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Published on June 30, 2016

MU Health Settles Government Claims

MU Health has agreed to settle an investigation that began in 2011 by paying the federal government $2.2 million. The settlement announced today reimburses Medicare and other federal health care programs for charges billed by two former MU Health radiologists, Kenneth Rall and Michael Richards.

As part of the settlement, MU Health also agreed to a five-year corporate integrity agreement with the Office of Inspector General for the United States Department of Health and Human Services.

In addition to the settlement over radiology billings, MU Health also reached a settlement on unrelated billing matters that the health system identified and self-disclosed to the government while the radiology investigation was pending. MU Health is repaying the federal government approximately $3 million ($3,051,188) to resolve those matters. MU Health determined that at certain times over a period of 12 years, from 2001 to 2013, the health system had not properly billed the government for two specific tests and treatments and provided insufficient documentation for certain matters related to agreements with other parties under the federal Physician Self-Referral law.

The radiology investigation was first announced to the public in June 2012, when MU Health officials shared preliminary findings with the public and highlighted changes to the Department of Radiology.

“We consider these settlements to be a fair resolution,” said Hank Foley, interim MU chancellor and interim executive vice chancellor for health affairs.

The radiology-related investigation dates back to 2011. Late that year, MU learned that the United States Attorney’s Office in Kansas City was investigating possible billing irregularities involving Medicare and other federal health care programs served by the medical school’s Department of Radiology.

MU Health and the university began their own investigation in November 2011 to look into the issues identified by the government and shared the results of the investigation with government attorneys.

In June 2012, MU Health officials shared preliminary findings with the public and highlighted changes to the Department of Radiology. Among the changes announced was the immediate departure of Kenneth Rall and Michael Richards from their positions with the University of Missouri Health system.

At that time, then-Executive Vice Chancellor for Health Affairs Harold A. Williamson Jr. said, “We believe that two radiologists, Dr. Kenneth Rall and Dr. Michael Richards, violated Medicare and hospital rules by certifying that they had performed services that were actually performed by resident physicians.”

Under the health system’s procedures and Medicare rules, a resident physician can read a patient’s X-ray and work with the patient’s doctor to incorporate results of the X-ray into the patient’s care plan. Medicare rules require, however, that before Medicare will pay for the X-ray, an attending radiologist must also have reviewed the image. The investigation revealed Rall and Richards sometimes claimed that they had completed this second review without actually looking at the image, and that these practices were going on from at least March 2010 until November 2011.

“In May of 2012, when health system leaders learned what Drs. Rall and Richards had done, their primary concern was the impact on patients,” said Foley. “To that end, the health system engaged an independent expert to conduct an in-depth review of thousands of radiological images.”

The review ultimately identified 30 patients potentially at risk out of a total of 14,164 individuals whose radiology studies may not have been reviewed by Rall or Richards. MU Health physicians immediately began taking steps to notify these patients so they could arrange follow-up exams by their primary physicians. MU Health staff was able to locate and follow up with all but five of the 30 patients by engaging the services of the investigative firm Clarence Kelley & Associates, and the assistance of the federal government.

Since the radiology investigation and settlement negotiations began several years ago, the university has been budgeting and setting aside money from health system operating revenues to repay the federal government once a settlement was reached.

Story Contact: Mary Jenkins, jenkinsmg@health.missouri.edu, 573-882-7299

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