Healthcare Business News

$700M in kwashiorkor charges trigger OIG audit

HHS finds 217 cases of kwashiorkor at two hospitals weren't legitimate

By Joe Carlson
Posted: February 12, 2014 - 2:45 pm ET

Medicare officials have noticed a suspicious jump in the diagnosis of kwashiorkor, a rare form of malnutrition generally seen in children in poor countries during famines. Not one of 217 claims for the treatment of the condition in Medicare patients was proven legitimate in recent audits of two U.S. hospitals.

All told, the federal healthcare program paid more than $700 million in 2010 and 2011 for patients diagnosed with kwashiorkor—an amount so high that it has triggered a national review of claims for the condition. Kwashiorkor typically affects children, and Medicare is primarily limited to adults 65 and older.

One of the most visible signs of kwashiorkor is a distended belly in children afflicted with the condition. Though it has traditionally been known in tropical and subtropical climates in remote sections of Africa, some experts say it may be documented in traumatic brain-injury patients who receive protein through a feeding tube over prolonged periods of time.

As a diagnosis, kwashiorkor pays far more than other forms of malnutrition, and the U.S. Justice Department has accused one Maryland hospital of installing electronic health-record systems that specifically prompted clinicians and coders to classify almost any protein-deficiency case as kwashiorkor. That False Claims Act case was dismissed by a judge in 2011.

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Late last month, HHS' Office of the Inspector General released audit results from two Catholic community hospitals that each billed Medicare for more than 100 cases of kwashiorkor between 2010 and 2011. The investigators found that the medical records didn't justify any of the diagnoses. In both cases, the hospital conceded that none of the cases were true kwashiorkor and blamed computer errors.

Mercy Medical Center, a 567-bed hospital in Des Moines, Iowa, owned by Catholic Health Initiatives, agreed to reimburse the government $89,000 for overpayments for its 102 cases.

The auditors found that although kwashiorkor wasn't documented, most of the patients had secondary diagnoses that would have justified the same level of payments.

Mercy officials have since implemented a patch in their electronic billing system so that a link is provided to the latest legal guidance on kwashiorkor any time the condition shows up in patient records.

At Christus St. Vincent Regional Medical Center, a 195-bed hospital in Santa Fe, N.M., owned by Christus Health, hospital officials agreed to pay back $147,000 after investigators concluded that none of the hospital's 115 kwashiorkor cases were legitimate.

The hospital in 2010 had been using faulty software that resulted in incorrect diagnoses, according to a letter that hospital President and CEO Bruce Tassin wrote in response to the investigation. Even after a software patch was implemented in 2010 by the manufacturer, the errors kept happening. The flaw has since been fixed, and the hospital had not seen another kwashiorkor case as of September.

Prime Healthcare Services, a for-profit hospital chain based in Ontario, Calif., has acknowledged being subpoenaed by federal investigators for information about its malnutrition cases. That came after the investigative journalism organization California Watch raised questions about the high rates of kwashiorkor in the chain's billing.

Prime officials told California Watch that the company was being targeted by federal investigators because of false allegations lodged against it by the Service Employees International Union, which represents some Prime employees.

Follow Joe Carlson on Twitter: @MHJCarlson

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