CalPERS Pays Tenet 50% More for Member Hospital Stays Than Other Hospitals in the State, Report Finds
CalPERS paid Tenet Healthcare hospitals in California about 50% more on average than other hospitals in the state for member hospital stays in 2002, according to a report prepared by CalPERS, the Sacramento Bee reports. According to the report, compiled by Blue Cross of California, CalPERS paid Tenet hospitals an average of $15,213 per member hospitalization in 2002, compared to $10,326 at other hospitals in the state. The report examined "how high charges at several Tenet hospitals triggered 'stop-loss' payments that are supposed to compensate hospitals for exceptionally costly, complex cases," the Bee reports. Under standard contracts, HMOs pay hospitals a flat fee for charges until they reach a negotiated stop-loss amount, after which HMOs pay a percentage of the total charges. The report found that about 25% of CalPERS members admitted at two Tenet hospitals -- Redding Medical Center and Doctors' Medical Center in Modesto -- had charges that required stop-loss payments, compared to 3% at other hospitals in the state. Tenet spokesperson Steve Campanini did not comment on the report. In response to the report, Assembly member Dario Frommer (D-Glendale), chair of the Assembly Health Committee, said that he will ask Tenet and CalPERS for an explanation at a legislative hearing on hospital billing scheduled for tomorrow. "This is a warning signal for us to look at whether other hospitals have gamed the state and whether CalPERS is doing everything they should be to spend taxpayer money prudently," Frommer said (Rapaport, Sacramento Bee, 2/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.