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Doctors claim Prime hospital kept them from patients

Monica Lam/California Watch

A dozen Southern California doctors are accusing the leadership of a Prime Healthcare Services hospital of refusing to notify them about their patients because they won’t engage in profit-driven practices, according to a request for a restraining order filed this week.

The San Bernardino County physician group suing Chino Valley Medical Center and its director say it has been asked to needlessly admit patients from the emergency room into hospital beds, according to the lawsuit filed Wednesday in San Bernardino County Superior Court. The group’s doctors also have been urged to document patient conditions as more complex or severe than they are, the filing says.

The doctors suing the hospital maintain that both practices are meant to drive up hospital bills. The result of their refusal to go along, they say, is that they’re not receiving what they characterize as legally mandated notifications when their patients land in the hospital.

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The physicians have asked the judge to lift the alleged freeze in communication, saying it puts fragile patients in danger. A hearing is set for April 19 on the temporary restraining order.

Prime spokesman Edward Barrera released a statement Thursday saying Chino Valley expects to prevail and the lawsuit “has no merit and is a regurgitation of unproven allegations voiced by critics over the past three years.” 

The statement says Chino Valley routinely contacts primary care doctors when their patients come to the ER, and it calls the plaintiff doctors “upon request of patients themselves.” It also says Prime complies with state law and notifies health plans when their patients arrive in the ER and their medical conditions are stabilized. 

“Plaintiff’s lawsuit attempts to rewrite (the law) so as to require a hospital to contact a HMO and the HMO’s contracted physician,” Prime’s statement says. “There is no requirement to contact the HMO’s contracted physicians.”

California’s largest health plan is locked in a legal battle with Prime, accusing the hospital chain of shirking the same notification requirement. Kaiser Permanente has accused the hospital chain in Los Angeles County Superior Court of “trapping” Kaiser patients in Prime hospitals, failing to notify Kaiser doctors and upcoding patient diagnoses for profit. 

The suit by the Inland Pulmonary Medical Group marks the first time that a small group of doctors has stepped forward in court to criticize a Prime hospital’s practices. 

“It’s interfering with the care of the patient,” said Michael Amir, a Los Angeles attorney representing the doctors. “Patients go to the hospital – a lot of times they want to talk to the doctor who’s been treating them for years, and they’re being prevented from seeing their doctors, from doctors even knowing they’re in the ER.”

The seven physician plaintiffs in the Inland group say that together they’ve lost $150,000 in income as a result of Chino Valley’s actions. Five other area doctors filed declarations in support of the case but are not plaintiffs.

One of the supporters, Dr. Gerardo General, said his patients routinely are admitted to Chino Valley without his knowledge and given batteries of tests and drug prescriptions. 

“They go upstairs (into the hospital), and they expect to see my face. They don’t see me,” General said. “This is abuse; we can’t take it anymore.”

The lawsuit alleges that the communication cutoff endangers patients. It claims one patient with a serious breathing condition was admitted without her doctor’s knowledge. During her stay, Chino Valley staff operated to remove her gallbladder.

“Because (Inland) was not contacted, no doctor gave the required pulmonary clearance nor did the patient receive proper respiratory treatment prior to surgery,” the lawsuit says.

The suit alleges that such practices put patients “at serious risk of injury and even death.” 

A yearlong California Watch series documented high rates of lucrative and severe medical conditions at Prime hospitals, as well as an aggressive approach to admitting ER patients into hospitals, rather than treating them in the ER and sending them home.

State hospital data analyzed by California Watch showed that Prime hospitals admitted about 63 percent of Medicare-funded ER patients into hospitals in 2009, compared with 39 percent at the state’s other leading for-profit chain, Tenet Healthcare Corp. In response, Prime said the analysis “utterly fails to consider the medical basis for admissions.”

The U.S. Justice Department is investigating Prime’s billing practices, according to a document the chain filed as part of a hospital purchase plan. Dr. Prem Reddy, founder of the Ontario, Calif.-based chain, has overseen rapid growth since Prime’s 2001 start as the company expanded into a coast-to-coast 21-hospital chain.

Chino Valley was among the first hospitals the chain bought. It is bound by state laws that say hospitals must notify health plans to discuss post-emergency hospital care decisions for their patients. Federal regulations also say patients have the right to have their doctor “notified promptly of his or her admission to the hospital.” 

The physician group suing Chino Valley holds contracts with about a dozen managed care firms that expect group doctors to handle local members’ care in the case of a hospitalization.

The Inland doctors say that instead, they’ve been stonewalled. In their lawsuit, they say the silence is a result of their refusal to follow the direction of the hospital’s president and chief medical officer, Dr. James Lally, a defendant in the case.

Lally suggested that the physicians document serious medical conditions, such as a certain type of pneumonia that Medicare pays hospitals a premium to treat, the suit says.

Lally also discouraged doctors from putting patients on “observation” status, according to the suit. That means a doctor will monitor a patient’s condition, rather than sending him or her home or admitting the patient to a hospital bed. 

The lawsuit alleges that Lally prefers doctors to admit patients into the hospital so the hospital can receive “significantly higher Medicare reimbursements.”

Lally did not return a call for comment. Chino Emergency Medical Associates also is named in the case, accused of failing to call patients’ doctors. Dr. Val Warhaft, chief risk officer of Chino EMA, declined to comment.

Prime Healthcare has been criticized for aggressively admitting paying patients since its founding. Reddy once referred to an ER as a “gold mine,” according to court testimony from the medical director of the first hospital taken over by the Prime founder. The reference, which the medical director said during a 2005 trial, was to numerous Kaiser and Medicare patients who could be admitted for further care.

Another doctor told the Orange County Board of Supervisors in 2006 that when Prime took over Huntington Beach Hospital, doctors were urged to admit insured patients with maladies as minor as a headache.

Prime also has been accused previously of stonewalling managed care doctors.

In early 2012, a Kaiser physician testified before a California legislative hearing into Prime Healthcare’s practices. Dr. John Shohfi told lawmakers that after Prime took over a number of hospitals, they stopped contacting a 24-hour call center where Kaiser doctors coordinate care for members who land in out-of-network hospitals. 

He said the practice means doctors are treating patients with little knowledge of their medical history or prior and ongoing care.

In turn, lawmakers drafted a bill that would have limited the number of out-of-network patients a hospital can admit before health plans can pay the hospital lower rates.

Gov. Jerry Brown vetoed the bill in September, acknowledging the problem but saying he was not convinced that the rate setting prescribed in the bill “has it right.”

“Extraordinary hospital billings are harmful to the health care system as a whole, including patients,” the veto message said. “If found to be as widespread and as excessive as some claim, such practices will invite an appropriate regulatory response.”


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