HHS Inspector General Daniel Levinson has announced his intent to exclude a troubled Miami Beach, Fla., for-profit hospital from billing federal health programs, seeking to exclude 155-bed South Beach Community Hospital, known for more than 40 years as South Shore Hospital and Medical Center, for extensive and repeated violations of its corporate integrity agreement. "The decision to issue a proposed exclusion letter to South Shore was made after careful consideration of the facts and circumstances regarding the actions of this hospital," Levinson said in a news release. "In the majority of cases, provider organizations comply with the terms of the (corporate integrity agreement). However, South Shore's repeated and egregious failure in this case to abide by the terms of its CIA requires the OIG for the first time to seek exclusion for such a violation."
Exclusion is widely considered the financial kiss of death to most healthcare organizations, particularly hospitals, which depend on Medicare, Medicaid, TriCare and other government insurers for 40% to 70% of their revenue. Of its total patient revenue in fiscal 2004 of $94.6 million, nearly two-thirds, or $56.7 million, came from Medicare and Medicaid.
In its notification letter to South Beach, the inspector general's office said the hospital failed to comply with provisions of its corporate integrity agreement by not completing required financial and compliance-monitoring reports as mandated by the agreement.
It wouldn't be the first time the hospital has faced legal scrutiny. In 2002 it paid nearly $1 million to settle a whistleblower lawsuit for overcharging Medicare for unallowable items on its cost report. The hospital settled without admitting wrongdoing and signed a corporate integrity agreement, but allegedly failed to comply with the terms of that agreement. In 2003 the hospital paid a $50,000 fine for allegedly violating its CIA. In 2004 South Beach paid $12,500 to settle allegations it violated the 1986 Emergency Medical Treatment and Active Labor Act.
Linda Quick, president of the South Florida Hospital Association, said improper activity on the part of any hospital diminishes the public image of all hospitals. "The association wants this problem resolved as quickly as possible," Quick said.
At deadline telephone calls seeking comment from South Beach executives were not returned. The hospital has 30 days to demonstrate compliance with its CIA obligations and has the right to appeal any exclusion to an HHS' administrative law judge and a department appeals board. -- by Mark Taylor