Louisiana's healthcare community continued to deal with the effects of Hurricane Katrina, amid an intensified state investigation into employee deaths at one hospital, 500 employee layoffs at another and threat of closure at two more.
Louisiana Attorney General Charles Foti subpoenaed 73 em-ployees from Tenet Healthcare Corp.'s Memorial Medical Center, New Orleans, as part of an investigation into whether patients were euthanized in the aftermath of Hurricane Katrina. Foti spokeswoman Kris Wartelle said the investigation is in response to news reports and reports received directly by the attorney general's office.
A memo to Memorial employees obtained by Modern Healthcare advised them of their rights if they consent to be interviewed and cautioned that if they agree to be interviewed, they have an "obligation ... to provide complete and truthful information in response to questioning."
A Memorial Medical Center spokesman said officials have been cooperating with the attorney general's office and "never discouraged any employee from working" with the investigators. Wartelle said subpoenas were issued to "key personnel" who might have knowledge of what transpired. "We're taking (the allegations) very seriously," she said. "If it turns out nothing happened, our investigation will show that." The coroner found 45 bodies at Memorial more than a week after the hospital was shut down by flooding. Tenet officials said at the time that all living patients had been evacuated while a significant number of the dead had been patients at a long-term acute-care hospital inside Memorial that was managed by another company.
Meanwhile, Touro Infirmary, New Orleans, will eliminate nearly 500 positions, roughly one-third of its workforce, from its payroll Oct. 31, hospital President and Chief Executive Officer Les Hirsch said. The hospital is operating 84 beds, about one-third of its average daily census before it was shut down by Hurricane Katrina in early September. The layoffs include about 50 nurses, many in psychiatry and rehabilitation, from a total nursing staff of 497, and one physician from an outpatient department.
Hirsch said the irony is Touro, the only adult hospital to reopen in Orleans Parish, is recruiting medical-surgical and critical-care nurses. Touro reopened its emergency department Sept. 28 and has brought other services back incrementally at a total reopening cost of as much as $6 million so far. Hirsch said he expects the hospital to sustain substantial operating losses in the months to come.
New Orleans's two public hospitals are no longer fit for service because of the ravages of Hurricane Katrina, the system's CEO told the Louisiana State University Board of Supervisors. Donald Smithburg, CEO of the Louisiana State University Health Care Services Division, said it will cost $258 million to repair Charity Hospital and almost $400 million to replace it. Repairing University Hospital will cost $117 million and replacing it $172 million, he said. Charity operates the only trauma-care center in the southern part of the state.
The public nine-hospital system is on the verge of financial collapse, Smithburg said in a speech in Washington last week. The system needs $15 million per month for the next six months just to meet payroll and another $200 million in interim financial support for the seven hospitals that have taken on additional work because of New Orleans hospital closures. Smithburg said 2,900 of the system's 8,000 employees will be put on leave without pay this week, a first step toward permanent layoffs on Dec. 17, unless federal money comes in.
CMS starts doc quality initiative
The CMS announced a voluntary quality- reporting initiative for physicians, possibly a first step to a Medicare pay-for-performance program for doctors. The initiative starts January 2006 with 36 quality measures developed by the American Medical Association, the National Quality Forum and other groups. More measures will be phased in during 2006, the CMS said. The agency said the data will be for its use and physicians', and will not be made available to the public. Hospitals already receive additional Medicare payments for reporting data to the CMS, and the agency has begun a pay-for-performance demonstration project involving medical groups (See story, p. 6). Its announcement did not address additional reimbursement for physicians who report the data under the latest initiative. The CMS said the initiative is part of its ongoing effort with Congress to make sure Medicare is paying doctors adequately without increasing overall program costs.
CFO pleads guilty to kickbacks
The former chief financial officer at 119-bed Provident Hospital, Chicago, pleaded guilty to confirming false invoices and taking kickbacks in a fraud scheme. According to a plea agreement, the former CFO, Earl Bell, received $12,500 from Mary Payne after vouching for phony invoices she submitted to sell nonexistent accounts receivable from two health-staffing agencies to financial institutions between 1998 and 2001. Bell repeatedly lied to financers who sought verification that Payne's staffing agencies were owed money by Cook County-owned Provident, according to the agreement. Bell faces up to five years in prison and $341,783 in restitution. Payne and her then-husband, Anthony Payne, also pleaded guilty to the scheme. At deadline, none of the three could be reached for comment. Bell's attorney, Anita Rivkin-Carothers, said his deal with prosecutors did not include an agreement to cooperate.