At UMDNJ "The Rules of the Game Have Changed"

As auditors continue to investigate the finances of the University of Medicine and Dentistry of New Jersey (UMDNJ), new problems continue to surface.

We have posted extensively at the troubles at UMDNJ, which now is operating under a federal deferred prosecution agreement with the supervision of a federal monitor (most recently here).

The indefatigable reporters at the Newark Star-Ledger have revealed yet another problem, possiblly massive over-billing by UMDNJ of Medicare. " While auditors are still trying to determine the extent of the problem, the amount involved far exceeds the $4.9million in fraudulent billing outlined in a separate federal criminal complaint against UMDNJ in December." " The new billing problems were uncovered last week, as part of an examination of the annual cost reports submitted to the Centers for Medicare & Medicaid Services, according to two officials with direct knowledge of the investigation." "At issue were costs associated with the university's mental health division, University Behavioral HealthCare, and whether UMDNJ-University Hospital padded those costs with its own administrative expenses. If the federal cost reports were inflated, the hospital would be reimbursed at a higher rate than it is legally entitled to receive. The sources said the hospital may have submitted reports that funneled an additional $50million to $70million in unwarranted reimbursements."

Meanwhile, the Dean of one of UMDNJ's two medical schools, Dr Harold Paz, has resigned. His new job will be Senior Vice President for Health Affairs, Dean of the Medical School, and CEO of Hershey Medical Center at Pennsylvania State University. Thus both of UMDNJ's medical schools for the moment will be operating with acting deans.

Furthermore, UMDNJ's new interim president, Bruce C. Vladek, has come on board while putting all his constituents on notice that it will no longer be business as usual at UMDNJ:

People are all on notice that there is no tenure in the management structure of this organization. I feel empowered to restructure the administrative staff of this organization, subject to consultation and approval of the board, however I feel is necessary.
The rules of the game in this place have changed, and they haven't been changed by us. Even though the state is our lifeblood, we cannot, as a matter now of law, engage in some of the kinds of behaviors that have existed in the past. Some of the kinds of things that have (been) reported -- that may have become standard operating procedure in the past -- we cannot do anymore.

It sounds like he has the right idea, but will have a lot of work to do.

But he also noted,

As far as I know, the very, very real problems here are largely isolated from the educational, clinical and research activities of the university.

I do beg to differ somewhat with this. I am sure that UMDNJ has many dedicated professionals and faculty who have been working hard to keep the clinical and academic missions on track. Yet I am not sure how "isolated" they have been from the problems. It must have been demoralizing to work under the previous UMDNJ administration, which has now been revealed as scandal-ridden. I can only hope that their morale is improving now. Hopefully, the new leaders of UMDNJ will be worthy of their trust.

The case of UMDNJ should be a wake-up call for those who thought that business as usual was just a fine way to run the health care system. However, although this case, like that of UCI, has gotten plenty of local attention, it seems not to have been noticed outside of its region, nor in medical, health care, and health policy journals. As far as I can tell, the only place to see these cases juxtaposed is here on Health Care Renewal.