Tacoma physicians group to pay state $259k in alleged overbilling case

Staff writerApril 30, 2014 

A Tacoma-based physician group will pay $259,649 to Washington’s Medicaid program in response to allegations that it knowingly overbilled the state over an eight-year period, the state Attorney General’s Office reported Wednesday.

“Providers who participate in our state’s Medicaid program must accurately bill for services provided and accurately document those services in the patient record,”  said Attorney General Bob Ferguson in a release.

The claims resolved in the case are allegations only. There has been no legal determination that Sound Inpatient Physicians engaged in fraudulent conduct. 

"Sound Physicians places a top priority on ethics and compliance," said Steven McCarty, the company general counsel, in a statement Wednesday afternoon.

"A number of years ago Sound Physicians significantly enhanced its Corporate Compliance Plan and Code of Conduct and Business Ethics Program," McCarty continued. "Negotiating this repayment allows Sound Physicians to maintain our focus on our top priorities, improving the care we provide our patients and enhancing the resulting outcomes they experience. From a business perspective, while admitting no liability or wrongdoing, we determined the best course was agreeing to a nominal repayment to avoid the excessive distraction, uncertainty and expense of what promised to be a lengthy and complex investigation."

Sound employs hospitalists and other physicians who provide care to patients at hospitals and other facilities.  Hospitalists are physicians who provide in-patient care to hospital and other facility patients. Sound contracts with hospitals and other facilities to provide these services.

The Attorney General’s Medicaid Fraud Control Unit alleged that, between 2004 and 2012, Sound knowingly submitted inflated claims for higher and more expensive levels of service than were documented by the hospitalists in patient medical records. 

Sound faced similar allegations made by the federal government and a whistleblower in 2013. As part of its agreement with the federal government, Sound was required to participate in an annual audit by an independent contractor for five years to ensure that the overbilling does not occur in the future. As part of the agreement announced today,Washington is requiring Sound to include review of Washington claims in that annual audit as well.

The fraud control unit worked with the Washington State Health Care Authority to bring this case under Washington’s Medicaid False Claims Act, which was enacted by the Legislature in 2012.


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