Friday, January 16, 2009

SouthernCare Settles

'Tis the season for settlements, it appears. The Birmingham (Alabama, USA) News reported,

SouthernCare is paying the federal government $24.7 million to settle claims that the Birmingham-based hospice company fraudulently enrolled elderly people in hospice and charged Medicare for services when the patients were not dying, according to the U.S. Department of Justice.

The lawsuits alleged that SouthernCare purposefully enrolled ineligible patients for hospice care, which is restricted to patients who have six months or less to live.

One of the whistle-blowers said a patient who had successful heart bypass surgery and yet stayed on hospice through SouthernCare for four years ultimately apologized for not dying.

[Whistle-blowers Tonja] Rice and [Nancy] Romeo said many of SouthernCare's patients didn't need or didn't get hospice care because they were not terminally ill, but the federal government was billed as though they were. Some patients were receiving aggressive curative treatment at the time from other doctors, and other patients barely needed home health care.

Rice said the company mined Birmingham-area nursing homes and doctors' offices for patients they could dupe. Romeo said employees risked losing their jobs if they didn't meet a quota of enrolling 21 patients each per month, no matter whether they qualified for hospice. At times, employees from outside Alabama came into the state to help 'slam' more patients into the program, the whistle-blowers said.

The whistle-blowers' lawyers said SouthernCare had a marketing strategy of going into churches and other places, telling patients they could get Medicare to pay for services not normally covered.

'A lot of these people, when they were approached, thought they were getting home health care,' said Stephen Heninger, Rice's attorney. 'They were just elderly and didn't need hospice.'

SouthernCare, founded in 1995, touts itself as one of the nation's largest hospice providers. The company said in a statement that it admitted no liability through the settlement and that the allegations did not involve the quality of the hospice care provided.

Well, here we go again. Yet another large US health care corporation pays a multi-million dollar settlement of charges alleging unethical, perhaps illegal business practices. The amount, although large, is not big enough to seriously impact the corporations's profits. Although the corporation pays money, the impact is apparently spread amongst stock-holders (here, private owners) and employees. The people responsible for directing the questionable activities are not identified, and apparently pay no penalty.

As we have said before, settlements like this just slightly add to the "cost of business," and are unlikely to deter bad behavior. Until the people who make the decisions that lead to the bad behavior face negative incentives, bad behavior is likely to continue.

Particularly worthy of challenge is the company's statement that this settlement had nothing to do with the quality of its care. If a corporation's leaders are willing to fool vulnerable, elderly patients about their Medicare coverage, why should we trust them to deliver pristine health care? If a corporation's leaders push their employees with recruitment quotas so ambitious as to require duping patients to fulfill them, why should we trust them not to otherwise intimidate and demoralize their employees, making the care they deliver all the more suspect?

Regrettably, the contempt with which many businesspeople who lead health care organizations treat patients, employees, and health care professionals alike explains much of what is wrong with health care today.

See related comments about for-profit hospices in this post by Maggie Mahar in the Health Beat blog.

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