Most Utah hospitals on hook for overbilling Medicaid

IASIS Healthcare isn't the only hospital chain accused of overbilling Utah's Medicaid program — they're just the first to fight back in court.

Emergency departments at most of the state's major hospitals could be on the hook for $22 million, for charging emergency-level fees for nonemergency care given patients between 2008 and 2009, according to information obtained through a records request.

Inspector General Lee Wyckoff declined to name the hospitals, some of which haven't been placed on official notice.

But the IASIS lawsuit, filed this month in 3rd District Court, thrust the dispute into the spotlight and sparked a policy debate Tuesday at a legislative budget hearing.

Concern about Medicaid and how to fund the $1.8 billion low-income insurance program drove lawmakers last year to create Wyckoff's post. State law empowers the new Office of the Inspector General (OIG) to recoup, reduce, avoid and minimize costs and to "seek recovery of improperly paid Medicaid funds."

In question is how far the OIG can go back in time to recoup misspent funds.

If it's a question of legislative intent, Sen. Allen Christensen, R-Ogden, says he'll carry a bill to reinforce the OIG's policing powers. "If you feel there's need for clarification, we can fix that," he told Wyckoff on Tuesday.

Hospitals, meanwhile, are pursuing a bill to limit the OIG's authority.

Currently, nothing bars the office from looking back 10 or 20 years, said David Gessell, a lobbyist for the Utah Hospital Association, which is angling to impose a statute of limitations, or deadline, on collections. The association also takes issue with Wyckoff's hiring of an Assistant Attorney General and an administrative law judge, saying that makes his office "judge, jury and executioner."

Wyckoff says he would have preferred to use the Department of Health's lawyers and judges, since the hires came out of his budget. But doing so would hamper his independence.

Hospitals don't deny the billing errors. But they blame it on misinformation given them by the Utah Department of Health, said Gessell. They recognized the mistake long ago and offered to reimburse the state, which health officials said wasn't necessary, he said.

Now, years later, the OIG is demanding that they pay up, which is unfair and unwise since the state itself could be held liable, says Gessell. "You can't say one thing as a state agency and then say, 'Oops, we were wrong. We're going to change the game on you.'"

The argument drew sympathy from at least one lawmaker. But Wyckoff says were he to back off, the federal government would still pursue repayment.

In fairness to hospitals, he said, he didn't void the claims altogether, which would have made it impossible for hospitals to resubmit them correctly. Now, at least they can get the correct reimbursement for services provided, he said.

kstewart@sltrib.com —

The battle over policing Medicaid

O For a look at Utah's past efforts to attack Medicaid fraud, waste and abuse — and the state's new Inspector General, visit > bit.ly/wnSpmy