payers & providers – issue of october 14, 2010

8/8/2019 Payers & Providers Issue of October 14, 2010

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Phony labs and medical practices. Out-of-state physicians whose identities werestolen.

Thats how sweeping indictments and

state corporate records say 10 individuals seven of whom live in the Los Angeles areaand were quickly arrested Wednesday bilked the Medicare program out of at least$17 million last year.

Although the amount this ring isaccused of stealing from Medicare isrelatively modest compared to other cases,officials say their methods represent a starkshift in how such fraud is beingperpetrated.

All of the activity the businesses andthe care rendered is completelyfabricated, said Thom Mrozek, a

spokesman for the U.S Attorneys office inLos Angeles. Mrozek noted that pastMedicare fraud cases typically involvepatients hired to receive unnecessary care,or upcoding of treatments rendered.

Many of the phony patients were eitherdeceased or had their identities stolen,according to Mrozek. An FBI informant andundercover agent were able to crack thering, helping the defendants cash checks in

the names of the physicians or the bogusbusinesses.

At least one of the physicians whoseidentity was stolen suggested that

Medicare could have been more diligentin checking his forged application as aprovider.

As a pediatrician, I have maybe onepatient out of a thousand whos inMedicare. It makes you wonder, saidDavid A. Partrick, M.D., a Coloradopractitioner whose name appears onCalifornia corporate records as chiefexecutive officer for Hwy ClinicalLaboratory Services, a medical group thatclaims an address in Orange but a SanFernando Valley phone number linked toan anonymous voice mail box.

The indictments, unsealedWednesday, come just weeks after U.S.Attorney General Eric Holder declaredLos Angeles a hot spot for Medicarefraud at a special summit (Payers &Providers, Sept. 2). However, officialsnoted that the investigation began at leasttwo years ago and predates a joint

A Sea Change For Medicare FraudNo Care Just Dummy Firms And Hijacked Doctors

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October 18-20

October 19-21

Calendar

14 October 2010

October 25-27

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Payers & Providers Page 2

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In Brief

Clinics Reap $95.1M InFederal Grants

Community clinics aroundCalifornia received a $95.1 million

windfall this week from the U.S.Department of Health and HumanServices, part of an Affordable CareAct initiative intended to bolsterprimary care delivery.

The newly constructed orexpanded community healthcenters will provide care to anadditional 745,000 patients andmuch needed employmentopportunities in both rural andurban underserved communities,said HHS Secretary KathleenSebelius.

Eighteen community clinics inCalifornia received grants rangingfrom $500,000 to $12 million. They

will be used primarily to improveand expand infrastructure,according to Sean South,spokesman for the CaliforniaPrimary Care Association.

It is pretty much what weexpected in terms of awards, Southsaid, but added that the statesstressed clinic infrastructure couldalways use more funding.

The biggest recipient wasFamily Health Centers of SanDiego, which received $12 million.St. Johns Well Child and FamilyCenter in Los Angeles received$9.5 million, while the CommunityHealth Centers of the Central

Coast in Nipomo received $7.5million.

Setbacks Continue ForNew Union

After narrowly losing a battle forhealthcare workers at KaiserPermanente last week, the upstartNational Union of HealthcareWorkers failed to attract members

Continued on Page 3

NEWS

Fraud (Continued from Page One)

initiative between the Justice Departmentand the Department of Health andHuman Services to crack down on

Medicare fraud.The indictment describes a laundrylist of fake or co-opted businessincorporated in Southern California, mostof which trace back to mail box servicesin strip malls. Physicians wereunknowingly listed as the chief executiveofficers of the enterprise, their identitiesused to apply to Medicare as a provider.

Mrozek noted that the defendantswere able to obtain the Social Securitynumbers and birth dates of the physiciansin order to bluff Medicare, but wasunable to say how.

Although the physician victims werenot disclosed in the indictments, Payers &Providers was able to identify not onlyDr. Partrick, but Samir N. Tuma, M.D., aHouston nephrologist who practiced inCalifornia in the 1970s; David W. Bahler,M.D ., an associate professor of pathologyat the University of Utah; and Howard B.Gutstein, a Houston anesthesiologist andassociate professor at the University ofTexas M.D. Anderson Cancer Center.

According to California corporaterecords, Bahler is listed as the chiefexecutive officer ofSonic Labzone, with

corporate offices in Northridge. Theaddress traces back to a post office box ina strip mall. Gutstein is listed as chiefexecutive officer ofStemcyte, Inc. Its alegitimate laboratory in West Covina, butthe mailing address provided traces backto another strip mall post office box inSherman Oaks. Tumas name is connectedto an enterprise called S.N. Tuma, Inc. I ttraces back to the Central CaliforniaBlood Center in Fresno. The corporationslisted president, SaydakhmetovichKarayev, was arrested in Panama City, Fla.last month on a suspected immigration

violation and is being held without bail,according to records from the Bay County

Sheriffs Office. He was not named in theindictment.

Bahler confirmed having been

contacted by the FBI earlier this year, butdeclined further comment. Tuma andGutstein did not respond to a request forcomment.

The person who Mrozek said was thesuspected ringleader of the alleged fraud,37-year-old Pogos Satamyan of Glendale,identified himself in his Linked In profileas chief operating officer ofSeacliffDiagnostics, Inc. of Monterey Park. Thatenterprise was not mentioned in theindictment.

I dont know anything aboutanything, said the unidentified person

who picked up the phone at the numberlisted for Seacliffs corporate headquartersIm the only person here. An 800number provided on Seacliffs websitewent unanswered.

In addition to being named in illegalactivities in Los Angeles, Satamyan wasalso named in an indictment unsealed inNew York Wednesday alleging a $100million Medicare fraud perpetrated in 25states. That indictment alleged thedefendants are members of an Armenianorganized crime ring.

Mrozek said that there was likely

some coordination between the New Yorkand L.A. groups, but that both primarilyacted on their own.

At last months fraud summit, Healthand Human Services Secretary KathleenSebelius said the Centers for Medicareand Medicaid Services was ratcheting upthe application process for would-beproviders, including the use of strongeraddress and identity verification tools.

The changes cant come sooner forPartrick, who sounded about as pleased ashis experience as a young patient comingin for a round of shots.

Its not good, and Im not happyabout it, he said.
http://www.healthwebsummit.com/mu110510.htm


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NEWS

In Brief

at two Northern Californiahospitals and a chain of nursinghomes.

The NUHW withdrew fromunionization votes last week atChinese Hospital in San Franciscoand Enloe Medical Center inChico. Votes the NUHW had

challenged at the PradapPoddatoori nursing home chaintaken earlier this year werecertified in favor of the Oakland-based Service EmployeesInternational UnionUnitedHealthcare Workers West, theNUHWs primary rival.

Last week, the SEIU defeatedNUHW in a ballot among KaiserPermanente healthcare workers.The final count was 18,290 to11,364.

The NUHW was started byformer SEIU-UHW leaders last yearafter a bitter rift. It represents lessthan 6,000 members, compared to

2 million represented by SEIU-UHW.

Kaiser Wins Award ForALL/PHASE Program

Oakland-based Kaiser Permanentewon the Quality Impact Awardfrom the Care Continuum Alliancefor its protocol for reducing heartattacks and strokers.

The award, which recognizesprotocols with great impacts onhealth, lauded Kaisers ALL/PHASEprotocol. It uses low-cost generic

medications such as aspirins,statins and beta blockers onenrollees who are over the age of55 with heart disease or diabetes,and also encourages healthierlifestyles.

We recognize that preventiveand community health is critical toindividual health and wellness,said Winston Wong, M.D., a Kaisermedical director.

The award was presented atthe Forum 10 Conference earlierthis week in Washington.

The U.S. Department of Justice and U.S.Department of Health and Human Servicesare both investigating Victorville-based PrimeHealthcare Services for possibly overbilling

the Medicare program $18 million forsepticemia claims in 2008, according to theLos Angeles Times and the investigativewebsite California Watch.

However, both Prime and a union thatrepresent some of its workers traded ercebarbs revolving around the allegations earlierthis week.

The Service Employees InternationalUnion-United Healthcare Workers West,which commissioned a study of septicemia,or sepsis, rates at Primes 13 hospitals, called

on state ofcials to halt the issuance of anynew hospital licenses to Prime.

"It would be unconscionable to put morepatients at risk, said SEIU-UHW trustee Dave

Regan.Prime meanwhile, issued a statementaccusing the union of engaging in a smearcampaign and used the septicemia survey asa way to extort concessions from thehospital operator. It also claimed that its ER-based admission model means it treats muchsicker patients who are more likely to contracsepticemia, and that Medicare guidelinesrequire it code sepsis as a primary diagnosiseven if there are other conditions, whichreduces its reimbursement.

Ofcials with the Los Angeles CountyDepartment of Health Services questioned

data released last week by the CaliforniaDepartment of Public Health claiming lower-than-average rates of inuenza immunizationamong its hospital workers.

The CDPH report said that Los AngelesCounty-USC Medical Center had animmunization rate below 20% for its workersduring the 2008-2009 u season. The actualrate of compliance was 46%, according toCatherine OBrien, the DHSs assistanthuman resources administrator.

OBrien blamed the discrepancy on the

use of various forms for reporting and handtallies of data. She and other DHS ofcials

noted that the CDPH ignored an advisorycommittee recommendation that the agencyonly report aggregated data.

The executive summary for the reportacknowledged that multiple versions of thedata collection form were created andsubmitted, and there were signicantmisinterpretations of the denitions on thedata collection forms, particularly foremployees, non-employee healthcarepersonnel, and declinations.

CDPH spokesman Michael Siciliaconrmed that the study had quality issues,but said many would be resolved by the time

the report for the 2009-2010 u season isreleased before the end of this year.

Prime, Union In Bitter Fight Over DataSepsis Numbers: Upcoding Fraud or Brinksmanship?

LAC DHS Pushes Back On Flu DataCDPH Conceded First-Time Reporting Was Flawed

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Payers & Providers Page

The New York Times recently publi shed afront-page investigation into the tragedy ofincorrectly placed patient tubes, and thetruculence of medical device manufacturersto make an easier-to-use product.

The potential for incorrectly placing atube is high: according to a study publishedin the Joint Commission Journal on Qualityand Patient Safetyin 2006, more than 15%of clinicians surveyed admitted to havingsuch an error occur in their hospital.

Tube mix-ups are a grave error, leadingto a sentinel event 33% of the time. In the

case of accidentally placing feeding tubesinto the bloodstream, it leadsto a sentinel event 66% ofthe time (more than two-thirds of sentinel events arefatal).

According to the JointCommission, non-sentinelerrors cost hospitals anaverage of $4,700 apiece.One can only imagine whata sentinel event costs ahospital given the patientresuscitation, intensive care and

corrective procedures that mustbe provided.The Times article initially focused on

such errors, but then portrayed the Foodand Drug Administrations reluctance tomake needed regulatory changes in itsproduct approval process, primarily due topressure from manufacturers.

F.D.A. could fix this tubing problemtomorrow, but because the agency is soworried about making industry happy,people continue to die, Robert Smith, aphysician and former FDA reviewer, toldthe Times.

In actuality, hospitals have just as muchputative power as the FDA to change thetube and tube connector manufacturingprocess.

That power lies within VHA andPremier, the two giant healthcarepurchasing alliances. Combined, they serve3,800 hospitals throughout the U.S.

VHA and Premier work on a simpleprinciple: the more hospitals theyrepresent, the larger the economies of scalethey possess to wangle discounts frommanufacturers.

So, were VHA and Premier to requesttube and tube connection manufacturersmake their products less confusing to use face elimination from their offerings list they would have little alternative but tocomply. It would be a tough road to try ansell directly to hospitals when they refusefollow a directive from the cooperatives,particularly given VHA and Premier havebeen engaged in many initiatives to improthe quality of healthcare delivery.

Of course, this would likely lead toshrieks of anti-competitive practices from

manufacturers, even as they have leveragethe sour mood against the federalgovernment to gull the FDA intotreating their products with kidgloves. No doubt lawsuits wouldfollow.However, both cooperatives havetaken substantial pains to betransparent in their governance. Mof their owners the hospitals aalso non-profit organizations.Moreover, the recent appointmen

former Institute for HealthcareImprovement CEO Donald Berwick to

head the Centers for Medicare andMedicaid Services suggests the anti-government mood in the country is beingmatched by an equal passion for cost-consciousness and value in our healthcaredelivery, particularly given everyone will be mandated to purchase coverage.

If such a sentiment isnt shared by ounations courts, perhaps the manufacturerscan be reminded of the consequences of tinactions by the families of Jasmine Gant Robin Rodgers, among those who have lostheir lives due to tube mix-ups. Gant was Rodgers, 24.

Within such a context, the manufactugrumblings that the FDA is an intrusivegovernment body will likely receive assympathetic an audience as such an argumdeserves.

OPINION

Cutting Off Healthcares Tube IssuesCooperatives Could Use Clout to Address Problem

By Ron

Shinkman

Ron Shinkman is the publisher of Payers &

Providers.

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Op-ed submissions of up to 600 words are

welcomed. Please e-mail proposals to

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MARKETPLACE/EMPLOYMENTPayers & Providers Page 5

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