Jeffrey Askanazi performed invasive nerve-blocking pain procedures on hundreds of patients after arriving at United Memorial Health Center, Greenville, Mich., in 1994.
Chae Hyun Moon and Fidel Realyvasquez Jr. performed cardiac catheterizations and heart surgeries, respectively, at far higher rates than their Northern California peers during their years at Redding (Calif.) Medical Center.
What the three physicians had in common is they steered millions of dollars in revenue and admissions to their hospitals. And, according to federal prosecutors and medical licensing boards, many of the procedures weren't medically necessary. Prosecutors say other physicians and patients complained to administrators at both hospitals. And at both hospitals the utilization review and peer-review programs--designed to monitor quality of care and detect, eliminate and even mete out punishment for unnecessary treatments--failed in their oversight efforts.
So who will rein in the problem rainmakers? When established systems fail, that task may fall to state and federal regulators.
In the wake of these highly publicized cases, fraud investigators and prosecutors are scrutinizing Medicare billing data and investigating quality-related complaints against high-volume and high-billing physicians.
Dealing with these doctors is a dilemma facing hospital administrators, boards and medical staffs, with each sharing a role in the quality-assurance process. Those roles are increasingly clouded by hospital politics, turf battles, growing economic competition between hospitals and their physicians and evolving relationships between parties that traditionally saw themselves as allies. Healthcare lawyers, governance experts and government officials say that while the number of rainmakers performing medically unnecessary procedures is small, shutting them down can be difficult.
According to federal prosecutors and court documents, the systems designed to catch them were flawed at Redding and United Memorial and did not function properly. And experts said those systemic defects occur elsewhere.
In Askanazi's case it took several years of complaints from physicians and patients and a patient's death before the hospital took action. Askanazi, whom a former United Memorial chief financial officer says was responsible for one-third of the hospital's profits--$1 million to $2 million per year--during his tenure there, was convicted of falsely billing federal health programs and private insurers for the unnecessary procedures in 1998 and sentenced to serve three years in prison.
Earlier this year, United Memorial, the 65-bed flagship of two-hospital United Memorial Health System, pleaded guilty to a single count of fraud and agreed to pay a $1 million fine and reimburse insurers $750,000 for submitting fraudulent bills to Medicare and other payers.
Neither Moon, Redding's former cardiology director, nor Realyvasquez, who chaired the department of cardiac surgery, has been charged in the year-old federal fraud investigation of Redding, but neither has staff privileges or practices at the hospital any longer. Moon could not renew his medical malpractice insurance and voluntarily agreed to a suspension of his California medical license last summer. Realyvasquez went on a leave of absence when Tenet Healthcare Corp., Redding's parent company, suspended the hospital's cardiac program. He is no longer on staff there and is not practicing medicine.
Tenet settled a civil lawsuit in August, agreeing to pay $54 million to the U.S. Justice Department to resolve civil Medicare billing fraud allegations involving Redding. Under the settlement agreement, Tenet admitted no liability but agreed to improve its utilization review and quality improvement processes.
Amid a California Blue Cross report indicating that that "85% of the surgeries at Redding had been unnecessary and that 59% at Tenet's Doctors Medical Center in Modesto (Calif.) had been unwarranted," U.S. Senate Finance Committee Chairman Charles Grassley (R-Iowa) earlier this month requested more information from Blue Cross about the procedures at the two Tenet hospitals. Tenet, Redding and the doctors still face numerous patient lawsuits. Redding and the physicians also could be excluded from the Medicare and Medicaid programs. Although the civil settlement removes Tenet and Redding from criminal liability, it does not cover the doctors, who remain under criminal investigation.
According to current and former government officials, healthcare lawyers and consultants, the three doctors certainly aren't the only rainmakers whose misdeeds continued despite unheeded complaints about shoddy practices and concerns about patient safety. They say the problem is more likely to occur at small community hospitals where influential doctors often have considerable clout.
Treating the problem
American Hospital Association spokesman Richard Wade says it's difficult for the AHA to network with its members on sensitive, subjectively charged issues such as troubles with big-admitter physicians.
"Those things are so particular to the conditions of the hospitals and the special relationships between hospitals, their physicians and the internal dynamics of their medical staffs," Wade says. "These tend to be unique situations."
Edward Robinson, who is retiring at year-end as administrator of 367-bed Community Hospital, Munster, Ind., says that sweeping complaints about physicians with quality problems under the rug could come back to haunt a hospital executive. Robinson recalled a popular obstetrician-gynecologist who was a big admitter at Community and was alleged to have sexually abused several of his female patients.
"He was a well-liked doctor with lots of patients and even held a leadership position in the hospital," he says. "But when we heard about it we took action. All you can do as an administrator is try to do the right thing."
He says administrators must investigate, inform the president of the medical staff and request a special committee of the medical staff to look into the allegations.
"You study the report and share it with your board of directors. They have to take the final action on it. It can be risky, particularly if the doctor is a big admitter and is popular with the staff. You take the risk of getting bounced yourself. But you have to maintain the integrity of the institution. The medical staff has to police itself. They may come up with something entirely unjustified, but then they're the ones taking the heat, not you. If you make a principled decision, you're not tarnished."
Robinson says in a smaller hospital with fewer physicians, the hospital executive could face greater pressure.
"But the process should work the same way," he says. "I've always felt if something goes wrong and you've done your best, whatever heat you're going to take is 100 times better than what happens when you fail to investigate properly or cover something up."
Jay Weinstein, chief operating officer of Louisville, Ky.-based Merit Health Systems, says when he was chief executive officer at hospitals owned by HCA predecessor Columbia Hospital Corp., Tenet predecessor American Medical International and Jackson Memorial Hospital in Miami, he heard similar stories of rainmaker physicians with quality problems skirting accountability and bullying hospital CEOs and boards.
"The whole hospital knows when there's a doctor abusing his license and performing unnecessary procedures," Weinstein says. "When you hear about it you have to kick in utilization review, case management and peer review."
Weinstein says "heavy-hitting admitters" with outrageous demands have approached him. "I've told them not to let the door hit them on their way out," he recalls. "You can never let an earnings statement get in the way of good healthcare, because once you acquiesce you lose control of the situation. It becomes a never-ending saga. You have to learn how to say no and say no with a reason."
The failure of peer pressure
Some healthcare lawyers say there's no doubt peer review often fails to address the problem.
Washington healthcare lawyer Kathleen McDermott of the firm Blank Rome, a former federal prosecutor, says the traditional means that hospitals have relied upon to police physician quality (peer review and other quality-assurance efforts) have come under attack, particularly when economic relationships create conflicts. While those conflicts have always existed to some degree, because of greater public accountability, more aggressive regulatory enforcement and more access to healthcare data by an increasingly probing press, previously private "family secrets" are now often publicly aired.
"There is a danger that peer review can be manipulated by powerful physicians," McDermott says. "Hospitals need to be concerned that they're not using quality assurance and peer review as shields to prevent others from looking at clinical issues. The federal government wants to get at hospitals on this issue."
McDermott says the peer-review process enjoys statutory immunity in many states, making it difficult for hospitals and plaintiff lawyers to pursue physician quality problems.
"I see this as a trend," says McDermott, who represents a group of Maryland cardiovascular surgeons suing a large cardiology group for unfair competition. "Doctors are running peer review and the physician community is protecting physicians in trouble and covering up bad eggs. There are showdowns with hospital boards over these issues. It's hard to get somebody on the peer-review committee to say that this doctor is a bad guy. I'm not sure I'd call it widespread, but there is cause for concern that quality-assurance programs may not be meeting their goals because of the power of physician groups to influence hospital administrators."
James Orlikoff of the Chicago-based governance consulting firm Orlikoff & Associates says the problem of reining in rainmaker physicians is not uncommon but noted that "the broader problem is the issue of variably applied peer review and medical quality functions. It is an important and complex issue."
Orlikoff says there is nothing wrong or illegal with treating physicians differently based on their relative economic contributions. "But when it comes to quality assurance, peer review and credentialing, there should be no preferential treatment of physicians," he says. "Still, in many places there is."
Orlikoff says hospital-physician relations face tremendous pressure now. "CEOs are often caught between the hospital board of directors and the medical staff," he says.
"Any time a physician is a big economic contributor to a hospital, that doctor is also a major power among the physician staff, many of whom depend upon that doctor for referral business. And other doctors are frequently reluctant to take action.
"Rarely do medical staffs complain and want to sanction a doctor over board and CEO objections. I've seen hospital boards turn a blind eye to a physician with quality problems, but the medical staff has always facilitated it," he says.
He says the changing politics, economics and turf battles between physicians and hospitals point to a lack of clarity in the roles of hospital boards and medical staffs.
"The social contract between hospitals and physicians is no longer valid today. It was written in a period when there was a tremendous amount of inefficiency, and that inefficiency was rewarded. Physicians applied for the privilege of being on a hospital's medical staff in a time when that privilege conferred economic benefits, so much so that physicians were willing to perform hospital duties like on-call obligations without compensation," Orlikoff says.
"In return, the hospital was like Switzerland and treated all physicians equally, whether they referred one patient or were major economic contributors. That's why most medical staffs are dysfunctional; power rests with the loud minority, not silent majority. Privileges aren't economically beneficial to doctors anymore, which is why they are increasingly refusing to serve on hospital committees or on-call lists without being paid."
Orlikoff says hospitals must learn how to effectively compete with physicians who are siphoning off lucrative hospital business lines such as ambulatory surgery and specialty services are moving to boutique cardiac and orthopedic hospitals. He says hospitals also must find ways to legally reward the loyalty of doctors who are major economic contributors. "But rewarding loyalty cannot run against the basic quality precepts," he says.
Bill Monnig, a suburban Cincinnati urologist who chairs the organized medical staff section of the American Medical Association, says the AMA has filed supportive briefs in six cases involving imbroglios with hospital medical staffs, an indication of a growing chasm between hospitals and their physicians.
He says attacks on the peer-review system are symptomatic of that disconnect.
"The peer-review system works very well the majority of the time," he says. "But we've seen an erosion of confidentiality in the peer-review mechanism in many states. If the peer-review process is not kept confidential, it's difficult to do a good job of reviewing cases. The intention should be improving patient care, not necessarily getting rid of doctors. When the system doesn't work, the hospital board has the opportunity of seeking outside review and getting a second opinion if it's needed."
Only staff physicians frequently working and observing colleagues possess the expertise to conduct a peer review, Monnig says, pointing out that the relationship is codified in the Medicare conditions of participation and the accreditation standards of the Joint Commission on Accreditation of Healthcare Organizations.
"Is there a risk that those (peer-review) doctors will support big producers and rainmakers? Yes, there's always that risk. There's also a risk that doctors will render an opinion and be overruled by the hospital CEO or board. But I think there's an even greater risk of hospitals basing their decisions on economic factors (rather) than doctors."
Monnig says there's another side to the story that often goes untold. He says some hospital peer-review committees have taken harsh stands against their own and revoked physician hospital privileges or limited the scope of practice. He says in those cases the peer-review committees have done their duty but often are circumvented by publicity-shy hospital executives.
"In a number of cases hospital leadership went to those (problem) doctors and said we don't need that kind of publicity and asked the doctors to resign to avoid disgrace," he says. "All that did was push the problem onto someone else's plate. I don't think turning a blind eye to the problem is a very good solution."
He says that before the current economic climate muddied the waters, the relationship between medical staff and hospital administrators was a good and mutually beneficial one clearly defined by the hospital board and medical staff bylaws. He says local physicians were the early impetus for the establishment of most community hospitals.
"We forget where we came from and where we're trying to get to," Monnig says. "Instead, everyone is focusing on small profit centers that change every 10 years. The concept of hospitals and community doctors working together isn't going away. We will go through this era of disconnect to eventually find a solution. But right now, everyone is working hard to make sure they're not being disadvantaged."
Monnig says there is an opportunity created by this conflict to work together to resolve these issues, noting that the AMA has agreed to intervene in several hospital-physician conflicts to resolve problems. "The public will never understand this battle between doctors and hospitals," he says. "And beating each other over the head isn't going to solve it either."
Mac Thornton, former chief counsel in HHS' inspector general's office and now in private practice with the Washington office of Sonnenschein, Nath & Rosenthal, says the inspector general and the Justice Department jointly participate in a quality-of-care task force investigating allegations of patient harm in hospitals and nursing homes. Thornton says fraud fighters have access to Medicare and Medicaid billing data and can easily find the biggest billers in hospitals. Although Thornton says top-billing providers certainly should not be presumed to be committing unnecessary procedures or fraud, he points out that federal investigators can easily obtain the data as a launching ground for investigations and pull a few random charts for review.
"The government says it's looking for high producers who have run amok. And hospitals are at risk because the government is raising the question when it perceives that nobody has the courage to challenge those doctors through peer review, utilization review or other mechanisms. They believe the system doesn't always seem to work when there's a doctor or two generating disproportionately large revenue. Nobody's willing to touch them."
Thornton says hospital executives should hire independent review organizations to look at their biggest-billing physicians and review some charts.
"It could save them problems down the road."
Steven Bjelich, president and CEO of Cape Girardeau, Mo.-based St. Francis Healthcare System, says a hospital's CEO and board must always be consistent in reviewing their medical staffs.
"There's no percentage in giving favoritism to one doctor because it will come back to bite you," Bjelich says. "If there's an aberration, the medical community will note that. Any financial gains would be short term, and we're in this for the long term."
Bjelich says he believes the adverse publicity generated by the Redding and United Memorial cases does have a silver lining.
"These examples reinforce our values and make it easier for the rest of us to do the right thing," he says. "Nobody wants that kind of attention."
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