Medicaide fraud - who loses?

  1. SIUH told to shut almost all its clinics
    after the institution settled the largest Medicaid fraud case in NY state history

    Tuesday, April 01, 2003


    Staten Island, New York City - The state is requiring Staten Island University Hospital (SIUH) to close almost all of its remaining part-time clinics, a major source of revenue that came under review after the institution settled the largest Medicaid fraud case in state history four years ago.

    The hospital, which at one time operated 648 clinics around the city and state offering services for speech, hearing and other needshas been closing them over the past three years. Currently, 131 clinics remain open, and the Department of Health will send letters to more than 100 within the next few weeks officially notifying them of their closings, said Rob Kenny, a spokesman for the agency.

    The closures are part of a state-wide initiative to phase out these types of clinics.

    "Our goal is to have no more than 20 of them remaining by the end of 2003," said Kenny. "We are near completion of this process."

    The final clinic closures are part of a state initiative to stop the over-saturation of Article 28 facilities -- residential health care sites managed by the Department of Health, according to Kenny.

    The clinics have been under review since 2000, when University Hospital was operating 648 -- more than any other hospital in the state. The hospital has closed 450 clinics and is in the process of closing another 67.

    The final 131 clinics were the last batch under review and were an asset some say the hospital was banking on for future revenue.

    But University Hospital administrators say that, like other hospitals, they have been preparing for the shutdowns and are cooperating with the Department of Health.

    "We are closing the clinics because the state is phasing them out," said Dr. John D'Anna, vice president for strategic services at University Hospital. "We have been planning for it financially for the last three years. We are complying with the Department of Health."

    The hospital has closed the speech and hearing clinics it operated through the state -- which were the source of an investigation by the office of state Attorney General Eliot Spitzer.

    University Hospital did not admit any wrongdoing in its Medicaid settlement with Spitzer's office and simply said it thought they were appropriately billing the state.

    However, it agreed to reimburse the state Medicaid program $45 million for improper bills submitted from 1994 to 1998. It also agreed to provide $39 million in free care to impoverished patients for 20 years.

    Jill Gardiner covers health issues for the Staten Island Advance. She may be reached at

    The hospital doesnt admit that they committed any wrong-doing in billing the state, but they admit that their clinics were "a major source of revenue". Of course they were. Cause what they dont come right out & actually say is that the state is closing down these clinics & others like them because the people who run them have been bilking medicaid royally through them. Thats why they are such a major source of revenue for the hospital. So NY is putting the whole category practically out of business state-wide to cut down on the fraud. But what happens to all the people who were served by these kinds of clinics? Once again, the community suffers for the greed of administrations.

    And with that $45 million SIUH now has to pay back to the state, plus the $39 million in free healthcare it has to owe the community, I can already hear the next round of negotiations -"we cant hire more nurses and must have contract givebacks, cuts, & downsizing, cause we have no money".
    Last edit by -jt on Apr 6, '03
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  3. by   fergus51
    I find this disgusting. Sounds similar to another system in California.
  4. by   pickledpepperRN
    Originally posted by fergus51
    I find this disgusting. Sounds similar to another system in California.
    Hospital drops heart surgeries
    FBI investigating Redding doctors
    Suzanne Herel, Chronicle Staff Writer
    Friday, April 11, 2003
    2003 San Francisco Chronicle | Feedback
    A Redding hospital where two top doctors have been accused of performing scores of unnecessary operations has suspended all cardiovascular surgery and invasive cardiology procedures while it revamps its cardiac services program.
    News last November that the FBI was investigating doctors Chae Hyun Moon and Fidel Realyvasquez led to a precipitous drop in patient visits at Redding Medical Center, spokesman Brandon Edwards said.
    On Thursday, hospital chief executive officer Hal Chilton announced the cardiac program's hiatus.
    "This is an opportunity for us to rebuild community trust in Redding Medical Center's cardiac services," Chilton said. "It's an important step in the healing process, and now is the right time to do it."
    Edwards said it was impossible to know just how much money the investigation had cost the hospital, operated by Tenet Healthcare Corp.
    But, he said, "The impact . . . has been significant. That's really the essence behind relaunching the program."
    The decision will not result in staff layoffs, Chilton said. However, the hospital last month separately announced that it would be cutting 150 positions, also related to the drop in patients.
    The physicians are the targets of an FBI investigation that alleges the pair performed numerous unnecessary procedures that may have cost patients their lives, apparently to increase earnings.
    Neither has been charged with a crime, but both are defendants in numerous patient lawsuits alleging negligence and fraud.
    Realyvasquez took a three-month leave of absence in February, Edwards said. Although he has hospital privileges, he has not used them since then.
    Moon, who headed the cardiology program, is no longer associated with the hospital because he lost his medical malpractice insurance, Edwards said.
    E-mail Suzanne Herel at
    NY Times
    Tenet Reports a $55 Million Loss
    OS ANGELES, April 10-The Tenet Healthcare Corporation said today that it lost $55 million in its third quarter as payments from Medicare dropped sharply and it wrote down the value of certain hospitals. Executives warned that earnings for the rest of the year would be lower than previously expected.
    The quarter, ended Feb. 28, was the first in which Tenet, the nation's second-largest hospital operator, behind HCA, lost much of the revenue it had been receiving from Medicare for certain high-cost patients, known as outliers. The company has acknowledged that much of its earnings growth over the last several years stemmed from its aggressive increases in list prices, which led to unusually high outlier payments under the complicated Medicare formulas.
    In the latest quarter, the outlier payments from Medicare dropped to $40 million from $191 million in the period a year earlier. Tenet, which is based in Santa Barbara, Calif., also took a charge of $383 million to write down the value of 10 hospitals and four other properties, in part because the reduction in Medicare payments worsened the business prospects.
    The net loss in the quarter, the first in almost four years, translated to 12 cents a share. In the year-earlier period, Tenet had a net profit of $280 million, or 56 cents a share.
    Despite the loss, the company said that its business remained fairly strong over all. Revenue rose 5.8 percent, to $3.69 billion, and admissions to its hospitals were up. Excluding charges, the company earned a profit of 40 cents a share.
    "We are managing to keep the core business on track," Jeffrey C. Barbakow, the chairman and chief executive, said in a conference call with investors and analysts. Mr. Barbakow said Tuesday that he would step down as chairman and director, but remain chief executive, to satisfy shareholder demand for a stronger board.
    Still, the company faces challenges, including two federal investigations, one into its pricing practices related to the outlier payments and one into whether two doctors at its hospital in Redding, Calif., performed unnecessary heart procedures. The doctors have stopped practicing and the hospital has suspended its cardiac services until new doctors can be recruited, Tenet executives said today. Nine lawsuits have been filed against the hospital so far and others are expected, they said.
    Tenet executives said the company was in a "transitional period" that will last through the end of the year, as many changes are made and more charges against earnings are taken. Tenet recently announced it would close or sell 14 of its 114 hospitals, cut jobs and sell corporate jets to lower costs. But executives said further cost cuts were needed.
    "Those outlier payments had enabled them to let some costs get out of line, so to say," said Clifford A. Hewitt, an analyst with Legg Mason Wood Walker. "When you take away the benefit of aggressive pricing, you have a company that is not generating the kind of margins its peer group is, and they have to re-examine a lot of their operations to get them in line."
    One thing that seemed to surprise analysts in today's report was that Tenet increased the amount it sets aside to pay malpractice verdicts. The company said this reflected a general rise in awards by juries, not any anticipated verdicts related to its Redding hospital.
    Tenet, which is now shifting to a calendar year for financial reporting, said its preliminary estimate for earnings in 2003 was $1.34 to $1.65 a share. That is down from the $1.80 to $2.20 a share it had estimated in December for the fiscal year ending May 2004. Under new Medicare rules, outlier payments will be even lower than it projected in December, the company said.