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Lance Williams and Christina Jewett, California Watch: Maryland hospital, like California chain, claims ‘kwashiorkor’ outbreak

Maryland hospital, like California chain, claims ‘kwashiorkor’ outbreak
by Lance Williams and Christina Jewett, October 23, 2011

Federal prosecutors in Maryland have filed a false claims lawsuit against a hospital that reported an outbreak of a rare Third World nutritional disorder among its Medicare patients.

In the complaint, the government said Kernan Hospital in Baltimore fraudulently billed Medicare about $1.6 million for treating elderly patients for kwashiorkor, a nutritional malady that, according to experts, is widely associated with impoverished children in the Third World.

The Maryland lawsuit, filed last week, describes alleged billing practices similar to ones that authorities have investigated at the Prime Healthcare Services hospital chain in California.

As California Watch reported earlier this year, two Prime hospitals, Shasta Regional Medical Center in Redding and Desert Valley Hospital in Victorville, have logged extremely high rates of kwashiorkor among Medicare patients age 65 and older.

In a statement relayed by lawyer Rebecca Kaufman, the company said there were significant differences between the billing practices at Prime and the Baltimore hospital, and there is “no logical basis” to suggest otherwise. Among the differences: Prime uses industry-standard software to code cases. Chain officials say the Baltimore hospital created its own coding system.

The company said the government’s lawsuit in Maryland “continues the fallacy” that kwashiorkor “is simply a disease of children in the Third World.” Actually, it is “increasingly prevalent” among elderly Americans, Prime said.

In previous statements, Prime denied incorrect billings, saying that the kwashiorkor reports at the two hospitals were accurate and were a reflection of how seriously Prime takes the problem of malnutrition among the elderly.

At Shasta, 16.1 percent of Medicare patients in 2009 were diagnosed with kwashiorkor, about 70 times the state average, according to state health data. At Desert Valley, 9.1 percent were diagnosed with the ailment, about 39 times the state average.

Medicare pays a treatment bonus of about $2,700 per case when a patient with another primary diagnosis is also diagnosed with kwashiorkor, federal records indicate.

In the Baltimore lawsuit, the government claims the hospital pressured doctors to use the phrase “protein malnutrition” on medical charts when reviewing the conditions of Medicare patients.

The hospital’s computer system recognized the phrase “protein malnutrition” as meaning kwashiorkor, according to the lawsuit.

Medical coders, who translate medical records into computerized billings for Medicare, were told to use the computer-generated code for kwashiorkor when protein malnutrition appeared in a chart, the suit said.

“This system violated industry norms,” the government said in the lawsuit. “It is inappropriate, false and fraudulent for a hospital to instruct coders to suspend that independent judgment and code the most severe form of malnutrition as a default.”

Kwashiorkor cases at the hospital rose from none in 2004 to 287 in 2007. The hospital reaped $1.6 million in unjustified payments, the lawsuit contends.

A spokeswoman for the U.S. attorney’s office in Maryland declined to comment on what caused prosecutors to target the Baltimore hospital.

Hospital spokeswoman Mary Lynn Carver said in an e-mail that the hospital had conducted its own review of its malnutrition cases and reached “a substantially different conclusion” than the prosecutors. The hospital hopes to work with prosecutors to resolve the case, she wrote.

Carver noted that Kernan Hospital is known for rehabilitating patients with traumatic brain injury.

“Many of the patients come to Kernan after prolonged hospitalizations, and 20 percent to 30 percent of our patients come to us on feeding tubes which can be a recommended treatment to combat protein malnutrition,” she wrote.

In California, Prime has faced investigations regarding its Medicare billings. Federal records show that the U.S. Department of Health and Human Services is investigating suspected Medicare fraud at Prime in connection with the chain’s high reported rate of blood infections known as septicemia. The company has denied wrongdoing.

The state Department of Public Health cited Prime for its septicemia billings but recently reversed itself and dropped the matter, saying the department lacked evidence to cite the hospitals for incomplete record-keeping. The department said it would forward results of its probe to state Medi-Cal auditors and the federal Health and Human Services Department’s Office of Inspector General, which have jurisdiction over billing issues.

In response to California Watch’s report about kwashiorkor at Prime hospitals, the health department also investigated that issue and cited three hospitals for failing to assess or treat some patients diagnosed with severe malnutrition.

As in Maryland, the issue of the phrase “protein malnutrition” arose in the California investigation.

In a May 2011 letter to state regulators, Prime Vice President and General Counsel Michael Sarrao sought to explain the company’s coding practices.

He wrote that “physicians likely did not write kwashiorkor … but instead documented the patient’s medical condition as … ‘protein malnutrition.’ ”

He said “nationally recognized coding guidelines and 3M software” generated the code for kwashiorkor.

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