Monica Lam/California WatchJulie Schmitz (left) and her mother, Darlene Courtois, were interviewed by the FBI.
FBI agents interviewed a former Shasta County hospital patient Friday amid indications of a widening federal inquiry into Medicare billing practices at the Prime Healthcare Services hospital chain.
Darlene Courtois, 64, who was featured in a California Watch report last month about unusual Medicare billings at a Prime hospital in Redding, spent more than an hour with three federal agents, said her daughter, Julie Schmitz.
Schmitz said the agents asked questions about a 2010 hospital stay after which Prime had billed Medicare for treating Courtois for kwashiorkor, a dangerous form of malnutrition that afflicts children during African famines.
The agents also asked questions about an incident last month in which the hospital allegedly publicized Courtois’ medical records – without her permission – in an effort to refute the California Watch story, Schmitz said in a telephone interview.
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Medicare pays hefty bonuses to hospitals for treating complicated medical cases, and a diagnosis of kwashiorkor can boost a hospital’s payout by more than $6,000 per patient, records show.
As California Watch has reported, in the past two years, Prime’s Shasta Regional Medical Center has billed Medicare for more than 1,000 kwashiorkor cases – 70 times the statewide rate.
Among them was Courtois, a retired teacher’s aide who lives in rural Shingletown, west of Mount Lassen.
Courtois told the agents that she was hospitalized in 2010 for kidney failure, not kwashiorkor, her daughter said. She told the agents she received no treatment for kwashiorkor or any other kind of malnutrition during her 2010 hospitalization, by the daughter's account.
Schmitz said her mother disputed the hospital’s account that she had received diet counseling to treat her for a condition called protein malnutrition.
“No. They didn’t. Nobody has,” said Schmitz, who monitors her mother’s care and who participated in the FBI interview.
In an e-mail in response to a request for comment, a hospital spokesman wrote, "Shasta Regional Medical Center believes it has followed all state and federal laws and regulations. In abundance of caution, Shasta Regional has already notified all the proper agencies.”
In the past 18 months, three California congressmen have asked Medicare to investigate Prime for a suspected form of Medicare fraud called upcoding, in which a provider files false claims via computerized billing codes to reap enhanced reimbursement.
A California Watch analysis of state records shows that hospitals owned by the Ontario-based chain reported unusually high rates of several conditions that qualify for enhanced Medicare payouts. At the same time, former employees of Prime say that chain owner Dr. Prem Reddy has urged doctors and medical coders to log conditions that pay a premium when treating elderly Medicare patients.
Last month, California Watch reported that FBI agents had contacted two former employees of Prime's Alvarado Hospital Medical Center in San Diego to discuss billing practices. In an earlier interview with California Watch, the employees said that at a 2010 meeting, Reddy had urged physicians to document a disorder called autonomic nerve disorder in cases when patients fainted. Reporting the disorder would boost the hospital’s payout, by their account.
Prime has denied wrongdoing, saying its Medicare billings are legal and proper.
In their interview with the Shasta County patient, investigators also were focusing on patient confidentiality issues, said Schmitz, the patient’s daughter.
Last week, the Los Angeles Times reported that in December, two executives from the Redding hospital had taken Courtois’ medical file to the Redding Record Searchlight and showed its contents to the newspaper’s editor. The executives were urging the newspaper not to publish California Watch’s story on the case, the Times reported.
Medical records that Courtois obtained from the hospital and shared with California Watch supported her account of being treated for kidney failure, not severe malnutrition. But a Prime spokesman said that physician notes in the hospital's possession verified that the hospital had accurately billed Medicare.
Courtois told the FBI that she had never given the hospital permission to make her hospital files public, according to her daughter.
In its report, the Times quoted legal experts as saying that Prime likely had violated federal patient confidentiality laws. Violators can be fined and sentenced to prison.
In a statement issued Thursday, Prime contended that it was legally entitled to publicize the patient’s medical information because she had “voluntarily disclosed her medical records as part of an inflammatory news story by California Watch.” That meant Courtois had waived her privacy rights, the company said.
The statement also said Prime believed that disclosing Courtois’ records was “necessary to prevent or lessen a threat to the health and safety of the public.”
The statement did not elaborate on the nature of the threat to public safety or how releasing the patient’s medical files would address it.