Senate Seeks Probe of Another Tenet Hospital

Charles Grassley wants its Doctors Medical Center in Modesto, Calif., probed for Medicare fraud.
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hospital could soon be exposed to a crippling Medicare review.

Senate Finance Chairman Charles Grassley has formally requested that federal authorities investigate whether Tenet-owned Doctors Medical Center in Modesto, Calif., performed unnecessary heart procedures on patients insured by government programs. Grassley's request, made Friday to the Office of Inspector General, comes just one week after Blue Cross of California announced that two Tenet-owned hospitals -- Doctors Medical and Redding Medical Center -- had billed it for "numerous improper, medically unnecessary" heart bypasses.

OIG has already threatened to revoke crucial government funding for Tenet's embattled hospital in Redding, Calif., which this year paid a record-setting fine to end its exposure to further government penalties for unnecessary procedures. Grassley is now directing the same agency to investigate nearby Doctors Medical, following recent claims by Blue Cross that 59% of its patients who underwent heart bypasses there did so without reason.

The Blue Cross study -- carried out by independent health care experts at the Mayo Clinic, Stanford University and the University of Pennsylvania -- reported even higher rates of unnecessary bypasses at Tenet's hospital in Redding. But the giant insurer has, so far, taken no action against Redding, because the hospital has already shut down its cardiac unit. It did, however, announce plans to halt coverage for elective bypasses at Doctors Medical and perhaps even terminate its relationship with the hospital altogether.

"The numbers cited by

Blue Cross, if accurate, are truly shocking," Grassley wrote to the acting director of the Department of Health and Human Services, which oversees the OIG office. And "the unprecedented action taken by Blue Cross on behalf of its members appears, in and of itself, to be cause for alarm. In light of the Department of Justice's ... $54 million recovery against Tenet based on alleged unnecessary cardiac procedures and surgeries performed at Redding Medical Center, it strikes me as a matter of great urgency" that Doctors Medical be investigated as well.

In the meantime, Blue Cross is already warning its customers about the Tenet-owned hospital.

"The results of the study lead us to believe there are significant and serious health and safety concerns with

heart bypass procedures performed at this hospital," the big insurer announced. "Should Blue Cross's concerns with Doctors' Medical Center not be sufficiently addressed by Tenet, our contract will terminate on Nov. 30, 2003. ... In order to avoid substantial out-of-pocket charges, Blue Cross strongly encourages its members to use an alternate participating facility for their medical needs."

Peter Young, a business consultant at HealthCare Strategic Issues, expects yet another shoe to drop. Specifically, Young predicts that other insurers will soon follow Blue Cross's lead in reviewing surgeries performed at Tenet-owned hospitals and, in the process, delay payments to the struggling hospital chain.

"The statement of Blue Cross California speaks for itself and, based on current investigative actions, underscores what is increasingly appearing to be a company-wide scheme," Young said. "Of even greater concern to Tenet and its financial stakeholders should be the overall business decline that will result as consumers weigh the recent investigation information and actions taken by a reputable health insurance company."

For its part, Tenet has described the Blue Cross study as flawed and narrow while expressing outrage at the insurer's decision to go public with its findings before working with the company. Tenet has, in fact, threatened legal action against Blue Cross for its handling of the matter.

Young, for one, was not impressed.

"Tenet's letter to Blue Cross is yet another example of the brazen arrogance that has compromised the company," he said, and is "reflective of a corporate culture that has led the company to its current situation."

Tenet climbed 30 cents to $13.41 on Friday, ahead of next week's earnings report.