The $35 million that University of Washington agreed to pay to end a four-year investigation into its physician practice plans' billing practices is the largest amount paid to date in a PATH settlement, according to the U.S. Attorney for the Western District of Washington, John McKay. As part of the settlement, the University of Washington billing plans also entered into a five-year Institutional Compliance Agreement with the OIG. United States ex rel. Erickson v. University of Washington Physicians, No. C99-1261R (W.D. Wash. Apr. 30, 2004).

In an April 30, 2004, press release, McKay described the failure on the part of officials within the University of Washington billing plans to address and report billing problems uncovered by compliance plan audits. The whistleblower complaint, filed in 1999 by a former University of Washington auditor, alleged that when compliance audits revealed "pervasive and egregious upcoding," University officials revised audit protocols to produce more "sanitized" results, and instructed auditors to destroy the original reports and replace them with "sanitized versions." In addition to the upcoding allegations, the qui tam complaint alleged that University of Washington submitted false claims for insufficiently documented teaching physician services and revised medical records to "fabricate support" for billings for assistants at surgery, dialysis care, and postoperative care provided by residents.

The settlement amount includes a $7.25 million payment to the whistleblower. The investigation also yielded guilty pleas to criminal charges on the part of two University of Washington physicians, one for obstruction of a federal criminal health care investigation and another for health care billing fraud.

In a statement issued April 30, Dr. Paul G. Ramsey, the university's vice president for medical affairs and dean of the School of Medicine, said that "most of these errors were the result of innocent mistakes" and "occurred during a period when federal rules involving Medicare and Medicaid billings were changing and widely acknowledged to be confusing." During the course of the investigation, Ramsey stated, the university made comprehensive changes to enhance its billing compliance system, which now costs the university nearly $4 million a year.