Memorial Hospital) allegedly received a preset series of tests that were conducted by a University of Miami lab. “Several” of these tests were medically unnecessary “and dictated by financial considerations rather than patient care,” the DOJ wrote.

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Further, the university allegedly caused Jackson Memorial Hospital to submit inflated reimbursement claims for pre-transplant lab tests conducted at the jointly run transplant program. To do so, the DOJ wrote that the University of Miami allegedly made the hospital purchase those tests directly from the university “at inflated rates in exchange for [University of Miami’s] surgeons and Department of Surgery continuing to perform surgeries” at the hospital.

The University of Miami confirmed the settlement in a statement provided to Fierce Healthcare.

“The agreement resolved claims filed in 2013 stemming from certain past administrative practices, including billing notices at [University of Miami Health System’s (UHealth’s)] outpatient clinics and lab testing protocols at its transplant center,” the statement reads. “UHealth’s best-in-class quality of care was never in question. We are pleased to have concluded this matter and continue to be focused on delivering high-quality healthcare to the South Florida community.”

UHealth is comprised of three hospitals and over 30 outpatient facilities across South Florida. It employs more than 1,200 physicians and scientists.