Tenet’s court filing, made in the case it filed April 11 in U.S. District Court in Dallas, seeks a broad range of documents from Community. These include documents related to: Community’s admissions criteria handbook, known as the Blue Book; its use of software by Pro-MED Clinical Systems; agendas or reports of weekly divisional conference calls that referenced rates of admissions, especially admissions from the emergency department, from 2006 onward; more information on various government investigations; and Community’s communications with the U.S. Securities and Exchange Commission, investors and journalists related to the offer to buy Tenet.
Stock analysts suggested that if Tenet’s board had any interest in a transaction, then the offer should get them to the table. Absent that interest, the deadline would serve as an exit strategy for Community, allowing management to focus on the investigations and other acquisition opportunities. Even if the deal falls through, the central question of Tenet’s lawsuit—whether Community’s hospitals are billing for inpatient admissions when the patients should be billed as observation visits—will remain, as the lawsuit has heightened the scrutiny of one-day stays.
L. Greg Cunningham, founder and CEO of the American Case Management Association, said the inpatient-vs.-observation question dates to well before Medicare’s Recovery Audit Contractor program. Medicare fiscal intermediaries had varying interpretations of the observation visit criteria as far back as the late 1980s, Cunningham said.
Case managers have to be diplomatic to sell their decisions to physicians, clinical nurses and even patients’ families, Cunningham said. “One of the phrases that I use when I’m teaching to hospital administrators in particular is that you’re asking a group of people to do a huge amount of decision making with zero authority,” Cunningham said, adding, “It’s still the physician’s decision, ultimately.”
Dr. Michael Ross is director of the observation medicine program at Atlanta-based Emory Healthcare and a former chair of the observation medicine section for the American College of Emergency Physicians. Physicians can’t be expected to know the lengthy, ever-changing admissions criteria, such as the InterQual set that is most widely used, Ross said.
Unfortunately, Ross said, patients who would be best served in observation are stuck in a healthcare financial world that sees only black and white. “We keep trying to shoehorn them into either outpatient or inpatient,” he said. “The dichotomy works fine for 90% of patients, but not this group.”
In addition to the unique circumstances of each patient, the decision is further complicated by the different resources available at each hospital, said Dr. Chris Baugh, an attending physician in the emergency department at Brigham and Women’s Hospital in Boston. According to the National Hospital Ambulatory Medical Care Survey by the Centers for Disease Control and Prevention, only about half of hospitals that had 50,000 or more emergency visits in 2007 had a separate observation unit, Baugh said. Only a third of hospitals with 20,000 to 50,000 visits had such a unit, and specialist physician coverage varies widely, too, he added.
“You could argue that observation is not an available option, at least as a unit, in more places than not,” Baugh said. “You could still use observation in the emergency department, but that hurts capacity, and that’s not a viable option always for hospitals that need the emergency space.”