Exposing the exploitation of Medicare

Bad Medicine

Tapping into Medicare’s gold mine?

By Lance Williams, Monica Lam and Christina Jewett California Watch


America spends over $500 billion every year so that elderly Medicare patients can get the care they need. But as health care costs rise, many are taking a closer look at what exactly we�re paying for. Our media partners at the Center for Investigative Reporting have been conducting a yearlong California Watch investigation into a prominent hospital chain that is reporting unusually high rates of serious diseases. Does the chain attract the toughest cases, or are the hospitals exaggerating conditions to pump up revenues from taxpayers? Reporter Lance Williams has the story.

Reporter Lance Williams: California-based Prime Healthcare Services buys financially troubled hospitals and turns them around. So when Prime purchased Alvarado Hospital in San Diego last year, Anneke Doty knew there�d be changes �� especially after a meeting with the new owner, Dr. Prem Reddy.

Anneke Doty: It was very much �there�s a new sheriff in town.�

Reporter: Doty�s job as a medical coder was to prepare summaries of patient illnesses for Medicare reimbursement. She says Reddy told doctors how to diagnose patients he had never seen.

Doty: There was several diagnoses that he was suggesting � highly recommending. They were told that they should look for those opportunities whenever possible.

Reporter: It turns out many diseases share similar symptoms. But more severe diseases are reimbursed by Medicare at higher rates.

Doty: He encouraged the physicians to stop documenting syncope, which is fainting or a dizzy spell, and instead use the term �autonomic nerve dysfunction,� which reimburses at a higher rate.

Reporter: Medicare pays about $7,000 to treat a patient who has fainted, even if there are other medical complications. But a patient with a nerve disorder and a major complication can net the hospital $12,500.

Doty: He made the comment that autonomic nerve dysfunction is such a vague description that no one could ever question the use of that code in the medical record.

Reporter: Doty says what ran through her mind was:

Doty: This is crazy, how can I get out of here?

Find the entire transcript here

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