National Medicare issue hits home

CoxHealth is under federal scrutiny for alleged improprieties regarding Medicare payments for kidney dialysis services, and a civil suit filed by two former employees who claim they were fired for blowing the whistle on CoxHealth may be put on hold indefinitely.

The two plaintiffs, Roger Cochran and Dennis Morris, have opposed a government motion to intervene in their case with an indefinite stay on the discovery phase, saying it will damage their chances of success. The government, in its response, has found that the plantiffs do not qualify as whistleblowers under legal definition as they were not the original sources of information provided to the government regarding the alleged fraud.

CoxHealth Sept. 8 filed a notice of intent to support the government’s request for stay.

But the investigators are not happy with CoxHealth either, as was made apparent in the latest case filing. That document says that CoxHealth was not totally truthful in public statements that it had voluntarily handed over documents related to the case.

According to the filing, “voluntary self-disclosure” means the party in question must not be under any pending investigation.

“Under these well-known and long-established standards ... CoxHealth’s disclosures do not qualify as ‘voluntary’ because they were made only after CoxHealth learned that a government investigation of CoxHealth was under way,” the filing said.

The document goes on to say that assurances that CoxHealth would not be charged criminally are contingent on full disclosure of documents from the hospital’s internal investigations, and that disclosure has not yet happened.

Those documents were presented Sept. 13.

CoxHealth CEO Robert Bezanson issued a memo to employees Sept. 15, saying the government’s portrayal of the hospital was “disappointing.” He pointed out that the hospital and investigators had mutually set a Sept. 16 deadline to provide documents related to the hospital’s internal investigation. Bezanson added that the hospital had been told when it presented initial findings of the internal investigation in January that it would “receive credit for the disclosure.”

Former CEO Larry Wallis and former Chief Financial Officer Larry Pennel are named as targets of the federal investigation, while Bezanson, Corporate Compliance Officer Betty Breshears and former employee David Tapp are subjects, meaning they may have information important to the case.

Several members of the CoxHealth Board of Directors declined to comment on the investigations, and others referred questions to CoxHealth spokeswoman Laurie Cunningham.

Board member Sam Hamra declined comment, saying the board “speaks as one voice” on the issue.

At the heart of the investigation are allegations that the Medicare system was used to provide improper payments to doctors with Ozarks Dialysis Services for care that was never provided.

Health care fraud is widespread; the U.S. General Accounting Office reported recovering $1.2 billion related to civil health care fraud in fiscal year 2001. The office also estimates that $1 out of every $7 spent annually on Medicare is lost to fraud.

Phil Chiarelli, associate regional administrator for Medicare financial management in Kansas City, said that the Medicare system can be defrauded in a number of ways, ranging from billing for services not rendered to allocating costs that are unrelated to Medicare.

He points out, however, that there is an important distinction to be made.

“There is a difference between a provider who has made an honest mistake in billing and those providers who, as defined by law, knowingly and willingly attempt to defraud the program,” he said. “In the second group, which is a small minority, those that knowingly try to steal money from the program, we have zero tolerance for that.”

Chiarelli, who works out of the Kansas City office of the Centers for Medicare and Medicaid Services, said an investigation does not automatically mean that there has been criminal wrongdoing.

“I don’t know the specifics of the case down there, but I do know this: In every case, people are innocent until proven guilty,” he said.

“We investigate to let our beneficiaries know that, yes, we will pursue (suspicions),” Chiarelli said.

“But we are also going to take our time and make sure that everything is thoroughly looked at before any decision is made as to whether somebody should be prosecuted or not.”