Stanley Feld M.D.,FACP,MACE
Last week I had a post entitled “Medicare backed off maybe?” Medicare announced it was delaying changing the ineffective DRG system established in 1983, to a system that reimburses on hospital cost rather than charges. I said maybe they have back down. I have been to this movie before. They never seem to back down even if there are defects in the new system that can easily be corrected. The policy usually gets instituted using another route.
The front page Sunday New York Times had a story entitled “Hospitals Grew with Medicare Paying the Way” exposes the abuses of the DRG system by St. Barnabas Hospital System. There is naturally a lot of disinformation in the story. However, the abuse is the result of defects in the charges based on the old DRG system. I asked previously; ‘how the various hospital systems have so much money to build, redecorate and buy hospitals?” I suggested; “hospital systems might have a special deal with the government”. One could start connecting the points after this Sunday’s NY Times story. The CEO also made a salary of 4.7 million dollars in 2003. I guess good help is hard to find.
“In 1998, Mr. Del Mauro received $613,000 from SBC, according to documents on file with the I.R.S. His compensation was $4.7 million in 2003, the last year St. Barnabas received the huge Medicare overpayments. In 2004, it was $4.2 million.”
However, St Barnabas is not the only hospital system in the country involved in the federal investigations of abuse. Some might remember when HCA was called “Columbia Healthcare Systems”. Columbia was expanding rapidly and investigated by the Federal government for Medicare abuse. The result was a penalty and reorganization.
“The episode at St. Barnabas, whose legal problems are not over, is part of a wave of Medicare fraud investigations that, according to a federal report, have reached more than 450 hospitals nationwide. Experts said the money involved could exceed $6 billion. “
“The way the system has operated, it’s almost irresponsible corporate governance for hospitals not to cheat Medicare,” said Patrick Burns, an analyst at Taxpayers Against Fraud, a leading watchdog organization.
Isn’t it bizarre? A facilitator stakeholder (hospital systems) take advantage of a defect in the system the government created (DRGs). Then the government sues the organizations that take advantage of the defect in the system that they created at a huge cost to both the hospital systems and the government. Who do you think pays for the legal fees? You bet. We do (the people.) Who do you think is wrong? The answer is both the hospital and the government. Shouldn’t the government do it right the first time? Shouldn’t we demand that the government does it right the first time? Shouldn’t someone ask the practicing physician and the patient what they think the right thing to do is? You bet! Are they? No!