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State health officials launch probe into hospitals with high infection rates

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California health regulators are joining state and federal investigators in examining the practices of Prime Healthcare, a Southern California hospital chain with an unusually high rate of life-threatening infections, according to letters released to California Watch yesterday.

In the letter to lawmakers, California Department of Public Health authorities described extraordinary steps they plan to take to examine cases of septicemia in Prime hospitals, including reviews of individual patient records and hospital infection-control practices.

The heightened scrutiny comes as investigators with the California Department of Justice and U.S. Health and Human Services are looking into whether high rates of septicemia in some Prime hospitals represent a health care failure or a scheme to overbill Medicare by millions of dollars.

California Watch in partnership with the Los Angeles Times reported yesterday on the state and federal probes into the hospital chain.

A Service Employees International Union analysis of Medicare billing records [PDF] spurred much of the scrutiny. The union’s data shows that Prime Healthcare, which operates 13 hospitals statewide, is among the top hospital chains in the nation in its rate of septicemia, or bloodstream infections.

Federal lawmakers who reviewed the analysis called for a U.S. Health and Human Services inspector general investigation of the rates. For their part, California Department of Justice officials received independent reports on the matter that they began investigating.

Prime Healthcare executives said the union leveled the allegations in an attempt to "extort" concessions from a Prime hospital that is in contract negotiations. Prime authorities also say their septicemia billing rates reflect a pattern of early identification and treatment.

Prime's director of reimbursement management Ajith Kumar denied allegations of so-called "upcoding" infection cases to see increased reimbursement from Medicare. Rather, Kumar said the chain has a policy of detecting septicemia rapidly and treating the deadly condition aggressively.

State Sen. Elaine Alquist, D-San Jose, and Assemblyman William Monning, D-Santa Cruz, both health committee chairs, have called on public health authorities to explore the matter.

Alquist and Monning have asked the Department of Public Health to withhold any new hospital operating licenses to Prime until the matters are resolved. The SEIU also released a statement yesterday calling on authorities to deny operating licenses for Prime until the probes are completed.

In a letter to lawmakers, Department of Public Health deputy director Kathleen Billingsley made no mention of hospital licenses. Billingsley, a registered nurse, instead outlined details of how her agency will examine Prime hospitals. They include:

  • Working with Medi-Cal auditors who review Prime hospital billing for low-income patients. Medi-Cal auditors will identify septicemia cases and provide hospital inspectors "sufficient patient information to investigate the health records of patients diagnosed with septicemia."
  • The department will conduct new "patient safety licensing surveys" that look at infection control and hand hygiene programs. The surveys are based on laws passed since 2006 that add scrutiny to infection-control practices.

The letter says the public health authorities will "cite the hospitals for any substantiated violations reported" and that staff will "be researching all adverse events reported" by Prime facilities. The hospital inspectors will also communicate with the health care-associated infection staff about problems for "follow-up and intervention."

Public health authorities also said it plans to pass along all reports to the federal inspector general's office.


Alquist Letter Prime HC



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