In the first federal lawsuit alleging Medicaid fraud against a hospital, the U.S. Justice Department charged 228-bed Truman Medical Center in Kansas City, Mo., with submitting false bills to the state of Missouri for the treatment of indigent pregnant women.
Also charged was Hospital Hill Health Services Corp., the hospital's 115-physician faculty practice plan.
The government filed the five-count civil complaint against the two provider organizations May 24 in U.S. District Court in Kansas City, Mo.
The case is noteworthy for a couple of reasons:
* Truman is a nationally known, private, not-for-profit hospital that treats the bulk of the Kansas City market's indigent population. Medicare and Medicaid patients represent more than 80% of the hospital's annual patient days.
* The last two physician executives to head the hospital during the period of alleged billing fraud are prominent industry leaders: E. Ratcliffe Anderson Jr., M.D., now executive vice president of the American Medical Association in Chicago, and James Mongan, M.D., now president of Massachusetts General Hospital in Boston.
Mongan was president and chief executive officer of Truman from 1981 to 1996. Anderson was president and CEO from 1996 to 1998. John Bluford is the current president and CEO.
The lawsuit does not suggest that any of the three men knew of or approved the alleged false billings, which the government charges began in 1993.
In a press conference, Steven Hill, U.S. attorney for the western district of Missouri, did not rule out the possibility of filing criminal charges against individuals.
Bluford told MODERN HEALTHCARE: "All of our patients receive the highest standard of care available, by qualified licensed providers. Much of the suit rests with technical documentation and billing disputes, and doesn't affect patient care."
Bluford said the hospital and Hospital Hill Health Services deny the allegations and will defend themselves.
The complaint against the hospital and faculty practice plan asks for triple damages for monetary losses and $10,000 in civil penalties per false claim filed. The number of applicable cases can't be determined before discovery, according to the suit, which says more than 100 such claims may have been filed.
Between 1993 and 1999 the hospital and its doctors delivered 15,000 babies.
The suit claims that the hospital and its doctors billed under a Medicaid code that paid $550 for prenatal care if a woman saw the same doctor five times. This policy, which Medicaid started in 1990, was designed to improve continuity of care, patient outcomes and satisfaction. If a woman saw a different doctor at each prenatal visit, each physician could bill only $17 per visit.
The lawsuit includes photocopies of antepartum patient records that show a different physician initialed each visit, even though Medicaid was billed for $550. The lawsuit also claims that in some cases babies were delivered by unqualified nurses and medical students instead of the Medicaid-approved physicians who billed for the services.
Richard Wade, senior adviser for communications at the American Hospital Association, said the case, like other investigations nationwide, asks who provided care and exactly what care the government paid for.
The lawsuit argues that the hospital and its doctors willfully sought to deprive indigent women of the standard of care they deserved. "This is about the level and continuity of care for the unborn babies of the poor and needy in our community, and how a hospital and its billing entity cut corners for the sake of money," said U.S. Attorney Hill in a written statement. "It is really less a case about Medicaid fraud than it is about the type of care that we afford to the most innocent and helpless among us."
In suing Truman and its physicians group, however, the government is attacking an organization whose sole mission is to care for the indigent. Heavily dependent on state and federal funds, the hospital also receives millions of dollars per year from local taxpayers and enjoys solid support from the Kansas City business and political community.
Jackson County taxpayers contribute $10 million and Kansas City taxpayers put in another $27 million a year to keep the hospital running.