Mark Erickson's whistle-blower lawsuit against the University of Washington brought to light "entrenched" Medicare fraud.
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A woman with the lyrical name of Swannee Rivers opened her front door one day in 2002, and there stood two FBI agents. Finally! she thought, her heart racing. "You don't know how long I've been waiting for this day," she told them later, sitting on the long couch in the rec room of her split-level home in Renton. She began to pour out the story she would later tell a 2003 federal grand jury, detailed here for the first time: how University of Washington doctors routinely falsified Medicare insurance bills, how office workers were told to forge doctors' names on billing documents, how bills were "re-created" for procedures done as long as seven years earlier, how "surprise" visits by federal auditors were quietly announced by UW officials weeks in advance, and how everybody—everybody—at UW Physicians, the medical school's billing office and nexus of the fraud scheme, knew UW had been methodically cheating the government, and taxpayers, for a decade.
Rivers, who started at UWP in 1982, described to the agents a fraudulent system that seemed to go to the top of the medical school. "I tried to tell them," she said. "We know," Rivers remembers one of the agents saying. "We'd like to read something to you." He pulled out a copy of the eight-page resignation letter, written in 1995, that she had given to the vice president in charge of the billing office. The FBI had found the letter in a raid on UWP files. It explained how Rivers was leaving a job she loved because she could no longer stomach the billing practices, outlined in agonizing detail.
Rivers told the agents the vice president promised changes. He was later seen reading the letter to her manager, laughing. Recalling this for the FBI, Swannee Rivers almost came to tears in front of the agents. Seven years late, someone had finally heard her distant whistle. Over the next two years, helped by her and others' testimony—and, in particular, led by the efforts of chief whistle-blower Mark Erickson—federal investigators and prosecutors would expose and collapse UW's historic Medicare/Medicaid false-billing scheme. It would lead to the criminal convictions of two doctors, neurosurgeon H. Richard Winn and kidney specialist William Couser, cost the school as much as $25 million in legal fees, and leave UW facing an extraordinary $35 million fine it must pay by the end of this week—a record amount for Medicare fraud by a university.
Erickson, 35, who, like Rivers, tried to find a cure within the system, filed a sealed whistle-blowers' lawsuit in 1999 and became an FBI informant. "Some of these fraudulent practices were so well entrenched at UWP they became almost standard business practice," Erickson says. Sending charts back to doctors to have them "post-documented" to justify unwarranted charges, he said, was even detailed in some job descriptions. Under the False Claims Act in which a whistle-blower shares in any fines, Erickson is about to receive $7 million for his effort, netting about half that amount after taxes and legal costs. He calls the civil fine and plea-bargained criminal cases only "a partial repayment" of what UW wrought. "I do believe that the [U.S. attorney's] office was put in a difficult position and had to mitigate the effect on the community," Erickson says. Prosecutors were creative with their settlement plans, "but they may have been too lenient." The University of Pennsylvania was fined a then-record $30 million in 1995 for similar violations, based on treble damages of $10 million in overbilling, as determined by a federal audit process known as PATH—Physicians at Teaching Hospitals, also used in the UW case. UW's settlement agreement, says Erickson, "doesn't even come close to single damages" for its overbilling, estimated to be more than $50 million. (UW calls such a figure an exaggeration.) "I believe that there are many more doctors in many departments who could have found themselves facing criminal charges," Erickson says.
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When she resigned in 1995, Swannee Rivers told managers at UW Physicians about falsification of bills and forged doctor signatures. |
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The U.S. investigation burst into scandal when word of the probe got out in 2002. But the damage might have been avoided had UW officials taken Rivers' tell-all letter to heart or reacted to Erickson's persistent complaints about fraud. Instead, according to court documents and interviews, UW doctors, administrators, and billing managers, with at least tacit approval of some top officials, continued bilking the public like crooked car dealers, lying about their services and prices. Lawbreaking was justified: In their minds, the government's insurance reimbursements were inadequate and unfair. They knew what they were doing, prosecutors say. Incriminating documents were shredded and workers were warned not to break ranks. "Butt out," is what Erickson says he was told. You just don't go around talking about billing for medical procedures "performed" by physicians who were in Europe at the time.
Despite the public impression today, the fraud was not isolated among a few doctors, Rivers says as we drive though the rain en route to her child's Christian preschool in Maple Valley. And though school officials say the scandal is now behind them, Rivers doubts it's over. Certainly it shouldn't be, she says. "They got a couple doctors and the UW will pay a civil fine without even admitting wrongdoing!" She was getting excited and braked late for a stop sign. "I don't know how anyone at the top couldn't know this had gone on."
