“Tenet is misguided and in fact, wrong,” said Wayne Smith, chairman, president and CEO of Community. Community contends that Tenet's lawsuit is based on an invalid metric, observation rate for Medicare patients, which Tenet defined in the lawsuit as the ratio of observation stays to the sum of observation stays and one-day inpatient admissions. One slide notes that Tenet's analysis excluded Universal Health Services, King of Prussia, Pa., which had an observation rate very similar to Community's.
Community notes in the slides that it has updated its Blue Book admissions criteria guide six times since its initial version was completed in 2000, including as recently as July 2010. Prior to the lawsuit, Community has said, it decided to adopt the more widely used InterQual set of admissions criteria. Moreover, Smith said, attending physicians alone make almost every admission decision at Community hospitals, “not Blue Book, not InterQual and not Pro-MED.”
The company uses software by Pro-MED Clinical Systems at most, but not all, of its hospitals, and, as detailed in the presentation, Pro-MED is used primarily as a tool for collecting information about emergency room operations. Only three Community hospitals have used its “check module” to help with admission decisions, and the company found that this module was little used, according to Dr. Barbara Paul, senior vice president and chief medical officer of Community.
Other presenters included: Andi Bosshart, vice president-corporate compliance and privacy officer; Larry Cash, executive vice president and CFO; and Dr. Lynn Simon, senior vice president-quality and resource management.
Community also contends that it is right around the industry average on what it says are more relevant, widely used metrics, such as emergency room admission and discharge rates, length of stay and various metrics related to one-day stays. Community's analysis compared it not only to its investor-owned peers but large tax-exempt systems as well. The company also defended its actions at the hospitals formerly operated by Triad Hospitals, which Community acquired in 2007, detailing the extensive training and improved resources the company made available at the former Triad hospitals.
Community also reported its results for the quarter ended March 31. The company earned profits of $61.3 million, down 12.4% from the year-ago quarter, mostly because of losses at a hospital held for sale. Revenue increased nearly 9%, to $3.41 billion, thanks to acquisitions. Same-hospital admissions fell 3.4%, but strong outpatient volume left adjusted admissions flat.
In a statement, Tenet said, “Nothing we heard today from Community Health diminishes our confidence in our analysis or allegations. We plan to vigorously pursue our claims in court.”