Friday, December 30, 2005

New Jersey Med School Settles Health Care Fraud Investigation

The University of Medicine and Dentistry of New Jersey (UMDNJ), the only medical school in the state, agreed to pay back at least $4.9 million that it had double-billed to Medicare Medicaid.  The U.S. Attorney's Office for the District of New Jersey announced that it had entered into a deferred prosecution agreement (here) to a charge of health care fraud that calls for the school to adopt various reforms to its operations, and it may have to make more payments for the double-billing as it continues to investigate.  According to a press release issued by the USAO (here), UMDNJ agreed to the following:

UMDNJ will establish a position of Chief Compliance Officer (CCO) who will report directly to the UMDNJ president and board of trustees.

The positions of CCO and a new general counsel will be filled through a nationwide search, after which the Monitor will recommend one or more candidates to the board for consideration and selection.

UMDNJ will establish training and education programs as recommended by the Monitor that are designed to advance and underscore the institution's commitment to exemplary corporate citizenship, corporate governance and the highest principles of integrity and professionalism. The Monitor and Board will determine who will be required to participate in such programs.

UMDNJ will establish a hotline and email address for employees and others to notify UMDNJ of any concerns about unlawful conduct or other wrongdoing at UMDNJ.

The agreement requires UMDNJ to give the Monitor unfettered access to all documents and information which he deems necessary to fulfill his duties. The monitor will have no role in academic affairs.

Other problems identified in the government's investigation included improper bonuses and perquisites, and the award of no-bid contracts.  Former federal district court judge Herbert Stern will serve as the school's outside monitor -- Stern has been busy lately, serving as the attorney for former Qwest CEO Joseph Nacchio on his recent indictment on insider trading charges.

The deferred prosecution agreement requires UMDNJ to comply with the provisions for 36-months to have the charges dismissed, and it does not appear to include an endowed professorship for any New Jersey universities, unlike the settlement with Bristol-Myers Squibb earlier in 2005. (ph -- thanks to sharp-eyed reader Delia Johnson for picking up which federal health care program was defrauded)

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