The University of California and the U.S. Department of Justice have recently reached a settlement agreement that ends a long-standing dispute over Medicare billing documentation practices.

The university's five schools of medicine will refund $22.5 million to the federal government in connection with documentation of 1990-1998 Medicare billings. UCLA's share of the payment is $8.5 million.

The dispute springs from a series of nationwide audits by the Office of the Inspector General of the Department of Health and Human Services (HHS) at more than 40 university teaching hospitals. The PATH (Physicians at Teaching Hospitals) audits examined the administrative procedures and technicalities of how teaching physicians have billed Medicare when medical residents were involved in patient care.

"There was no finding of fraud or intentional misconduct," explained James Terwilliger, vice provost for administration at UCLA Medical Center. "The main issue in the audit became one of trying to come to an agreement on technical billing questions. These rules are very complex, and they have changed a great deal over time."

Federal officials, including two former heads and the general counsel of HHS, admitted that the guidelines regulating Medicare billing have been complex and vague, creating a great deal of confusion over the years, noted John Lundberg, deputy general counsel to the UC Regents.

The decision to settle, said Terwilliger, was strictly an economic one to avoid long, complicated and very costly litigation.

"We're happy it's over, but UC spent $15 million on lawyers and consultants to bring this to a close," Terwilliger said. "When you consider that this is not a great time financially for teaching hospitals, it's a little hard to swallow, given that there was no fraud or any kind of intentional misconduct found."