The Audit That Might Have Been at the University of Louisville.

Last September, following a string of multimillion dollar embezzlements at the University of Louisville, and in the midst of ongoing concerns about the health and even the integrity of the its financial operations, the University retained Strothman and Company of Louisville for an independent outside audit. Strothman has relevant experience auditing large public institutions and has a member of the UofL Board of Trustees as a client. It is more than competent to perform an in-depth financial or management audit. The cover sheet for the Request for Proposal required that the auditors would, by March 31, 2014, perform:

• A special examination of the processes and procedures of internal audit,
• survey banking to identify UofL accounts,
• evaluate internal controls related to signature authority and vendor legitimacy,
• and examine the financial controls for faculty professional practice.

While this certainly was a reasonable business decision given the obvious system breakdowns and criticism from the community, I suspect the University felt compelled to offer at least some measure of accountability much as it did when it agreed to an audit of its handling of the QCCT fund for indigent care in early 2012. There is always some risk that an external review will turn up shortcomings, or worse. The QCCT review was not at all flattering and for whatever reason, that funding mechanism seems to be being phased out. A subsequent audit of the University’s involvement in Passport, the Medicaid managed care plan, revealed financial manipulations that were frankly illegal. High-ranking officers lost their jobs. A source of unrestricted money for the school dried up. In outside reviews of its academic affairs as evidenced by rejection of yet another application for a Phi Beta Kappa chapter, and placement of its entire Medical School and its Continuing Medical Education program on probation, UofL has not been faring very well either. Little wonder the University spends most of its promotional effort on its sports programs– Beer and Circus instead of Books and Brains. I suggest that identifying problems is not something to be afraid of. It is how the institution deals with unflattering appraisals or criticism that defines both its credibility and its strength. In my opinion, UofL’s reflexive posture of stonewalling the public is hurting it much more than revelation of its failings. This has to stop if the community is to gain the confidence needed for it to provide needed support. Continue reading

Medicare Payments to Oncologists in Kentucky.

Since my initial exploration of Medicare’s Physician Payment Database, I have not done much with it. The expectation that the information would be of great interest to many has been validated, and the utility and shortcomings of the data better understood. The potential is great that these data can be used to improve the quality, affordability, and availability of medical care. As might have been predicted however, a great deal of attention has been focused on identifying medical malfeasance and fraud.

I have always been of the opinion that examination of outliers in big data sets like this one is extremely valuable in health policy research. This is especially true in American medicine where there is such great variation both in the frequency in which various medical services are provided, and the amount of money charged. Looking at outliers does not automatically assume that something inappropriate is going on. A place or provider where a large number of things are being done may be a center of recognized excellence. On the other hand, and as we have seen in this series of articles, such “hotspots” of activity may represent inappropriate, abusive, or even illegal medical practice. I believe that large utilization data sets like this one beg us to ask questions about how to use our healthcare resources fairly, efficiently, and most of all effectively. A strategy I recommend is to start by looking more closely at the top 10 and the bottom 10 on any such list. Is that entry there for the best of reasons to be emulated, or for reasons of less value to be corrected? When you are done with the top ten, go on to the next, and so on.

Data is non judgmental, but is it easier to find the bad stuff?
With this as my working background, a series of reports about convictions and settlements related to two oncology practices caught my eye. One practice in Somerset was inappropriately buying non-FDA approved chemotherapy drugs manufactured in Third World countries and selling them here at inflated American prices. In a second practice in Elizabethtown, two physicians were markedly prolonging the duration of chemotherapy infusions in order to charge Medicare at a higher rate. The defensive rationale offered for this unique approach was in my opinion indefensible and I have not yet seen any other medical authority venture a different opinion. Presumably, these practices had been going on for some time, wasting money and exposing patients to harm. I wondered how the named providers in these settlements would have appeared in the 2012 Medicare Provider Payment Database. In fact were at or near the top end of all the charge and payment categories. Continue reading

Conflicts of Interest in Continuing Medical Education Yield Probation at UofL.

On May 2, 2014 Laura Ungar of the Courier-Journal reported that the Accreditation Council for Continuing Medical Education (ACCME) had placed the University of Louisville Program of Continuing Medical Education (CME) on probation. Given that UofL’s School of Medicine itself had just been placed on probation by other accreditors, this second failure of external review is yet another indicator that something is very wrong at our academic medical center.

UofL’s CME program oversees the integrity and scientific merit of postgraduate medical education offerings attended by medical students, interns, residents, faculty, community physicians, and other healthcare professionals. As a nationally accredited program, UofL also sponsors and certifies CME programs in other states, internationally, and on the Internet. Since the majority of CME is now paid for by pharmaceutical and medical device companies, the need for unbiased information is greater than ever. It is in this arena of avoiding commercial intrusion on its academic affairs that UofL stumbled.

What happened?
The specific event reported to have led to this action was the discovery that “a physician employed by a pharmaceutical company taught at one all-day course in Phoenix.” However, representing the University, Dr. W. Daniel Cogan, Assistant Dean for Continuing Medical Education and Professional Development would not name the drug company, the employee, or the partner organization sponsoring the untitled course. “Our program is clean except we had that one error,” he said. “It’s a high-quality CME program.”

The big Lebowski would not let this stand!
A refusal to disclose information that is already in the public domain was disappointing to me, but hardly a surprise given the University’s reflex instinct to avoid disclosure of information incompatible with its public relations spins. When will it learn that the enduring damage from bad news comes from attempts to avoid disclosure, or in covering-up? Refusal to disclose the details surrounding such a core failing of University responsibility drove me to make a Freedom of Information Request to UofL for relevant documents. It took a while and I did not get everything I asked for. Nonetheless, I am not comfortable with what I found, nor in the state of the national enterprise the provides the bulk of medical education to trainees and practicing physicians. In my opinion, the pharmaceutical, medical device, and related industries have captured the mechanism of continuing medical education and have done so with at least the cooperation of institutions of medical learning. Continue reading

Prohibition of Same-Sex Marriage in Kentucky Declared Unconstitutional.

The other shoe has fallen in a pair of court challenges from Louisville seeking to overturn Kentucky’s statute and constitutional amendment that prohibit same sex marriages or the recognition of the same as unconstitutional. The case began as Bourke v. Beshear demanding that Kentucky government and businesses apply law and regulation pertaining to marriage equally to legally married couples regardless of gender-mix. Judge John G. Heyburn, II found no fault with the Plaintiffs’ claim and ruled that Kentucky law’s on recognition of otherwise legal same-sex marriages to be unconstitutional. Kentucky’s Attorney General Jack Conway agreed and declined to appeal Judge Heyburn’s opinion which was ultimately stayed pending appeal and review by higher courts.

Seeking to rip out both vine and root, and ignoring the advice of other advocates who argued that the time was too soon to take on the basic issue of the prohibition of same-sex marriage in Kentucky proper, additional plaintiffs jointed the Bourke case which appropriately is now renamed Love v. Beshear. On July 1, 2014, Judge Heyburn found that Kentucky’s prohibition of in-state same sex marriages is unconstitutional under the equal protection clause. That order was also stayed pending expected review by the Federal Sixth Circuit Court of appeals in Cincinnati this August.

The finding.
IT IS HEREBY ORDERED THAT to the extent Ky. Rev. Stat. §§ 402.005 and .020(1)(d) and Section 233A of the Kentucky Constitution deny same-sex couples the right to marry in Kentucky, they violate the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution, and they are void and unenforceable. Continue reading

Catholic Health Initiatives Reports Increasing Financial Losses in Kentucky.

Last Thursday, Chris Otts of WDRB News may have been the first to report on Catholic Health Initiatives’ (CHI) most recent quarterly report to its creditors covering the 90 days ending March 31, 2014. Meant to be read in conjunction with last November’s audited annual report, the current unaudited update covers the first full year that CHI has controlled “substantially all of UMCs operations” at University of Louisville Hospital (ULH). The news report focused on the fact that KentuckyOne Health, the manager of CHI’s multiple hospital-related operations in Kentucky, had lost an additional $134 million on its “faith-based” hospital operations over that 90-day period. This stunning loss comes on the heels of an earlier report that KentuckyOne had lost $100 million in the six months ending December 31, 2013.

More than just financial data is provided.
The full report is in the public domain. My reading confirmed what was reported by others. However, I was struck more by other tidbits of information that confirm or add to our knowledge of what is happening behind the surgical drapes hung to to keep the rest of us from assessing the health of this hospital system of which a public asset is part. Continue reading

Patient Access Data at Veterans Hospital Medical Centers.

Mixed results at Robley Rex Hospital in Louisville but mostly better than average.

I recently commented about the reaction in Washington to revelations that veterans trying to get appointments at VA medical centers were facing long waits and that utilization data for at least a handful of centers had been altered to make them look better than they were. I was subsequently asked how our local Robley Rex VA Hospital in Louisville stacked up against others. While I have heard good things in support of the Louisville VA from veterans at public hearings, and while the hospital has done well in national accreditation and quality surveys, I had no specific information about waiting times. The release of national patient access data from the Veterans Administration in Washington gives us something to go on and will be presented below. In brief, our hospital has little to be ashamed of, but the data as presented are not easy for me to interpret.

One of the pitfalls in analysis of data-dumps like this one is that without knowledge of exactly what is being counted or measured, how items are defined, or the operational measures used to assemble the data; the robustness of any conclusions may be compromised. My lack of day-to-day working knowledge of how appointments are actually made at VA hospitals or how the various lists of waiting times were compiled for this report limits my confidence. Nonetheless, assuming the data from the various medical centers has been collected in the same way, an overview and some rough comparisons seem reasonable. Continue reading

University of Louisville vs. Norton Healthcare Spins Up Again in the Courts

I made a trip to Frankfort Circuit Court this morning in part to obtain additional documents related to this legal dispute, but chiefly to attend the hearing in Judge Wingate’s court that rekindles the court proceedings that were stayed last February in order to give the two parties a chance for mediation. As I recently reported, court-ordered mediation failed to produce a mutually agreeable result. Several sources confirm my understanding that after two mediation sessions, the parties were offered a chance to continue and that the University of Louisville unilaterally declined to do so. UofL has not responded to my private email or public request for confirmation or comment. I had a naive hope that the report of the mediator to the court would illuminate matters, but alas, the brief report tells us nothing more than that mediation failed. Nonetheless, we have additional publicly available court filings that give us a pretty good idea of the issues in dispute.

First-round action.
This morning, as anticipated, Norton’s attorneys entered their motion to lift the stay (which was accepted), their motion to dismiss UofL’s counterclaims (also apparently accepted), and to submit their First Amended Complaint to the court. UofL objected to this latter motion on the grounds that the amended complaint contained a motion to enforce an oral settlement that Norton– but not UofL– claims to have been reached.  Norton claims the the University blew up that agreement the next day by reintroducing poison pills that it knew would be deal-breakers. UofL claims the parties were still negotiating.  The argument in court today was that if in fact an enforceable agreement had been reached, all the other collateral issues would fade away and the litigation that might otherwise take 5 or 6 years would be simplified. The Judge tended to agree with this argument.

When all was said and done, the gist of it is that Judge Wingate allowed Norton to file its amended complaint as is but required that the parties focus their discovery and litigation over the next 60 days on whether or not Norton and the University did in fact reach the oral agreement identified in the complaint that Norton wants the court to enforce. Norton would have at that time the option to file a separate motion to enforce. Continue reading

Mediation between University of Louisville and Norton Healthcare Over Children’s Hospital Unsuccessful.

Breaking News. June 16, 6:20 pm.

It’s back to the mattresses.

It’s official. The court-ordered mediation between the two long-time partners over control of Norton-Kosair Children’s Hospital has broken down. Some additional details are becoming available but I do not yet have the independent report to the court by the mediator, Judge Bill Graham. Apparently only two mediation sessions were held on May 6, and June 4. It will be instructive and valuable to the community to learn what the barriers to compromise were and what the circumstances were that caused Judge Graham to report to the court that the mediation was unsuccessful. It is my understanding that UofL declined to continue the process. [As of June 18, The University has not responded to my email request for confirmation or comment.]

Some additional court documents are becoming available. The failure of mediation is apparently so definite, that Norton has petitioned the the court to lift its stay of Feb 14 to allow legal procedures to continue. I will analyze materials as I am able and will place links below to new documents as I obtain or receive them. Come back to see any additions and lend your insights in the comment section.

This is truly a shame.

Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
June 16, 2014

I am assembling and updating court and litigation documents below for the convenience of all. Click the “Continue Reading” button to access the material. Continue reading

Congress To Allow Veterans Access to Private Healthcare Providers?

The revelation that a Veterans Administration Hospital in Phoenix falsified its reporting of waiting times for veterans seeking medical care pushed a festering problem past its breaking point forcing Washington to wake up and take action. General Eric Shinseki, Secretary of Veterans Affairs and probably one of the most honest men in the city, ended up falling on his sword for his commander over the matter. On the theory that it is bad politics to appear soft on supporting our veterans, funding committees for the Veterans Administration that had been languishing in the hyper-polarized and consequently paralyzed Congress, sprang into life. Both the House and Senate have just passed versions of their own bills to address the wait-time issue and some attendant reforms. It is virtually certain some compromise will emerge soon.

The term scandal has been used with regard to the long wait-times. Certainly to the extent that quality and utilization data were falsified in order to look good on paper, scandal is too kind a word. Another kind of scandal is demanding that the VA system perform to a specified standard but withholding the resources required to do so. We see a lot of that in Washington.

Is it better in the private sector?
When it appeared that the VA system itself did not have sufficient capability to provide services to existing veterans, and that the location of clinics and hospitals does not always match up with the locations of the veterans themselves, a groundswell of suggestions arose proposing that if the VA cannot do it alone, let the private sector help! This is not intrinsically an unreasonable suggestion. The private sector is already helping with military retirees and families. There are certainly capabilities that the VA must have that the private sector is ill-suited to deal with, but most care provided in the VA system is nuts-and-bolts medicine that can be provided by the same providers used by nonveterans. Indeed, I have argued in these pages that better coordination or contracting with non-VA facilities can avoid community duplication and help assure that Veterans get at least as good care as the rest of us. It is only a short step to a system in which the government pays non-VA providers directly, at least for specific services or in places where the VA does not have resources available in a timely manner. (Of course, wait-times in the private sector are often very long too, especially for those without commercial insurance!) Continue reading

Struggle for Takeover of Louisville’s Children’s Hospital: Time for an Update?

It has been for four full months since the the Franklin Circuit Court Order requiring mediation of the dispute between Norton Healthcare and the University of Louisville over UofL’s demand for physical control of Children’s Hospital. Since then, no information has been made available to the public about the status of the mediation, or for that matter, even whether or not a mediator had been selected!

In the meantime, I am unaware of any thaw in the overall frigid relationship between the two institutions. In fact, with Kosair Charities (UofL’s new best-friend-forever) piling on to Norton with a lawsuit of its own over Children’s Hospital, things have gotten even more complicated and ugly. Commercial rivalry between the two downtown hospital organizations– Norton and KentuckyOne Health– continues unabated and is likely to get worse. KentuckyOne (which manages UofL’s hospital operations including its cardiac services and Neo-natal ICU) cannot be happy with the recent departure of some of its top interventional cardiologists to Norton. The pot is still being stirred. Whether or not KentuckyOne is currently a formal participant in the Children’s Hospital matter, it also has an immense stake in the outcome.

In his order of Feb 14, Judge Wingate suspended all deadlines for Norton’s underlying request for declaratory relief pending the results of mediation. In its last public filing in Franklin Circuit Court on February 3, Norton requested up to 30 days to identify a mediator and at least another 90 days to complete the mediation process.

I called Franklin Circuit Court today to see what public information was available. In fact, the last document on file for the case (13-CI-1060) is that of February 20 related to the court-ordered mediation. There is not even a formal notice that a mediator had been appointed or approved. There have been no further hearings and none are scheduled for the future.

In my opinion, now is as good a time as any for some sort of public accountability from the parties. Are they in fact engaged? Are they making progress and needing of more time, or has the process broken down as some have feared? Did it ever really have a chance?

Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
June 11, 2014

King’s Daughters Hospital Finalizes Angioplasty-Abuse Settlement.

The Verdict is In– Or Is It?

[See Addendum below.]

The agreement between King’s Daughters Medical Center and Hospital and various government investigatory and prosecutorial agencies to settle claims that the hospital submitted improper bills to Medicaid and Medicare has finally been signed. Not that we did not see it coming. A Kentucky record-setting amount of least $40.9 million now flows back into public coffers. Perhaps some of the money also goes into the pockets of a whistle-blower– I am waiting for the actual settlement text.

Has justice been done? If we believe the U.S. Attorney and the FBI agent on the case– surely!  Settlement language stated or implied that King’s Daughters “knew, deliberately ignored or recklessly disregarded the fact” that its cardiologists were putting things inside their patients’ hearts who did not need them; that some doctors were in effect being over-paid to submit their patients to what I have termed angioplasty abuse; that the hospital and its doctors were stealing money from patients and taxpayers; and that motivated by financial gain, public confidence in our healthcare system was threatened. Tough talk indeed.

On the other hand, the hospital admits no wrongdoing and in its statements gives me the [probably intended] impression that it is doing its community a favor by not squandering further valuable resources over allegations on “old cases.” I guess we are supposed to just let sleeping (or injured) dogs lie. The hospital points to external reviews that are said to confirm that it is meeting national standards in at least some aspects. [I have written much already of my growing lack of faith in some such hospital-rating organizations– at least the commercial ones that charge hospitals for the privilege of being evaluated or which charge the hospitals to use their ratings ratings in advertising!] Continue reading

It’s Official. Louisville Contribution to QCCT Indigent Care Fund Cut to $5 million.

Some Had Advance Warning

The Board that oversees the Quality Community Charitable Trust that helps support medical care to the indigent and medical needy was apparently given advance notice of this latest reduction in government contributions. From $7 million yearly (since at least FY2012-13) the amount has been reduced to $5 million, a 29% cut. Although the state used to contribute substantially more than the city, the two units of government contribute (at least for now) at essentially the same level. No explanation or justification for the reduction of the QCCT appears anywhere in the Metro budget. In fact, the single mention of the QCCT at all is in its line-item entry.

What lies ahead?
The handwriting on the wall is clear for this once-innovative program that cast University Hospital as the poor-people’s hospital of Louisville and made it easier for other hospitals to contribute less than their fair share. A combination of multiple changes in the QCCT partners, a crack-down by Medicaid on the methods used to finance the fund, and a scathing audit of oversight and management practices led the way. An increasingly difficult budget situation in both Frankfort and Louisville, and the anticipation that the Affordable Care Act (ACA) would reduce the amount of indigent and medically-needy care necessary provided either the coup de gras or the excuse for state and local governments to back further away from their commitment.

As I have argued many times in the past, this is not necessarily an undesirable result.  As long as our community demands that the healthcare system care for all comers to its doorstep, there must follow a corresponding expectation of community support to help pay for such services. Our community is no healthier than its sickest member, and whether it is paid for from private insurance, government funding, charity, or some provider’s other pocket– the risk of the few must be spread over the resources of the many. I believe however, that we need a different system locally (if not nationally) to share the assumed obligation. Continue reading