In a follow-up interview, the nurse said a doctor at the Lawnwood
Regional Medical Center, in the small coastal city of Fort Pierce, had
been performing heart procedures on patients who did not need them,
putting their lives at risk.
“It bothered me,” the nurse, C. T. Tomlinson, said in a telephone
interview. “I’m a registered nurse. I care about my patients.”
In less than two months, an internal investigation by HCA concluded the nurse was right.
“The allegations related to unnecessary procedures being performed in
the cath lab are substantiated,” according to a confidential memo
written by a company ethics officer, Stephen Johnson, and reviewed by
The New York Times.
Mr. Tomlinson’s contract was not renewed, a move that Mr. Johnson said
in the memo was in retaliation for his complaints.
But the nurse’s complaint was far from the only evidence that
unnecessary — even dangerous — procedures were taking place at some HCA
hospitals, driving up costs and increasing profits.
HCA, the largest for-profit hospital chain in the United States with 163
facilities, had uncovered evidence as far back as 2002 and as recently
as late 2010 showing that some cardiologists at several of its hospitals
in Florida were unable to justify many of the procedures they were
performing. Those hospitals included the Cedars Medical Center in Miami,
which the company no longer owns, and the Regional Medical Center
Bayonet Point. In some cases, the doctors made misleading statements in
medical records that made it appear the procedures were necessary,
according to internal reports.
Questions about the necessity of medical procedures — especially in the
realm of cardiology — are not uncommon. None of the internal documents
reviewed calculate just how many such procedures there were or how many
patients might have died or been injured as a result. But the documents
suggest that the problems at HCA went beyond a rogue doctor or two.
At Lawnwood, where an invasive diagnostic test known as a cardiac
catheterization is performed, about half the procedures, or 1,200, were
determined to have been done on patients without significant heart
disease, according to a confidential 2010 review. HCA countered recently
with a different analysis, saying the percentage of patients without
disease was much lower and in keeping with national averages.
At Bayonet Point, a 44-year-old man who arrived at the emergency room
complaining of chest pain suffered a punctured blood vessel and a
near-fatal irregular heartbeat after a doctor performed a procedure that
an outside expert later suggested might have been unnecessary,
documents show. The man had to be revived. “They shocked him twice and
got him back,” according to the testimony of Dr. Aaron Kugelmass in a
medical hearing on the case.
In another incident, an outside expert described how a woman with no
significant heart disease went into cardiac arrest after a vessel was
cut when a Bayonet Point cardiologist inserted a stent, a meshlike
device that opens coronary arteries. She remained hospitalized for
several days, according to a person who has reviewed internal reports.
On Monday morning, in a conference call with investors, company
executives disclosed that in July the civil division of the United
States attorney’s office in Miami requested information on reviews
assessing the medical necessity of interventional cardiology services
provided at 10 of its hospitals, located largely in Florida, but also
two or three hospitals in other states. In the conference call and in a statement on its Web site, the company also referred to inquiries by The Times. HCA’s stock ended nearly 4 percent lower Monday, at $25.55.
In a recent statement, HCA declined to provide evidence that it had alerted Medicare, state Medicaid
or private insurers of its findings, or reimbursed them for any of the
procedures that the company later deemed unnecessary, as required by
law.
“When the company becomes aware of a situation in which we might have a
reimbursement obligation, we assess, with outside resources, what our
reimbursement obligations might be,” the statement said.
HCA also declined to show that it had ever notified patients, who might
have been entitled to compensation from the hospital for any harm.
Some doctors accused in the reviews of performing unnecessary procedures are still practicing at HCA hospitals.
The cardiologists say the reviews of their work did not accurately
reflect the care they provided, and HCA says the reviews “are not, by
any means, definitive,” according to an e-mailed response by the
company. HCA says it took whatever steps were necessary to improve
patient care. It also said “significant actions were taken to
investigate areas of concern, to bring in independent reviewers, and to
take action where necessary.”
Details about the procedures and the company’s knowledge of them are
contained in thousands of pages of confidential memos, e-mail
correspondence among executives, transcripts from hearings and reports
from outside consultants examined by The Times, as well as interviews
with doctors and others. A review of those communications reveals that
rather than asking whether patients had been harmed or whether
regulators needed to be contacted, hospital officials asked for
information on how the physicians’ activities affected the hospitals’
bottom line.
HCA denies its decisions at these hospitals were motivated by financial
considerations, but rather “demonstrate the strong focus we have on
quality patient care.” The company also says that more than 80 percent
of its hospitals are in the top 10 percent of government rankings for
quality.
Although HCA has hospitals in about 20 states from California to
Virginia and Alaska to Texas, Florida, with its large older population,
is a critical and growing market for hospital chains and especially for
HCA. HCA’s Florida hospitals provide about 20 percent of the company’s
revenue.
The need to root out Medicare fraud — billing for unnecessary procedures, for example — is high for all hospitals. In 2003, Tenet Healthcare agreed to pay $54 million
to settle allegations that unnecessary cardiac procedures were being
performed over six years and billed to Medicare and Medicaid at one of
its hospitals in California, Redding Medical Center.
But the pressure is even greater for HCA. In 2000, the company reached
one of a series of settlements involving a huge Medicare fraud case with
the Justice Department that would eventually come to $1.7 billion in
fines and repayments. The accusations, which primarily involved
overbilling, occurred when Rick Scott, now the governor of Florida, was
the company’s chief executive. He was removed from the post by the board
but was never personally accused of wrongdoing.
As part of the settlement with the federal regulators, HCA signed a 97-page Corporate Integrity Agreement
that extended through late 2008. It detailed what had to be reported to
authorities and provided for stiffer penalties if HCA failed to do so.
If there were intentional violations of such an agreement, it would mean
“that a defendant, already caught once defrauding the government, has
apparently not changed its corporate culture,” said Michael Hirst, a
former assistant United States attorney in California who oversaw the
case against Tenet. Mr. Hirst now represents whistle-blowers.
In its statement, HCA said it fulfilled any obligation it had under the
agreement to report “substantial overpayment.” The revelations in the
documents come at a significant time in the evolution of medical
treatment in the United States — from independently owned hospitals to
large, corporate chains.
HCA exemplifies the trend. In 2006, HCA was taken private by a group of private equity
firms, including Bain Capital, the firm co-founded by Mitt Romney, the
presumptive Republican presidential nominee. (By that time, Mr. Romney
was no longer a partner in Bain.) By mid-2010, the private equity owners
were eager to start cashing out of their investment. While HCA prepared
for an initial public offering of its stock that took place in 2011, it
borrowed to pay the private equity firms $4.3 billion in dividends.
The ability to take these financial steps hinged on HCA showing continued robust profit growth at its hospitals.
And for that the company turned, in part, to cardiac care.
An Early Sign of Trouble
Two years after the 2000 fraud settlement, company executives uncovered
problems in the cardiac catheterization lab at Cedars Medical Center,
according to accounts that became public.
An outside consulting group hired by HCA provided a report that raised
“questions regarding the medical necessity of some of the procedures,”
the company said in a news release in early 2003. HCA said it was
suspending eight physicians from doing certain cardiac procedures, was
providing the report to a United States attorney and would refund any
inappropriately submitted hospital claims.
“This issue at Cedars and the steps taken to investigate and resolve it
should be seen and understood in the larger context of HCA’s commitment
to quality care and patient safety,” Jack O. Bovender Jr., who was then
the company’s chief executive, told investors in a conference call that
February.
HCA will not say whether it had ever refunded payments for the
unnecessary procedures. Medicare officials said they could not determine
whether the agency had received payments, and the United States
attorney’s office in Miami declined to comment. The hospital allowed
four of the physicians to return under monitoring, according to HCA, and
two did so. “We believe the hospital acted appropriately,” the company
said in its recent statement. Still, the negative publicity swirling
around Cedars worried HCA executives, according to internal e-mails.
They wanted to avoid a replay when similar problems were discovered at
another HCA hospital — Bayonet Point.
An Outbreak of Stents
Nestled along the west coast of Florida, about 45 miles northwest of
Tampa, the town of Hudson, with its winding canals, is largely a quiet
fishing community.
Soon after the Cedars episode, HCA executives noticed that the hospital
in Hudson, the 290-bed Regional Medical Center Bayonet Point, was
implanting an unusually high number of cardiac stents, given the size of
the population.
Late in 2003, executives from HCA’s headquarters in Nashville dispatched
a group that oversees its hospitals’ cardiac care to investigate. In a
confidential memo, the team cited incidents at Bayonet Point where
patients were treated for multiple lesions, or blockages, even when “the
second lesion (or third) did not appear to have significant disease.”
The team went on to note “several cases” in which patients were treated
even though their arteries did not have significant blockages.
In a transcript of confidential hearings held later, the lawyers for HCA
were blunt. In looking at one physician, Dr. Sudhir Agarwal, Dr. Martin
I. Kalish, a physician who served as an outside lawyer for HCA, said
the “style of clinical practice leads to unnecessary procedures and
unnecessary complications.”
On the team’s recommendation, HCA brought in an external company,
CardioQual Associates of Franklin, Mich., in 2004 to examine medical
records from Bayonet Point.
In a confidential memo prepared in December 2004 and reviewed by The
Times, CardioQual concluded that as many as 43 percent of 355
angioplasty cases, where doctors performed invasive procedures to open
up a patient’s arteries, were outside reasonable and expected medical
practice.
Worse, the investigation revealed that some physicians had indicated in
medical records that the patients had blockages of 80 to 90 percent when
a later, more scientific analysis of a sampling of cases revealed the
blockages had ranged from 33 to 53 percent.
Cardiologists generally do not operate on any blockage less than 70
percent, said Dr. Rita Redberg, a prominent cardiologist at the
University of California, San Francisco. The significant disparities
between the magnitude of blockage being cited by the doctors at Bayonet
Point and the CardioQual review “raises real concerns that this wasn’t
just error, but it was intent” by the doctors, she said.
After receiving the CardioQual report, Bayonet Point suspended the
privileges of nine physicians in late 2004. But unlike the Cedars
episode, when HCA turned over its findings to regulators and
authorities, HCA took steps to withhold details of its conclusions to
the media and others, according to internal communications. In January
2005, David Williams, who was then the chief executive of Bayonet Point,
wrote in an e-mail: “Clearly, we have protected ourselves under the
peer review umbrella and have released very little information.” The
recipients of his message included Dan Miller, who then oversaw HCA’s
hospitals in western Florida, and Charles R. Evans, a Nashville
executive who was president of all of HCA’s hospitals on the eastern
side of the country.
In his response, Mr. Evans thanked Mr. Williams for the update and asked for a “summary as to the business impact.”
In a later internal communication, a representative for HCA said the
company had successfully used confidentiality rules to withhold the
damaging CardioQual report from the Florida attorney general, whose
Medicaid Fraud Control Unit had started an investigation of the
physicians. In response to questions from The Times, however, HCA said
it had provided “substantially all of the information in the report” to
state regulators. The attorney general’s office did not return calls
seeking comment.
One of the subjects of that investigation was Dr. Agarwal. The
CardioQual review of 20 of his cases concluded that fewer than half were
within reasonable and expected practice. Dr. Agarwal did not return a
call to his office.
Anthony Leon, a lawyer for Dr. Agarwal and the other eight Bayonet Point
physicians, said in a statement: “There is absolutely no merit to any
allegation that any of these doctors were performing unnecessary
procedures or performing procedures that led to unnecessary
complications as a style or pattern of practice.” The suspensions of Dr.
Agarwal and another physician were found to have been done in error by
an outside panel in hearings in 2005 and 2006, Mr. Leon added. A doctor
on the panel said Dr. Agarwal’s procedures were found to be within
established medical practice, and his full privileges were reinstated in
early 2006.
Dr. Agarwal and the other eight physicians have filed defamation
lawsuits in county court, claiming the actions and statements of the
hospital and HCA ruined their practices. HCA has denied the claims.
HCA would soon discover its problems didn’t end at Bayonet Point.
A Nurse Speaks Out
C. T. Tomlinson said he could not believe his eyes as Dr. Abdul Shadani
prepared to insert a stent in a heart patient in the cardiac
catheterization lab of HCA’s Lawnwood hospital in the late spring of
2008.
Mr. Tomlinson, a traveling nurse who had worked at more than a dozen
cath labs before arriving at Lawnwood, said in a telephone interview
that he saw no blockages in the images of the patient’s artery.
“Sir, what are we going to fix?” Mr. Tomlinson recalled asking Dr.
Shadani. The doctor responded by asking the nurse if he did not see the
90 percent blockage in the artery. Mr. Tomlinson did not, and looked at
the others in the room. They all shrugged, he said, and Dr. Shadani
inserted the stent.
Mr. Tomlinson reported his concerns to hospital officials. Shortly
after, he was told his contract would not be renewed. An internal memo,
however, concluded that Mr. Tomlinson had been retaliated against. Even
so, that summer the hospital opened an investigation. Internal
communications show that HCA officials in charge of quality were
involved in the decision to review a sample of cases from some
cardiologists at the hospital.
The reviewer, an outside heart specialist, concluded there were problems
with 13 of the 17 cases performed by Dr. Shadani, including unwarranted
cardiac catheterizations and patients who were needlessly subjected to
multiple procedures.
While it is not clear whether HCA accepted the reviewer’s findings, Dr.
Shadani continues to practice at Lawnwood, according to the Web site.
Dr. Shadani did not return several telephone calls seeking comment.
The outside reviewer found similar problems with several other
cardiologists at Lawnwood. The company declined to say whether it
alerted regulators or patients of its findings but it said it
established stricter rules governing how cardiologists should document
their cases.
A Moneymaking Practice
Cardiology is a lucrative business for HCA, and the profits from testing
and performing heart surgeries played a critical role in the company’s
bottom line in recent years.
Some of HCA’s busiest Florida hospitals perform thousands of stent
procedures each year. Medicare reimburses hospitals about $10,000 for a
cardiac stent and about $3,000 for a diagnostic catheterization.
But in recent years, doctors across the country have been less quick to
implant stents, instead relying on drugs to treat blockages. Medicare
has also questioned the need for patients who receive cardiac stents to
stay overnight at the hospital, cutting into the profitability of the
procedures at many hospitals.
HCA has more than 100 catheterization labs across the country and the
one at Lawnwood was a financial juggernaut. It accounted for 35 percent
of the hospital’s net profits, according to financial documents.
In fact, one of the physicians from Lawnwood’s cardiac cath lab, Dr.
Prasad Chalasani, was highlighted by the hospital in a 2009 business
plan as being the most profitable doctor at the facility. “Our leading
EBDITA MD,” the plan described him. (Ebitda, or earnings before
interest, taxes, depreciation and amortization, is a measure of
corporate earnings.) Just a few months earlier, hospital executives had
received an outside review that characterized Dr. Chalasani as too quick
to perform catheterizations, often without first doing the stress tests
necessary to determine whether a patient needed the invasive and costly
test.
When reached by telephone, Dr. Chalasani defended his work, saying the
2008 findings were the result of poor documentation about what had
occurred before the patients received the catheterizations. “The tests
were done,” he said.
Dr. Chalasani emphasized that he was not paid by the hospital, and had
privileges at other hospitals. Since 2008, he said, doctors have
improved their documentation. Among the changes, he said, is the use of
forms requiring the doctors to indicate that they are following
established guidelines.
“To my knowledge, we have made tremendous progress,” he said.
The questions raised by the 2008 incident might have ended there if not
for Mr. Tomlinson’s 2010 letter to Alan R. Yuspeh, the head of HCA’s
ethics and compliance. HCA undertook another review of Lawnwood and some
of its other hospitals in Florida, including Kendall Regional Medical
Center, in Miami, and Palms West Hospital, near West Palm Beach. The
results showed that some patients without heart disease were receiving
questionable treatment, and HCA has responded by conducting still more
reviews.
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