Infection Cases Prompting Fraud Concerns at Calif. Hospital Chain
HHS and the Department of Justice are investigating whether a surge in infections among hospitalsÂ run by California-based Prime Healthcare Services reflects serious healthÂ issues or possible Medicare fraud, according to a California Watch analysis, the Los Angeles Times reports.
Background on Septicemia
During fiscal year 2008, Prime Healthcare reported an unusually high rate of septicemia infections, or blood poisoning, at its hospitals. The infections typically occur in hospitals that have improper infection control procedures.
Medicare pays significantly more to treat septicemia compared with less-severe hospital-acquired infections. As a result, some hospitals could file false septicemia claims to receive the higher payments, according to officials.
Concerns About Possible Fraud
In July, Democratic Reps. Henry Waxman (Calif.) and Pete Stark (Calif.) sent a letter to the HHS Office of the Inspector General requesting the investigation of Prime Healthcare. The lawmakers said they sought the investigation after reviewing a computer analysis of Medicare billings conducted by the Service Employees International Union.
SEIU's analysis suggests that Prime Healthcare might have overbilled Medicare by $18 million for septicemia claims in 2008, according to the representatives.
The SEIU analysis found that the septicemia rate at Prime Healthcare hospitals was nearly 16%, which is three times higher than the national average among Medicare patients. However, Prime Healthcare's mortality rate for septicemia patients was 38%, which is below the national average. According to the SEIU analysis, the two figures suggest that Prime Healthcare might have committed "upcoding" by inflating diagnoses to bring in higher Medicare reimbursements.
Mark Geiger -- director of the state Bureau of Medi-Cal Fraud & Elder Abuse -- said the state attorney general's office began a criminal investigation into similar allegations against Prime Healthcare about one year ago, after receiving information from a different source.
Prime Healthcare Response
In e-mails and interviews, Prime Healthcare officials denied that the company had committed wrongdoing.
Ajith Kumar, reimbursement management director at Prime Healthcare, said the allegations are "part of an effort by the SEIU to extort concessions from Prime Healthcare in contract negotiations" that are taking place at Centinela Hospital Medical Center in Inglewood.
Kumar said Prime Healthcare has reported relatively high rates of septicemia because the company emphasizes "early detection and treatment" of the illness. He added that "sicker patients are being admitted" to Prime Healthcare hospitals because of the company's focus on emergency department admissions (Williams/Jewett, Los Angeles Times, 10/12).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.