Auditor: Ex-UI physician diverted $1.9 million to personal accounts

A former University of Iowa orthopedic surgeon improperly diverted nearly $1.9 million into personal bank accounts over a 12-year period, according to a report released Thursday by State Auditor Mary Mosiman.

A special investigation was requested by UI officials because of concerns that Dr. Brian Adams was diverting collections from UI Hospitals and Clinics for providing services to UIHC patients and violating his contract by competing with UIHC.

"The matter was originally reported by a staff member who used our internal hotline to report a concern in 2013," UIHC spokesman Tom Moore said in an emailed statement.

Adams was employed by the UI Department of Orthopedics and Rehabilitation from Dec. 5, 1992, until his resignation on Aug. 21, 2014.

The investigation identified $1,884,169 of diverted collections that resulted from Adams improperly billing insurance companies and law firms for services he performed and royalties and consulting fees he received from companies for which he developed products, according to the report.

The diverted collections, according to the report, were deposited to Adams' personal bank accounts at MidWestOne Bank and to an account Adams established at Hills Bank using the name "UIHC Orthopedics." The bank statements for the account established at Hills Bank showed the UIHC address, the report says.

The report also found the diverted collections included payment for services routinely provided by UIHC and the department.

UIHC requires all its physicians to sign a contract prohibiting them from directly receiving personal payment for services performed within the scope of their employment and from engaging in the practice of medicine outside of their employment with UIHC, without prior approval of hospital officials, the report states.

The nearly $1.9 million in diverted collections identified includes:

•$404,875 for medical services provided by Adams to UIHC and non-UIHC patients that should have been deposited with UIHC.

•$426,447 for non-medical services, including depositions and expert witness fees related to UIHC.

•$1,050,124 of consulting fees and royalties from companies Adams represented or for which he helped develop products.

Adams declined to be interviewed as part of the investigation, according to the report.

The report includes a recommendation to for UIHC to strengthen internal controls and overall operations by confirming with local banks any accounts in which the account name features any variation of the university's name or the name of a hospital, clinic or department.

Mosiman also recommends UI and UIHC continue to improve and communicate the disclosure requirements related to conflicts of interest and conflicts of commitment.

"UI Health Care leaders reviewed the recommendations with the auditors and have reinforced the importance of following all university policies and procedures, including conflict of interest reporting," Moore said in the statement.

Reach Jeff Charis-Carlson at 319-887-5435 or jcharisc@press-citizen.com. Follow him on Twitter at @jeffcharis.