Physicians Clinic, federal government settle

A group of Spokane doctors has agreed to pay $656,000 to the federal government to settle an investigation into Medicare overbilling.

No charges were filed against doctors or the Physicians Clinic of Spokane in the 2 1/2-year investigation by the U.S. Attorney’s Office for the Eastern District of Washington.

Dr. Kirk Rowbotham, president of Physicians Clinic, said the group received bad advice regarding allowable billing for a relatively inexpensive cholesterol test.

The settlement money will come directly from doctors’ pockets, he said. The clinic did not have insurance to cover such an issue and is not pursuing litigation to recoup the fine from an independent business that advised them on Medicare billing.

“We do take full responsibility for the mistakes we made and have since changed our billings practices,” Rowbotham said. “We are a group of physicians who are passionate about patient care, and that won’t change.”

Tom Rice, spokesman for the U.S. attorney’s office, confirmed the settlement and said it was handled as a civil matter. No lawsuit or criminal charges are pending. His office is preparing to make an announcement this week.

Physicians Clinic of Spokane has 20 doctors practicing internal medicine and primary care, and one rheumatologist. It was formed in 1995 through a merger of clinics.

Problems first arose in April 2003 when Medicare denied payment for a $13 blood test that determines the level of a patient’s low-density lipoprotein, also called bad cholesterol.

The clinic used the test to directly measure a person’s LDL rather than using a more standard lipid panel.

The panel, Rowbotham said, calculates LDL by using an equation that includes total cholesterol, high-density lipoprotein (also called HDL or good cholesterol) and triglycerides.

Rowbotham said doctors wanted the more definitive and accurate LDL number when advising and prescribing medications to patients.

After the 2003 payment denial, the clinic changed its coding on the advice of Medicare billing experts. The switch seemed to work as the denials stopped.

Then in 2005 Medicare officials conducted an audit. Rowbotham said there was no notification of problems.

In late 2007 the clinic received a letter from the U.S. attorney’s office.

Rowbotham said the clinic stopped using the definitive LDL test, hired an attorney and immediately revamped its Medicare billing practices.

On-again-off-again negotiations resulted in the settlement, which was effective Friday.

Rowbotham said Medicare billing is complicated and that changing rules have ensnared other clinics.

The settlement includes $380,606 to reimburse Medicare, the federal government’s health insurance program for people over age 65. The settlement also includes $275,394 to pay for the federal government’s administrative costs.