Dr. Prem Reddy

Lance Williams, Stephen K. Doig,Christina Jewett, California Watch
Monday, November 28, 2011

For three years, a small hospital east of Los Angeles has billed Medicare for the costs of confronting what appears to be a cardiac crisis of unprecedented dimension.

From 2008 through 2010, Chino Valley Medical Center in San Bernardino County claimed that 35.2 percent of its Medicare patients were suffering from acute heart failure – a dangerous, often-deadly breakdown in the heart’s ability to pump blood.

That’s six times the state average, according to a California Watch analysis of Medicare billing data.

This reported surge of heart failure among older patients entitled the hospital’s parent company, Prime Healthcare Services, to bonus treatment payments from the federal government worth thousands of dollars per case, Medicare records show.

The hospital appears to have taken advantage of Medicare rule changes that authorized bonus payments for treating patients with major complications.

In 2006, before Medicare began making bonus payments, the hospital reported no acute heart failure cases, records show. From 2008 through 2010, after the new reimbursement system was phased in, the hospital said it treated 1,971 Medicare patients for acute heart failure, according to the billing data.
Bonus payment trigger

Without access to internal records, it’s impossible to determine how Prime billed for its cases of acute heart failure. But in 88 percent of the cases, it was listed as a secondary diagnosis that typically would trigger bonus payments.

Prime attorney Anthony Glassman said in a letter that the heart failure diagnoses at Chino Valley were accurate and were made by treating physicians, not the hospital itself. He said California’s Watch’s analysis was “faulty, unfair and biased.”

Chino Valley has a high rate of acute heart failure because its patients are especially prone to the ailment, Glassman wrote: Compared with other hospitals, more patients come from nursing homes, and an “exceptionally high” number of heart patients are admitted via the emergency department.

But when California Watch excluded patients from nursing homes and focused solely on patients admitted from the emergency room, the acute heart failure rate at Chino Valley dropped only 1.5 percentage points, to 33.7 percent – still the highest in California and five times the state rate.

Two heart specialists said it would be unlikely for a hospital to have a heart failure rate anywhere near what has been claimed at Chino Valley.

“You don’t see (hospitals) where 35 percent of the Medicare population has heart failure,” said Dr. Gregg Fonarow, medicine professor at UCLA and director of the Ahmanson-UCLA Cardiomyopathy Center. “Even 10 percent would be unusual.”

Fonarow said his review of national data shows about 5 or 6 percent of Medicare patients have acute heart failure as a primary diagnosis.

When cardiologist Dr. Steven Shayani, president of the New York Heart Research Foundation, was apprised of the heart failure rate at the hospital, he asked why Medicare officials weren’t investigating.

“Acute heart failure is very prevalent, as you know,” he said. “However, there is no way of explaining” Chino Valley’s high rate, he said. “It doesn’t make any sense.”
Experts suspicious

Both experts said they suspected the high rate at Chino Valley reflects exaggerated diagnoses by doctors or by the hospital’s coders, who prepare computerized Medicare bills to obtain reimbursement from the government.

California Watch’s analysis focused on Medicare billing data provided by the hospitals and compiled by the state Office of Statewide Health Planning and Development. The analysis looked at every general hospital in the state that treated at least 300 Medicare patients age 65 and older per year – 273 hospitals in all. Convalescent hospitals were excluded, as were the hospitals in the Kaiser Permanente managed-care chain because of billing differences.

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