HCA uncovered evidence that some cardiologists at several of its Florida hospitals were unable to justify many procedures they performed.
In summer 2010, a troubling letter reached the chief ethics officer of the hospital giant HCA, written by a former nurse at one of the company's hospitals in Florida.
In a follow-up interview, the nurse said a doctor at the Lawnwood Regional Medical Center, in the small coastal city of Fort Pierce, had been performing heart procedures on patients who did not need them, putting their lives at risk.
“It bothered me,” the nurse, C.T. Tomlinson, said in a telephone interview. “I'm a registered nurse. I care about my patients.”
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In less than two months, an internal investigation by HCA concluded the nurse was right.
“The allegations related to unnecessary procedures being performed in the cath lab are substantiated,” according to a confidential memo written by a company ethics officer, Stephen Johnson, and reviewed by The New York Times.
Tomlinson's contract was not renewed, a move that Johnson said in the memo was in retaliation for his complaints.
But the nurse's complaint was far from the only evidence that unnecessary — even dangerous — procedures were taking place at some HCA hospitals, driving up costs and increasing profits.
HCA, the largest for-profit hospital chain in the United States with 163 facilities, had uncovered evidence as far back as 2002 and as recently as late 2010 showing that some cardiologists at several of its hospitals in Florida were unable to justify many of the procedures they were performing. Those hospitals included the Cedars Medical Center in Miami, which the University of Miami now owns, and the Regional Medical Center Bayonet Point in Hudson, near Tampa. In some cases, the doctors made misleading statements in medical records that made it appear the procedures were necessary, according to internal reports.
Questions about the necessity of medical procedures — especially in the realm of cardiology — are not uncommon. None of the internal documents reviewed calculate just how many such procedures there were or how many patients might have died or been injured as a result. But the documents suggest that the problems at HCA went beyond a rogue doctor or two.
At Lawnwood, where an invasive diagnostic test known as a cardiac catheterization is performed, about half the procedures, or 1,200, were determined to have been done on patients without significant heart disease, according to a confidential 2010 review. HCA countered recently with a different analysis, saying the percentage of patients without disease is much lower and in keeping with national averages. At Bayonet Point, a 44-year-old man who arrived at the emergency room complaining of chest pain suffered a punctured blood vessel and a near-fatal irregular heartbeat after a doctor performed a procedure that an outside expert later suggested might have been unnecessary, documents show. The man had to be revived. “They shocked him twice and got him back,” according to the testimony of Dr. Aaron Kugelmass in a medical hearing on the case.
On Monday morning, in a conference call with investors, company executives disclosed that in July the civil division of the U.S. attorney's office in Miami requested information on reviews assessing the medical necessity of interventional cardiology services provided at 10 of its hospitals, located largely in Florida, but also two or three hospitals in other states. The company also referred to inquiries by The Times. HCA's stock ended nearly 4 percent lower Monday, at $25.55.
In a recent statement, HCA declined to provide evidence that it had alerted Medicare, or state Medicaid, or private insurers of its findings or reimbursed them for any of the procedures the company later deemed unnecessary, as required by law.
HCA said in a statement: “When the company becomes aware of a situation in which we might have a reimbursement obligation, we assess, with outside resources, what our reimbursement obligations might be.”
HCA also declined to show that it had ever notified patients, who might have been entitled to compensation from the hospital for any harm.
Some doctors accused in the reviews of performing unnecessary procedures are still practicing at HCA hospitals.
The cardiologists say the reviews of their work did not accurately reflect the care they provided, and HCA says the reviews “are not, by any means, definitive,” according to an emailed response by the company. HCA says it took whatever steps were necessary to improve patient care. It also said “significant actions were taken to investigate areas of concern, to bring in independent reviewers, and to take action where necessary.”
Details about the procedures and the company's knowledge of them are contained in thousands of pages of confidential memos, email correspondence among executives, transcripts from hearings and reports from outside consultants examined by The Times, as well as interviews with doctors and others. A review of those communications reveals that rather than asking whether patients had been harmed or whether regulators needed to be contacted, hospital officials asked for information on how the physicians' activities affected the hospitals' bottom line.
HCA denies its decisions at these hospitals were motivated by financial considerations, but rather “demonstrate the strong focus we have on quality patient care.” The company also says that more than 80 percent of its hospitals are in the top 10 percent of government rankings for quality.
Although HCA has hospitals in about 20 states from California to Virginia and Alaska to Texas, Florida, with its large older population, is a critical and growing market for hospital chains and especially for HCA. HCA's Florida hospitals provide about 20 percent of the company's revenue.
The need to root out Medicare fraud — billing for unnecessary procedures, for example — is high for all hospitals. In 2003, Tenet Healthcare agreed to pay $54 million to settle allegations that unnecessary cardiac procedures were being performed over six years and billed to Medicare and Medicaid at one of its hospitals in California, Redding Medical Center.
But the pressure is even greater for HCA. In 2000, the company reached one of a series of settlements involving a huge Medicare fraud case with the Justice Department that would eventually come to $1.7 billion in fines and repayments. The accusations, which primarily involved overbilling, occurred when Rick Scott, now the governor of Florida, was the company's chief executive. He was removed from the post by the board and was never personally accused of wrongdoing.
As part of the settlement with the federal regulators, HCA signed a 97-page Corporate Integrity Agreement that extended through late 2008. It detailed what had to be reported to authorities and provided for stiffer penalties if HCA failed to do so.
If there were intentional violations of such an agreement, it would mean “that a defendant, already caught once defrauding the government, has apparently not changed its corporate culture,” said Michael Hirst, a former assistant U.S. attorney in California who oversaw the case against Tenet. Hirst now represents whistle-blowers.
In its statement, HCA said it fulfilled any obligation it had under the agreement to report “substantial overpayment.”
The revelations in the documents come at a significant time in the evolution of medical treatment in the United States — from independently owned hospitals to large, corporate chains.
HCA exemplifies the trend. In 2006, HCA was taken private by a group of private equity firms, including Bain Capital, the firm co-founded by Mitt Romney, the presumptive Republican presidential nominee. (By that time, Romney was no longer a partner in Bain.) By mid-2010, the private equity owners were eager to start cashing out of their investment. While HCA prepared for an initial public offering of its stock that took place in 2011, it borrowed to pay the private equity firms $4.3 billion in dividends.
The ability to take these financial steps hinged on HCA showing continued robust profit growth at its hospitals.
And for that the company turned, in part, to cardiac care.
Cardiology is a lucrative business for HCA, and the profits from testing and performing heart surgeries played a critical role in the company's bottom line in recent years.
Some of HCA's busiest Florida hospitals perform thousands of stent procedures each year. Medicare reimburses hospitals about $10,000 for a cardiac stent and about $3,000 for a diagnostic catheterization.
But in recent years, doctors across the country have been less quick to implant stents, instead relying on drugs to treat blockages. Medicare has also questioned the need for patients who receive cardiac stents to stay overnight at the hospital, cutting into the profitability of the procedures at many hospitals.