Take­aways from HCA heart probe

HCA case high­lights fis­cal, le­gal pres­sures on ex­ecs

Modern Healthcare - - FRONT PAGE - Joe Carl­son

With po­ten­tial whis­tle-blow­ers lurk­ing in ev­ery oper­at­ing room in the coun­try, hospi­tal ex­ec­u­tives must be­come more vig­i­lant in ac­tively seek­ing out and in­ves­ti­gat­ing med­i­cal pro­ce­dures that could be con­strued as un­nec­es­sary, med­i­cal and le­gal ex­perts say.

Heart pro­ce­dures and the im­plan­ta­tion of car­diac de­vices in par­tic­u­lar have come un­der scru­tiny by fed­eral pros­e­cu­tors and plain­tiffs’ at­tor­neys be­cause of their high costs and uti­liza­tion rates. Those fac­tors, com­bined with the over­all pub­lic alarm over Medi­care fraud, have led to a grow­ing num­ber of in­quiries such as the one an­nounced last week into Nashville-based hospi­tal chain HCA.

The com­pany, which op­er­ates 163 hos­pi­tals, dis­closed in an Aug. 6 quar­terly earn­ings call with in­vestors that the U.S. at­tor­ney’s of­fice in Miami re­quested to see the re­sults of med­i­cal-ne­ces­sity re­views that the com­pany is do­ing on its in­ter­ven­tional car­di­ol­ogy ser­vices.

HCA dis­closed in a fil­ing with the Se­cu­ri­ties and Ex­change Com­mis­sion that day that com­pany of­fi­cials have re­viewed car­di­ol­ogy cases at about 10 hos­pi­tals, mostly in Florida, but the search for such re­views re­mains on­go­ing. HCA didn’t give a time­line for when the in­for­ma­tion will be turned over.

The day of the dis­clo­sure, HCA’S stock price dropped 4% but has since re­bounded (See chart). Si­mul­ta­ne­ously, HCA de­fended its clin­i­cal prac­tices in a four-page state­ment pre-empt­ing a New York Times story posted on­line later that evening re­port­ing that the chain had in­ter­nally un­cov­ered ev­i­dence of un­needed pro­ce­dures be­tween 2002 and 2010.

Key le­gal ob­servers said in in­ter­views that the fed­eral probe of HCA may have its roots in a fed­eral whis­tle-blower law­suit un­der the False Claims Act that re­mains un­der seal. Also known as “quitam” law­suits, such cases of­ten re­main se­cret for years, even from the tar­gets of the lit­i­ga­tion, as gov­ern­ment lawyers in­ves­ti­gate al­le­ga­tions lev­eled by pri­vate in­di­vid­u­als.

“These types of cases are of­ten brought by whis­tle-blow­ers be­cause you re­ally do re­quire some sort of in­sider in­for­ma­tion about how med­i­cal pro­ce­dures are tak­ing place to get it started,” said Stephen Meagher, the Cal­i­for­nia whis­tle-blower at­tor­ney whose law­suits against HCA sparked an in­ves­ti­ga­tion that led to the com­pany—then known as Columbia/HCA Health­care Corp.—to pay a $1.74 bil­lion be­tween 2000 and 2003 to re­solve Medi­care fraud al­le­ga­tions.

Meagher said he does not rep­re­sent a whis­tle-blower to­day in any case against HCA. How­ever, two for­mer high-rank­ing fed­eral pros­e­cu­tors in Florida con­firmed in in­ter­views with Mod­ern Health­care that the fed­eral in­quiry of HCA ap­pears to be based on in­sider ma­te­ri­als pro­vided by a whis­tle-blower. And HCA’s state­ment to in­vestors noted that it could not pre­dict the ef­fect of “any po­ten­tial claims un­der the fed­eral False Claims Act.”

HCA of­fi­cials and the fed­eral pros­e­cu­tor’s of­fice in Miami de­clined to com­ment.

Mean­while, one plain­tiff’s law firm—Leopold Law in Palm Beach Gar­dens, Fla.—con­firmed to Mod­ern Health­care that it has re­ceived in­quiries from HCA pa­tients about a pos­si­ble mal­prac­tice law­suit in­volv­ing car­diac pro­ce­dures. But his­tory shows that law­suits and in­ves­ti­ga­tions based on ques­tions of med­i­cal ne­ces­sity are tough to win in court be­cause so much de­pends on sub­jec­tive physi­cian judg­ment. “Yes, med­i­cal-ne­ces­sity cases can be hard to prove,” said A. Brian Albrit­ton, for­mer U.S. at­tor­ney in Or­lando, Fla., and now an at­tor­ney with Phelps Dun­bar. “They’re of­ten based on sta­tis­ti­cal ab­nor­mal­i­ties rather than di­rect ev­i­dence that a spe­cific pro­ce­dure was un­jus­ti­fied.”

In 2003, Dal­las-based hospi­tal chain Tenet Health­care Corp. paid $395 mil­lion to set­tle claims with more than 750 for­mer pa­tients who filed law­suits against the com­pany; Tenet also paid more than $54 mil­lion to re­solve state and fed­eral al­le­ga­tions that physi­cians at one of its hos­pi­tals pro­vided med­i­cally un­nec­es­sary car­diac pro­ce­dures.

Whis­tle-blow­ers who ini-

tially brought that case against Tenet’s Red­ding (Calif.) Med­i­cal Cen­ter re­ceived an $8.1 mil­lion share of the gov­ern­ment set­tle­ment (Jan. 12, 2004, p. 18). Tenet sold the hospi­tal af­ter the al­le­ga­tions came to light.

Ex­perts say that while car­di­ol­ogy pro­ce­dures are high-mar­gin ser­vice lines that sub­si­dize un­prof­itable ones, the busi­ness strat­egy comes with high risk as it also at­tracts a healthy dose of le­gal scru­tiny.

In 2010, for ex­am­ple, St. Joseph Med­i­cal Cen­ter in Tow­son, Md., paid $22 mil­lion and en­tered a cor­po­rate in­tegrity agree­ment to re­solve fed­eral whis­tle-blower lit­i­ga­tion with­out ad­mit­ting to al­le­ga­tions that it prof­ited from med­i­cally un­nec­es­sary car­diac pro­ce­dures by Dr. Mark Midei. The doc­tor de­nied the al­le­ga­tions that cost him his med­i­cal li­cense, but the hospi­tal is still in lit­i­ga­tion with some of the 585 for­mer pa­tients no­ti­fied about the sit­u­a­tion.

A dif­fer­ent Mary­land car­di­ol­o­gist, Dr. John McLean, was con­victed and sen­tenced to eight years in prison last year for per­form­ing un­nec­es­sary pro­ce­dures on more than 100 pa­tients at an­other hospi­tal, Penin­sula Re­gional Med­i­cal Cen­ter, Sal­is­bury, Md., whose ad­min­is­tra­tors agreed to pay the fed­eral gov­ern­ment $1.8 mil­lion and en­ter a cor­po­rate in­tegrity agree­ment with HHS for fail­ing to stop McLean’s un­needed pro­ce­dures.

In the Pitts­burgh area, UPMC Hamot hospi­tal in Erie, Pa., is fight­ing a False Claims Act law­suit from one of its for­mer car­di­ol­o­gists, Dr. Tullio Emanuele, al­leg­ing that the hospi­tal paid kick­backs to a med­i­cal prac­tice that is ac­cused of con­duct­ing med­i­cally un­nec­es­sary car­diac pro­ce­dures in which two pa­tients died. The hospi­tal and physi­cians have de­nied the al­le­ga­tions in court fil­ings and re­quested the law­suit be dis­missed.

Dr. John Harold, a car­di­ol­o­gist as­so­ci­ated with the Cedars-Si­nai Heart In­sti­tute in Los Angeles and pres­i­dent-elect of the Amer­i­can Col­lege of Car­di­ol­ogy, said that in the face of such scru­tiny, physi­cians and hos­pi­tals need to en­sure they can doc­u­ment and ex­plain their de­ci­sion­mak­ing with car­diac cases.

HCA’s dis­clo­sure of the fed­eral probe on Aug. 6 co­in­cided with the pub­li­ca­tion of a crit­i­cal story in the New York Times that quoted a for­mer nurse say­ing he wit­nessed med­i­cally un­nec­es­sary pro­ce­dures at an HCA hospi­tal. Al­though the news­pa­per re­ported that the nurse’s al­le­ga­tions were proven true by an in­ter­nal re­view, the hospi­tal did not re­new the nurse’s con­tract shortly af­ter, ac­cord­ing to a trove of in­ter­nal com­pany records the Times ob­tained.

“One of the most un­for­tu­nate things about this story is that the worker lost his job for rais­ing con­cerns. From a so­ci­etal per­spec­tive, that is of great con­cern,” said Dr. Ray­mond Gib­bons, a car­di­ol­o­gist with the Mayo Clinic, Rochester, Minn., and past pres­i­dent of the Amer­i­can Heart As­so­ci­a­tion. “That is just aw­ful. If we lose that as a mech­a­nism be­cause peo­ple are afraid of los­ing their jobs, the longterm con­se­quences of that are very bad.”

Gib­bons said he has no par­tic­u­lar knowl­edge of the HCA sit­u­a­tion be­yond what the news­pa­per pub­lished.

Ac­cord­ing to in­ter­views and tes­ti­mony cited in the Times story—which ran on­line late on Aug. 6 and in print the fol­low­ing day—physi­cians at three cur­rent or for­mer HCA hos­pi­tals in Florida had per­formed un­nec­es­sary car­diac pro­ce­dures on pa­tients, at least two of whom suf­fered harm from the care.

Al­though the story re­ported that the com­pany did in­ves­ti­gate the claims and strip some physi- cians of their cre­den­tials, HCA de­clined to com­ment to the Times whether it no­ti­fied pa­tients about un­needed pro­ce­dures.

One in­ter­nal e-mail cited by the pa­per al­legedly quoted an HCA em­ployee who said the com­pany had suc­cess­fully used con­fi­den­tial­ity rules to shield a dam­ag­ing in­ter­nal re­view on med­i­cal ne­ces­sity from the state at­tor­ney gen­eral’s of­fice. HCA dis­puted that in the story, say­ing it pro­vided “sub­stan­tially all of the in­for­ma­tion in the re­port” to au­thor­i­ties.

HCA’s un­signed writ­ten com­ment on the forth­com­ing news­pa­per story said med­i­cal ne­ces­sity of pro­ce­dures in­clud­ing car­diac catheter­i­za­tion and stent im­plan­ta­tions are the re­sult of physi­cian-led de­ci­sions that are “the sub­ject of much de­bate within the car­di­ol­ogy community.” That de­bate leads to sig­nif­i­cant vari­a­tions in vol­umes across the coun­try, within ge­o­graphic re­gions, and even among the same med­i­cal staffs, in some cases, HCA said in the state­ment.

“Vari­a­tion and dis­agree­ment among physi­cians in­di­cates the dif­fi­culty in de­ter­min­ing the med­i­cal ne­ces­sity of these pro­ce­dures,” the HCA state­ment said, not­ing also that HCA’s vol­umes of car­diac in­ter­ven­tions are com­pa­ra­ble to the na­tional av­er­ages.

The Dart­mouth At­las of Health Care, a re­search project at Dart­mouth Col­lege in Le­banon, N.H., has doc­u­mented re­gional vari­a­tions in health­care among Medi­care pa­tients. For ex­am­ple, with coro­nary in­ter­ven­tions, Arkansas pa­tients re­ceived 14.3 pro­ce­dures per 1,000 en­rollees, com­pared with 6.1 in New Hamp­shire, the data showed. Florida, at 10.2, was al­most ex­actly equal to the na­tional av­er­age of 10 in 2007, the most cur­rent data avail­able.

More re­cently, aca­demic analy­ses of data in the Na­tional Car­dio­vas­cu­lar Data Reg­istry pro­duced two stud­ies for the Jour­nal of the Amer­i­can Med­i­cal As­so­ci­a­tion that in 2011 found high rates of heart pro­ce­dures that may not have been jus­ti­fied by ev­i­dence.

In one study, in­ves­ti­ga­tors con­cluded that 22.5% of im­planted car­dioverter de­fib­ril­la­tors did not meet Medi­care cov­er­age guide­lines. A fed­eral probe into ICD use at hun­dreds of U.S. hos­pi­tals is on­go­ing, with a res­o­lu­tion pos­si­ble as soon as this fall (July 23, p. 6). Ninety-five HCA hos­pi­tals are un­der re­view in that in­ves­ti­ga­tion, the com­pany re­ported pre­vi­ously in SEC fil­ings.

Mayo’s Gib­bons said the na­tional car­diac overuse prob­lem stems from Medi­care’s fee-forser­vice sys­tem, which cre­ates sys­temic in­cen­tives for high vol­umes in­stead of qual­ity of care. It’s not a new ob­ser­va­tion, he said, not­ing that Pres­i­dent Lyn­don John­son spoke about it not long af­ter sign­ing Medi­care into law. “He said we have a prob­lem, we need to change the pay­ment sys­tem,” Gib­bons said. “It was the late ’60s. That was 45 years ago. We haven’t changed it yet.”

Late Fri­day af­ter the stock mar­ket closed, HCA is­sued an updated state­ment, this one ad­dress­ing some of its clin­i­cal and busi­ness prac­tices in an­tic­i­pa­tion of what it said is a sec­ond New York Times story crit­i­cal of the hospi­tal chain.

The two-page up­date to the orig­i­nal four­page state­ment ad­dressed such is­sues as emer­gency room prac­tices, rates of pres­sure ul­cers and pri­vate-eq­uity in­vest­ments from sev­eral sources, in­clud­ing Bain Cap­i­tal, the Frist fam­ily and KKR. In the updated state­ment, HCA said it uses in­dus­try-ac­cepted stan­dards in seek­ing re­im­burse­ment for emer­gency care. The com­pany said the rate of pres­sure ul­cers at its hos­pi­tals is well be­low the na­tional av­er­age for all hos­pi­tals. And, it said, “KKR and Bain Cap­i­tal, as well as the Frist fam­ily, have been val­ued part­ners, and we look for­ward to their con­tin­ued in­volve­ment with the com­pany.”

Wide vari­a­tions in the rates of sur­gi­cal pro­ce­dures and in physi­cians’ ad­her­ence to clin­i­cal guide­lines have opened the door to scru­tiny from the gov­ern­ment, plain­tiffs’ at­tor­neys and pa­tients.

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