Prime Healthcare's Jethro Tull Problem: Medicare Billing for Obscure Diagnoses

Hear that flute? See that wild-eyed man standing on one leg? The specter of Jethro Tull looms over stories about Prime Healthcare's Medicare billing.

California Watch, the Redding Record Searchlight and the Los Angeles Times all have slightly different versions of how Prime is using obscure medical diagnoses to earn extra money from Medicare. Then you have the arguments being made by executives at Prime Healthcare's Shasta Regional Medical Center, by patients and, behind the scenes, by the FBI and by Medicare itself.

Now about those flutes: I think this controversy can best be understood as part of what I call the Jethro Tull Problem.

In 1989, the Recording Academy introduced a new Grammy for heavy metal. Instead of giving it to Metallica, which was the odds-on favorite, the Academy's voters gave it to Jethro Tull, a band distinguished mainly by its heavy use of flute. Metalheads (including this one) were outraged. Many still are. It raised a host of questions, including: What did the term "heavy metal" really mean? Why was Jethro Tull competing in that category? And how were all those votes cast?

Prime's Medicare billing raise similar questions of definition and methodology. And, as with the 1989 Grammys, it may be difficult to assign blame.

Over the next two posts, I am going to break down Prime's (and Medicare's) Jethro Tull Problem.

What is kwashiorkor? The term was coined in Ghana because the disorder mainly afflicts very young children in Africa during a famine. Children typically develop distended bellies. Their hair changes color, often to red or blonde. It has been exceedingly rare in the United States, especially in adults. It's so unusual, that in 2010, researchers published a paper based on just one patient in Detroit. But Prime hospitals have an unusually high rate of billing for the disorder. Shasta Regional billed Medicare for more than 1,000 cases from 2009 to 2010. The hospital with the next highest number, Desert Valley Hospital, billed for 172 cases. Desert Valley is also owned by Prime.

What does Medicare think kwashiorkor is? Prime and Shasta Regional say that they have no choice but to bill Medicare for kwashiorkor when they find a protein deficiency in a patient. The fact that they get a higher rate of payment for kwashiorkor than for other disorders does not play into the decision, they say. Instead, they argue that they are more focused on ferreting out malnutrition in adults than other hospitals. They are so adamant about this that, without the consent of a patient, they showed a patient's medical records to Record Searchlight editor Silas Lyons, and, as he writes, they brought "in screen shots they said show the actual steps taken to arrive at a billing code for Medicare, and which lead from protein malnutrition to kwashiorkor."

Lyons was so convinced by this that he declined to run the California Watch story about an overweight patient shocked to find Shasta Regional had billed Medicare after "diagnosing" her with kwashiorkor. This was a surprising move on Lyons' part for a number of reasons. First, the Record Searchlight was one of the leaders in exposing billing fraud when Shasta Regional used to go by the name Redding Medical Center. Second, the paper had run previous California Watch stories about kwashiorkor billing. Third, PBS NewsHour was airing the story, meaning that people in Redding would see a local patient and a local hospital in the national news but not read about it in the local newspaper.

 In justifying his position, Lyons writes, "I'm far from an expert in Medicare billing, but presented with such clear documentation on the one hand, and with Medicare having declined to discuss the specific Shasta Regional coding process with California Watch on the other, I grew even more uncomfortable with the story's strong suggestion that a kwashiorkor code was plainly out of line."

Note that part of the decision making was based on Medicare's opacity. Lack of transparency can be infectious. There will be more on that in the next post.

Next: Was Prime forced by a byzantine billing system to make Medicare claims for kwashiorkor?

Photo credit: Brian Marks via Flickr