High infection rates fuel federal probe of hospital chain

State and federal authorities are investigating a Southern California-based hospital chain for possible Medicare fraud involving an unusually high rate of blood poisoning incidents among older patients. The potential fraud, reports the Los Angeles Times, is worth roughly $18 million. 

At Prime Healthcare Services, the chain under investigation, rates for the blood infection septicemia stood at 16 percent--triple the national average--in 2008. At the same time, death rates across the 13 Prime hospitals from the infection reportedly were 38 percent below the national average, triggering accusations of inflated statistics for profit. The Times notes that Medicare gives more in reimbursement dollars to hospitals to treat septicemia than other hospital-acquired infections. 

Prime reimbursement management director Ajith Kumar denies the allegations, and chalks up the low death rates to "early detection and treatment." The higher rates of infection, Kumar maintains, are due to sicker patients being admitted from the emergency room. 

But the chain--and chairman Dr. Prem Reddy, in particular--already has a reputation for being aggressive when it comes to cutting costs and enhancing profits. When Prime took over Inglewood-based Centinela Hospital Medical Center in 2007, it soon after laid off 13 percent of its staff and cut some nurses' wages to a paltry $8 an hour, according to California Watch

For more information:
- read this Los Angeles Times article
- check out this California Watch post
- read these recent letters from state senator Elaine Alquist and assemblyman Bill Monning alleging upcoding
- read this letter to the HHS IG that outlines reasons for a federal probe against Prime