Prime Healthcare Responds to California Watch Legal Comparison

ONTARIO, Calif., Oct. 24, 2011 /PRNewswire/ -- California Watch has once again relied on faulty data, illogical comparisons, and baseless conclusions in its attempt to smear Prime Healthcare by comparing certain billing practices at Kernan Hospital, alleged (but not proven) in United States v. Kernan Hospital, to the billing practices of Prime Healthcare's hospitals.

There is no logical basis for any claim that the billing practices of Kernan Hospital parallel Prime Healthcare's billing practices. For example, the lawsuit alleges that Kernan put in place its own computer system. Prime Healthcare's hospitals utilize coding software developed by 3M, which is widely used across the United States and accepted by Medicare, and have not modified this software in any way. Likewise, Prime Healthcare's hospitals utilize practices that are consistent with the principles adopted by AHIMA including those related to physician queries.

Comparing billing practices of Maryland hospitals and California hospitals compares apples to oranges because Maryland relies on a different reimbursement methodology system than utilized in California (i.e., APR-DRG versus MS-DRG). Also, Maryland's APR-DRG methodology applies to both Medicare and Medicaid reimbursement in Maryland. Medi-Cal (California's Medicaid program) does not utilize a DRG reimbursement methodology.  

In United States v. Kernan Hospital, it is stated that the Maryland Health Services Cost Review Commission reviewed Kernan Hospital's coding and determined that the hospital had been inappropriately paid. In contrast, two national Medicare accreditation agencies, the Joint Commission and Healthcare Facilities Accreditation Program, after a thorough review of Prime Healthcare hospitals, found no deficiencies as to coding or diagnosis of septicemia or malnutrition. In addition, Prime Healthcare is unaware of any federal investigation into this or any other matter.

Similarly, as California Watch is well aware, the California Department of Public Health found no deficiencies as to coding or diagnosis of septicemia or malnutrition. Also, Health Services Advisory Group (HSAG), a Medicare contracted agency that reviews DRG coding, has reviewed the medical records at Shasta Regional Medical Center and agreed with the appropriateness of the diagnosis of Kwashiorkor. Another Medicare contracted review agency, Health Data Insights (RAC), which is entrusted with the responsibility of reviewing Medicare DRG coding for all hospitals, found no deficiencies concerning Kwashiorkor at Prime Healthcare hospitals.  

The complaint in United States v. Kernan Hospital continues the fallacy perpetuated by California Watch, SEIU, and others that Kwashiorkor is not present in the United States and/or in seniors. This is contrary to published studies that indicate that Kwashiorkor occurs among the elderly in the United States (See Duffy, J.F., Kwashiorkor and Serious Protein Deficiency, American Chronicle, April 15, 2010, a copy of which has been previously provided to California Watch). A review of national data of 2009 (MEDPAR) indicates that 48,258 cases of Kwashiorkor were reported, of which 91% were adults. This data includes major medical centers across the country. There were 3,905 Kwashiorkor cases reported in California for the year 2009, of which 2,703 were Medicare beneficiaries (69%).

In addition, as Prime Healthcare advised California Watch on March 3, 2011, the publicly available data for California tells a much different story:

• According to the 2009 OSHPD Data, Eisenhower Medical Center in Rancho Mirage, California (an area with an average age of 56) reported 240 cases of Kwashiorkor in 2009 with 89.58% of the cases occurring in patients 35 years old or older and 62.1% (or 149 out of 240) of the cases occurring in patients 65 years old or older.
• According to the 2009 OSHPD Data, Kaiser Foundation Hospital – Anaheim reported 146 cases of Kwashiorkor with 96.58% of the cases occurring in patients 35 years old or older and 58.2% (or 85 out of 146) of the cases occurring in patients 65 years old or older.
• According to the 2009 OSHPD Data, St. Joseph's Hospital – Orange reported 138 cases of Kwashiorkor with 89.86% of the cases occurring in patients 35 years old or older and 61.6% (or 85 out of 138) of the cases occurring in patients 65 years old or older.
• According to the 2009 OSHPD Data, Stanford University Hospital reported 70 cases of Kwashiorkor with no less than 87.14% (61 out of 70) of the cases occurring in patients 35 years old or older and 34.3% of the cases occurring in patients 65 years old or older.

The currently available medical literature and the publicly available statistical data clearly refute the myth that Kwashiorkor is simply a disease of children in the third world. This serious form of protein deficiency malnutrition is becoming increasingly prevalent in the elderly population in our country, especially in nursing home and hospitalized patients. The malnutrition is an important parameter in assessing the morbidity (complications and recovery) and mortality (death rate) in these fragile and high-risk elderly patient populations.

Prime Healthcare Services

Ontario, CA-based Prime Healthcare Services, recognized as one of the top 10 health systems in the country, is a progressive, innovative and rapidly expanding hospital management company with a mission to provide comprehensive quality healthcare in a compassionate, convenient and cost-effective manner.

With over 10,000 employees, Prime Healthcare Services currently owns and/or operates 12 acute care facilities: Alvarado Hospital Medical Center, Centinela Hospital Medical Center, Chino Valley Medical Center, Desert Valley Hospital, Garden Grove Hospital Medical Center, Huntington Beach Hospital, La Palma Intercommunity Hospital, Paradise Valley Hospital, San Dimas Community Hospital, Shasta Regional Medical Center, Sherman Oaks Hospital, and West Anaheim Medical Center.  

Nine of these hospitals are accredited by Joint Commission and seven of the nine hospitals were recently recognized as Top Performers in the Nation (Top 14%) on Key Quality Measures by Joint Commission, a Medicare accreditation agency.

Prime Healthcare Services Foundation

The Foundation is a nonprofit public charity that was founded by Dr. Prem Reddy and his family reflecting their commitment to give back to the communities that they serve.

The Foundation owns and operates two nonprofit hospitals, Encino Hospital Medical Center and Montclair Hospital Medical Center (a Top 100 Hospital in the Nation in 2009), and is governed by an independent Board of Directors.  Both hospitals were recently recognized as Top Performers in the Nation (Top 14%) on Key Quality Measures by Joint Commission, a Medicare accreditation agency.

SOURCE Prime Healthcare Services