Department Of Justice Fraud Investigation Next For Health Management Associates

Dec. 04--As reported by the CBS news magazine show "60 Minutes," the U.S. Department of Justice is taking the lead in investigating whether or not Health Management Associates committed Medicaid, Medicare or any other fraud as alleged in the scathing report that aired Sunday evening.

DOJ spokesman Simon Lewis said Monday that he didn't immediately have information about an HMA.

HMA officials did admit that the chain was under a pending DOJ investigation.

Nils Frederiksen, spokesman for the Pennsylvania Attorney General's Office, likewise couldn't confirm or deny that any investigation by the DOJ or by the attorney general's office was taking place.

He did note that in general when it comes to these types of investigations, there is a duty to taxpayers.

"At the core of any fraud investigation is taxpayer money," Frederiksen said.

On the show, two former CRMC doctors alleged that the hospital's management asked emergency room doctors to admit patients who didn't require admission.

They said HMA had a quota in which physicians were expected to admit at least 20 percent of patients in the emergency room.

Another former HMA doctor, Jeff Hamby, who worked in Arkansas'sSummit Medical Center, said HMA also had a policy that required the admission of at least 50 percent of Medicare patients.

HMA officials and several CRMC heads, including CEO John Kristel, all denied the allegations.

Economic reality

The investigation has raised concerns in the medical community, which has come under scrutiny of late because some care facilities have used unscrupulous billing practices, according to "60 Minutes."

Those practices could be the undesired result of what a recent New York Times report said was new economic realities.

The paper said an array of new economic realities, from reduced Medicare reimbursements to higher technology costs, is driving consolidation in health care and transforming the practice of medicine in many communities.

In one manifestation of the trend, hospitals, private equity firms and even health insurance companies are acquiring physician practices at a rapid rate, according to the newspaper.

Today, about 39 percent of doctors nationwide are independent, down from 57 percent in 2000, according to estimates by Accenture, a consulting firm.

By one estimate, under its current reimbursement system, Medicare is paying in excess of $1 billion a year more for the same services because hospitals, citing higher overall costs, can charge more when the doctors work for them.

"A great deal of national media attention has been focused in the past few days on allegations that some physicians are being pressured, particularly emergency physicians, to make medical decisions that are financially beneficial to the hospital but may not be necessary for the care of the patient," Dr. C. Richard Schott, president of the 164-year-old Pennsylvania Medical Society, said in a statement to The Sentinel on Monday.

"As the state physician association, we can say that the best medical decisions are made when physicians, leading a team of health care providers, work closely with their patients without the presence of financial pressures," said Schott, who is also a practicing cardiologist from the Philadelphia area.

The medical society estimates that approximately 70 percent of physicians are now employed by a large group, hospital or health system and Schott said physician employees must put the needs of patients far ahead of their or their employers' economic needs.

"This is true even though financial pressures are mounting throughout the health care system," he said, adding that physicians need to lead and shape health care delivery to assure that the evolving system provides quality and value to patients and the community. "To make this vision a reality, we are working closely with CEOs of large physician groups, deans of Pennsylvania's medical schools, and, of course, physicians from the full range of specialties and types of medical practices."

HMA could face stiff consequences if any of the allegations are found to be true.

"Every hospital should have a compliance plan in place first," said Dennis Olmstead, the vice president of medical economics for the Pennsylvania Medical Society. "A hospital can be fined, required to refund monies inappropriately paid to them and ultimately could be excluded from participating in government sponsored programs, such as Medicare and Medicaid."

Likely, audits by non-government payers such as Highmark or Capital Blue Cross, might also be triggered.

Paul Meyer, a former 30-year veteran of the FBI whose last assignment had been supervising Medicare fraud in Florida before joining HMA, told "60 Minutes" that he believes HMA bases admissions on profit.

Meyer said he reached that conclusion two years ago after hearing complaints from emergency room doctors and others who said they were being pressured to fill beds with people who did not need to be admitted to the hospital. Meyer told the show that he audited four hospitals and concluded that HMA had intentionally billed Medicare and Medicaid for hundreds of thousands of dollars in inappropriate hospital stays that did not meet government standards for admissions or reimbursement.

"It was Medicare fraud. Simple as that," Meyer said on the program.

HMA officials said they hired an outside law firm to investigate Meyer's fraud allegations and found nothing to support them.

The company said it is fully cooperating with investigators.

(ASTERISK)Editor's Note: The lead of the story was changed to better reflect that the U.S. Department of Justice is investigating HMA for fraud.

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