I-Team: Audit of UNR’s School of Medicine hidden from public


An explosive but confidential audit which investigated reports of widespread billing errors within the University of Nevada medical school has been kept quiet for more than two years.

It’s only been known to a handful of officials in the higher education system. But the confidentiality is about to end.

It is pretty easy to see why this has been kept under lock and key for two years. The audit uncovered incompetence on a massive scale, and quite possibly, fraudulent billing that continued for years within the University of Nevada’s medical school practice.

The I-Team has been asking for a copy of the report for weeks. Two days ago, the state said no because it is private and confidential — not anymore.

READ: State’s response to the I-Team requesting the audit report

When prominent surgeon Dr. Kayvan Khiabani died after veering his bicycle directly into a bus in April 2017, the public assumed it had been a terrible accident.

Last month, Dr. Khiabani’s family was awarded a $19 million judgment to be paid by the bus company but some of his colleagues suspected it wasn’t an accident.  A day before he died, Khiabani was told by his employer, the University of Nevada, Reno School of Medicine that he was being let go.  

The reason for his dismissal has never been made public, but hints are contained in a forensic audit, paid for by the public, but kept secret for two years.

The audit by an independent firm, “Crowe Horwath,” uncovered systemic problems within the University of Nevada, Reno Medical School’s billing procedures: overbilling, underbilling, lack of oversight, and potential legal consequences.

The I-Team combed through the list of salaries paid by UNR’s medical school, Dr. Khiabani was right at the top. Although he was a faculty member at a public university, he was paid more than a million dollars in 2016.

Another UNR surgery professor was right there behind him, and the list of state employees earning more than half a million dollars per year largely consists of UNR medical faculty.

The I-Team asked — how can public employees earn so much?

When the governor and state lawmakers got behind the creation of a medical school at UNLV, it was not well received by UNR supporters.

UNR’s School of Medicine had expanded into Las Vegas.  Its faculty doctors practiced in the south, mostly at UMC and related clinics, but their employer was still up north.

Memos obtained by the I-Team reveal that by 2015, officials at UNLV’s burgeoning medical school were troubled by reports they received about major shortcomings within UNR’s practice plan — particularly its billing procedures.

Several medical students, as part of their residency training, had witnessed what I-Team sources describe as outright fraud: doctors billing for expensive surgeries that were never performed, charging for high-priced equipment that was never used, billing providers for hour-long appointments that lasted only minutes. The doctors repeatedly reported the abuses to higher ups, but the complaints went nowhere.

Since UNLV was in the process of taking over UNR’s practice plan, including its doctors and faculty members, it wanted a full accounting. UNR was bleeding money.  A 2015 email from then-Chancellor Dan Klaich indicated a $2 million loss in just the first quarter.

Klaich noted he was getting radically different stories about problems in the system, UNR telling one version and UNLV telling another.  UNLV pushed for a full audit, UNR pushed back. When the audit was finally finished, it confirmed many of the worst suspicions.

The audit selected 10 case files for each of the doctors in the UNR system. Errors were rampant. The national average for billing errors in many categories is around 3 – 5 percent. At UNR, nearly all of the doctors were at 20 percent or above. Sixty to 90 percent error rates were common in categories listed as critical by the auditors. Auditors described the error rates as “unacceptable” and recommended remedial education for most of the faculty.

University sources tell the I-Team, the billing errors amounted to millions of dollars per year, not only overbilling of Medicare, Medicaid, and private insurance, but also underbilling or no billing at all, as case files got lost in the system, hundreds of thousands of dollars’ worth.

Medical school surgeons, including Dr. Khiabani, were paid flat salaries but I-Team sources say surgeons had a financial incentive to bill for more operations because they were given a piece of the action.

UNLV told UNR that it would not accept Dr. Khiabani into its practice plan when it took over. In the audit report, Khiabani was shown to make billing errors 30 percent of the time, putting him well down the list of offenders.

Over the last few weeks, the I-Team has sought comments from multiple state and university officials. All have declined.  A lawyer for the higher education system told the I-Team, the audit report is considered confidential between an attorney and a client and it will not be made public.

(UNR School of Medicine Dean Thomas L. Schwenk, M.D. did issue a response to the I-Team’s report the day after it aired. You can read it here.)  

It isn’t clear whether elected regents were told about the audit report because it does not appear on any of the board’s public meeting agendas.

Federal law is very clear when it comes to Medicare and Medicaid overbilling. Anyone who overcharges is required to report it within 60 days, and then must pay back the money.

UNR has not reported its audit findings, nor has it paid the money back. It would not be a surprise if the university gets a call from federal officials soon. 

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