Medicare Compliance & Reimbursement

Hospital chain and OIG come to terms on potential Medicare ouster.

The HHS Office of Inspector General isn't afraid to use its most potent enforcement weapons when it comes to medically unnecessary care. On Dec. 11, the HHS Office of Inspector General and Tenet Healthcare Corp. reached a deal on the watchdog agency's proceedings to exclude Tenet's Redding Medical Center from Medicare, Medicaid and other health care programs - a penalty that would be financially crippling. The Santa Barbara, CA-based hospital chain has agreed to sell RMC to an unrelated third party under terms acceptable to the OIG. The exclusion action was based on allegations that, between 1999 and 2002, RMC performed cardiac services (including cardiac catheterizations and coronary artery bypass grafts) that were medically unnecessary and "failed to meet professionally recognized standards of health care." Problems in RMC's now suspended, but once wildly profitable, cardiology program have already resulted in a $54 million settlement payout, the largest ever in a case involving medical necessity fraud. "When hospital quality review systems break down and unnecessary medical care is provided, we will use our authorities to remedy the problem," says acting principal deputy IG Dara Corrigan. "In a serious case such as this, those remedies may involve excluding an entity from participation in federal health care programs, requiring the sale or transfer of a facility to an unrelated third party, or imposing stringent integrity and quality measures, as appropriate. At the same time, we will strive to ensure that all patients have access to care." "We believe that the decision to allow Tenet to sell this hospital is in the best interest of the health care programs and their beneficiaries," Corrigan adds. The RMC case is the first time the OIG has initiated exclusion proceedings against a hospital based on unnecessary or substandard care. Lesson Learned: The RMC case shows the feds will get tough on providers who flout medical necessity rules.