Healthcare Business News

Late News: Pre-emptive strike

HMA denies reports of excess ER admissions

By Melanie Evans and Joe Carlson
Posted: December 1, 2012 - 12:01 am ET

Anticipating a critical national TV news report, Health Management Associates rejected allegations that the hospital chain improperly admitted patients from its emergency rooms.

“We have seen no evidence of upward trends, spikes or jumps that could be attributed to anything going on in the emergency department,” Alan Levine, HMA's senior vice president and president of the company's Florida group said in a conference call. Executives said the call was to address a “60 Minutes” segment scheduled for Dec. 2.

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The hospital chain's pre-emptive response to the news report, which included notifying acting CMS Administrator Marilyn Tavenner, underscored a growing industrywide dispute over scrutiny hospitals face from federal auditors of doctors' decisions whether or not to admit patients. “I did my best to educate '60 Minutes,' ” said Levine, describing that he was interviewed on camera in October and noting that the company did not know the specific content of the story. “All told, I was asked extensive questions about whether Health Management has excessive admissions from our emergency departments,” he said. “We do not.”

HMA's stock ended down 1.49% on Friday, closing at $7.95.

HMA, which operates 70 hospitals and is based in Naples, Fla., said in a securities filing in early November that the company believed authorities were investigating its admissions from emergency rooms.

The company launched its own investigation in response to allegations, Levine said. HMA contracted with Opera Solutions, a data analytics company, which looked at emergency room admissions between January 2008 and July 2011. The data were provided to CBS, he said.

“What our experts have determined was that the admissions data simply does not support any allegation that Health Management's emergency rooms were operated inappropriately,” Levine said. “Our performance on these metrics is in line with national averages, and our individual hospitals are in line with local competitors.”

A spokesman for “60 Minutes” declined to comment last week. The broadcast was expected to include an investigation of “allegations from doctors that the hospital chain they worked for pressured them to admit patients regardless of their medical needs,” according to the “60 Minutes” website. The listing did not identify the hospital chain.

Emergency room physicians under contract with HMA consult with patients' physicians, who decide whether to admit patients, Levine said in the investor call. “Simply put, administrators cannot and do not admit patients,” he said.

Levine said the company discussed with “60 Minutes” the regulation and oversight that hospitals face related to whether patients are admitted to the hospital or alternatively held at the hospital for observation. Audits of hospitals' use of admissions and observation status are the subject of a lawsuit brought in early November by the American Hospital Association against the CMS.

Both HMA and its for-profit peer Community Health Systems of Franklin, Tenn., have disclosed in filings with the U.S. Securities and Exchange Commission that they have received requests for information from numerous law-enforcement agencies regarding their admissions policies, some of which are based at least in part on whistle-blower allegations.

On Nov. 2, HMA disclosed that it believed authorities were investigating, among other things, whether ProMed Clinical Systems software had caused the system to make medically unnecessary inpatient admissions from its hospital emergency departments. HMA was served with subpoenas from HHS' inspector general's office in May and June of 2011. The civil divisions of U.S. attorneys' offices in several states are also investigating, according to the SEC filings.

In a Nov. 8 interview, Tom Grossjung, the owner of ProMed Clinical Systems in Plantation, Fla., denied any suggestion that the company's software would be used to override physician judgment in admissions decisions.

“That's absolutely not true,” Grossjung said of the allegations. “The software itself is simply a tool to help them manage their patients through the emergency department. It basically provides them the means by which they can document an encounter appropriately.”

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