September 1, 2004 News



Money Issues and Socialization


Response to Last Article


A study in the Journal of Managed Care showed that hospitalist ordered about $1000 less services and discharged patients one day sooner than internists.  This was a study at the University of Iowa covering 1700 admissions.  The changes represented an overall decrease in hospital costs of about 10%. 

A study of physician executives revealed that they are finding more physicians being disruptive.  They do not define disruptive, so it remains in the subjective arena.  I agree with the study.  As hospitals are focusing more on the bottom line and less on patient care, those physicians who care about patients are starting to speak out and cause the hospital pain and embarrassment.  They are disruptive to the hospital but not to the patient.  It seems that in order to be kept from being tossed off the staff, the physician must report the problem not only to the hospital but also to an outside agency.  This may make the hospital more angry but also may save the physician's career. The survey says it usually is the same physician over and over again.  I also agree with this, since I consider most physicians sheep.  They just want their paycheck and not make waves.  Thee are only a few that are willing to stand up and be counted.  Having said all that, there is no place for abusive behavior in the field of medicine.         Top


The CMA has issued a statement in the Community Hospital  of Ventura fiasco that is ending with the medical staff getting all it set to obtain.  The CMA representative, Greg Abrams, stated that one of the issues was the right of the medical staff to have its own attorney.  He states that hospital recommended bylaws changes, quality issues being decided by the hospital without medical staff input, external medical chart reviews without medical staff knowledge, and administrators demanding to be part of medical staff meetings are warning signs that the medical staff may be losing its autonomy.  That could never happen in your hospital, could it?  Hello Sutter.

Yep, it's them again.  Dear Drew/King Hospital is again in the limelight.  In mid August, the ER nurses and orthopedic personnel did not report for work.  This caused the ED to close for about 60 hours and the orthopedic clinic to close as well.  During the time of the crisis the JCAHO was at the hospital inspecting the Psychiatry program.  Earlier in the month the orthopedic residency had come under fire for intimidation of the residents and now the "hospital" will start to close the training program next year.  

Drew/King is not the brightest bulb.  They have allowed an orthopedic surgeon at the hospital to use his own device in patients he operates on at the hospital.  The hospital purchases the device from the company, a violation of their own policy.  They have admitted knowing about the arrangement since May but did not do anything about it until the story was published in the LA Times.  They stated the lame excuse of not wanting to interfere with the doctor-patient relationship.  The device is very expensive and non-reusable in relation to other devices of the same kind in the market.  The behavior of the hospital in its oversight of all areas is inexcusable.

The oldest hospital in California's San Fernando Valley will close its doors.  This is due to the declining reimbursements and the increase costs of the seismic building and the new onerous nurse staff ratios in the state.  This puts increased pressure on the remaining ED in the LA area.  This was announced just after another LA hospital announced their closing.  

The LA Times also reported that three more larger hospitals will close their EDs by year end.  This would increase the load on the system by an additional 10%-15%.  The main reason for the closures is the huge amount, 1/3, of uninsured in the county that use the ED as their physician and don't pay the bill.  The other reason is the county has closed 16 clinics to save money and has forbid the transfer of uninsured patients from private to public hospitals.  The law of unintended consequences show the county to be the fault of the potential major problem.

In another article the LA Times reported that San Bernardino's Community Hospital is on the verge of disaster.  They are losing about $1 million a month for the past 24 months.  This is a CHW hospital but the medical staff is potentially going to take over the hospital.  The hospital serves mainly low income residents in the San Bernardino area.  The sources of the problem are decreasing revenue by the Feds and increasing expenses in the form of the nurse ratio and higher malpractice costs.  

Antelope Valley Hospital in Lancaster, California, has just stopped taking emergency orthopedic patients. The patients will need to be sent to the one hospital nearby or a long trip into LA.  They have six Orthopods on staff but only one is willing to take call and that's once a week.  The others are over 60 years old and do not have to take call according to the bylaws.  In order to take call, they would want payment of $1500 per day.  The hospital is not willing to pay that much and so will close its emergency orthopedics and continue to look for younger people to work at the hospital.  They have tried for the past nine years to attract new orthopedic surgeons and have them stay without success.  It sounds like they will not fare any better now.  

In Miami, Florida, Jackson Memorial Hospital is going into its fourth year in a money losing mode.  The hospital is planning to lay off a large number of non-nursing union employees and the unions want the hospital to get more tax money.  

The USA Today has an interesting article on non-profit hospitals being targeted by the taxing agencies for not following their own rules.  This does not include the recent limelight shown on them for the egregious collection practices for uninsured patients.  Even though the IRS is now getting into the act by scrutinizing the salaries paid to the hospital execs, by far the larges tax money saved is the local real estate taxes.  The rules of the game allow the hospitals to define charity in their own manner.  This could include care for the uninsured, outpatient clinics, or running EDs and community benefits.  The Medicare Advisory Commission states that for profits give about the same 4.6% of costs in uncompensated care as non profits. (See Recent Legislation for California Law)   

Several hospitals have had errors recently.  In North Carolina the Durham Regional Hospital, an affiliate of Duke University, had a patient break a 5th floor window and jumping out and landing on the third floor.  The patient is being treated and so is the hospital.  The hospital has been visited by the state and by CMS and is making changes in its monitoring of patients policy which did allow leaving high risk patients alone briefly until a sitter arrived.  At Brigham and Women's Hospital in Boston a woman came to the hospital stating she was in labor.  She was examined, sent home and delivered soon after.  This hospital will also feel the long arm of the licensing agencies.  

The Naugatuck Valley Surgical Center in Waterbury, Connecticut, has been fined $35,000 and told to train its staff more fully in the use of anesthesia equipment in the death of a three year old who lost oxygen.  The anesthesiologist was fined $5000 and was instructed to get remedial education.  Apparently the ET tube had become dislodged and this was not noticed by the anesthesiologist.  The machine that monitors the oxygen and carbon dioxide may not have been hooked up or working.  

In Tennessee, the Williamson Medical Center has been fighting the building of a specialty hospital.  The Cool Springs Institute was to build a hospital for breast and cosmetic surgery.  The new institution has been denied a CON by the state after the Medical Center fought it.  Now, the Center has invited the physicians involved to quit their project and become part of the staff of the hospital that kept them from their dream.  

In Pennsylvania, a study has shown specialty hospitals are growing over their general hospital counter parts.  The financial wins are mixed.  This growth of the specialty institution is especially prominent in the ambulatory surgery area.  As more procedures are performed on an outpatient basis, the ASCs are becoming more important. About 20% of Pennsylvanians are choosing freestanding outpatient centers to those in hospitals.  This is not surprising since the mindset is different in the two institutions.  

The American Hospital Association has begun its campaign to extend the moratorium against the building of more efficient specialty hospitals.  The American Surgical Hospitals state the lobbying is significantly premature since the information ordered by Congress at the time of the MMA is not yet available and won't be until next spring.  The current legislators that are starting to whip up support for the continuation of the moratorium are those who get a significant amount of money from the American Hospital Association.  The American Surgical Hospitals is putting up $1.5 million to lobby Congress. 

The American College of Pathologists is in about the same position as the JCAHO, hot water.  Maryland is going after them as incompetent surveyors after they screwed up on the Maryland Hospital and now with Reference Pathology Services of Maryland.  The state has shut the later down for the same multiple deficiencies after being approved by the ACAP.      Top

Money Issues and Socialization

The Canadian doctors are running on fumes.  The Canadian Medical Association has asked the Canadian Government for $1 billion to combat shortages in the health care field.  This is a prime reason the waits for procedures are so long.  They want more residency positions, fast tracking of those physician from other countries and a program to retain medical professionals.

The Commonwealth Fund has reported that they believe consumer driven health plans may be bad.  Their rationale is that those with the plans may skip preventative care or treatment for chronic disease.  They also raise the issue, as spurious as it is, of two tier medicine.  They state that only the wealthy and healthy will take this insurance leaving the HMO and PPO with sicker patients. This country has always had two tier medicine and would have it even if there was no consumer driven insurance. 

San Francisco is unable to educate its gay population and so has asked the FDA to make the erectile enhancing drugs into Schedule III.  Where does personal responsibility for your actions come into play?  This is true for the physicians giving out the drug and the people who are taking them.  

Highmark, an insurer in Pennsylvania, has targeted specialized radiology for their crackdown on costs.  They have about 60% of the market in western Pennsylvania.  The insurer will require pre-authorization for all specialized radiographs and these can only be done where there is radiologist on site.  This cuts out the orthopedic offices and will create much longer wait times for the exams.  The other restrictions are that the radiology office must offer exams 40 hours a week and at least one Saturday a month.  Besides having to have a full time radiologist on site they will have to offer at least five different exams such as MRI, CT, PET, mammography or echocardiography.   The insurer believe that the on-site radiologist and the multitude of tests will improve the quality of the exam and the reading.  They don't say where these radiologists will materialize from.   

Humana is putting back its low price low benefit health care plan.  for a low price the consumer gets no choice of physician nor access to many specialists.  The limitations also include hospitals so patients will need to travel to get care. Quality did not enter the equation as to who was put on the plan and who wasn't.  It was all straight money.  

The California Department of Managed Care has begun an investigation into denials of care by an IPA.  Primary Care Associates in San Marco, California, has been accused by El Camino Pediatrics of withholding specialized pediatric care from their patients for cost considerations.  The IPA allows the needed care from their usual adult specialists, which in many cases is not adequate.  El Camino had to hire a full time person just to appeal the care denials by PCA.  They won't need to do this anymore since PCA has dismissed El Camino and will not comment, always a bad sign by an organization. 

In New Jersey, the MIIX Insurance Company which was a major malpractice insurer in the state, is now going under receivership by the state.      Top


Yep, tort reform works.  In Texas Proposition 12 was passed one year ago and those hospitals that self insure have seen a large drop in the premiums or pay outs of about 17%.  The number of cases filed has dropped dramatically.  In those hospitals that don't self insure there has been stability in the premiums.  The same is true with the physicians. 

The FDA is advising women who received mammograms from Ecumed in Hialeah, Florida to get a second opinion on their films or have them repeated.  The ones performed were of poor quality and probably could not be interpreted correctly.  The facility has been shut down by Florida.  

Now that the former Governor has resigned in disgrace, the Connecticut lawmakers are going to again attempt to pass malpractice reform.  The last time they did, the Governor vetoed the legislation. 

The Wall Street Journal, in a front page article, has blown the whistle on HMOs and other employers of physicians who agree to settle as malpractice case providing the individual physician who caused the problem is dropped from the case.  This is a common scenario.  I am not a fan of the National Practitioner Data Bank but if their purpose is to actually report physicians who cause the event, they should be allowed to do so.  I am against putting into the Bank the names of all physicians named in a suit since many are there in the shotgun approach lawyers use in their initial pleadings and then are later dropped.  However, the employers should not be allowed to negotiate out the reporting of the physician in settlements, even if self-insured.       Top

Response to Last Article

My last article was about the Medical Staff Compliance in what they should and should not do.  I have received the following response which I will repeat with permission.

Hello Mr. Tobias,
My name is Linda Walker and I run a community of networking and research for those in the field of medical practice management.
I found your article Titled "Medical Staff Compliance" dated August 1, 2004.
You write:

The consultant wrote that the government is cracking down on corporate compliance and that the hospital would be remiss if that didnít include the medical staff.  That is a leap of faith since there is no such federal compliance standard that implicates the medical staff.  The compliance that the government is after is related to billing.  I agree that the medical staff has a say in this, but not in the same way as was written.  The individual physicians have a duty to code their charts correctly and not allow the hospital coders to put things in that are not true.  If a physician signs his/her name to a chart, they are saying the diagnosis is true.  If they then change to upgrade the case on matters that are questionable, they can be opening themselves up to a Medicare fraud case.  If the medical staff member did undercode and by telling a true diagnosis, the hospital would get paid more, this should be done.  Do Not Lie.    

If you view the laws on fraud and abuse in both the federal register as well as on the Website of CMS at you will see verbiage that states any person who "KNOWINGLY submits. Other such verbiage include "Should have known". I have seen single office managers charged with fraud individually and aside from the physicians practice. Under Medicare's Whistle-Blowers law alone you can report ONE individual. If an office manager, biller or practice manager submits a claim KNOWING it is false, that person IS guilty and CAN be prosecuted under the False Claims Act. The law is setup so that ANYONE who submits claims, is educated and knows the law. The law also requires that if a person has knowledge of any fraud or abuse they report it.

If a physician signs his/her name to a chart, they are saying the diagnosis is true.  If they then change to upgrade the case on matters that are questionable, they can be opening themselves up to a Medicare fraud case.   

 In this situation, if the person billing the charge suspects an error, they are required to further research the error, if they choose to ignore any error, fraud, abuse, and knowingly submit that claim, they are JUST as responsible as the physician who signed off on the charge slip. In your sentence above, it sounds like you believe the physician is the last to see the fee slip or that he even sees a fee slip. While the physician is the one with the final say on diagnostic and procedural coding, it's the office staff's job and responsibility to catch any errors, fraud or abuse and take proper actions.

I hope you don't mind my comments. In my business too many people think we sit and perform data entry all day with no consequences to disregard for the law and regulations in our industry. Anyone submitting medical claims to any Insurer is responsible to abide by the rules as an individual and NOT just as employee.

Linda Walker
Practice Managers Resource & Networking Community
Not only do I not mind, I welcome the comment.


DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.