Hospital chain bills for high malnutrition rate

Redding, near Mount Shasta, and Victorville, in the Mojave Desert, have little in common but an unusual statistic: In each city, a hospital has reported alarming rates of a Third World nutritional disorder among its Medicare patients.

Kwashiorkor - a Ghanaian word for "weaning sickness" - almost exclusively afflicts impoverished children in developing countries, especially during famines, experts say.

But in 2009, Shasta Regional Medical Center in Redding reported that 16.1 percent of its Medicare patients 65 and older suffered from kwashiorkor, according to a California Watch analysis of state health data. That's about 70 times the state average of 0.23 percent.

At Desert Valley Hospital in Victorville (San Bernardino County), the kwashiorkor rate among Medicare patients also was high - 9.1 percent, or about 39 times the state average.

Both hospitals are owned by Prime Healthcare Services, a Southern California chain that specializes in turning around financially troubled hospitals. The chain is the target of state and federal investigations for allegedly overbilling the federal Medicare system by millions of dollars in connection with a reported outbreak of septicemia infections.

In interviews and e-mails, Prime officials said their billing practices are legal and proper, insisting that the kwashiorkor reports are accurate and a reflection of how seriously the company takes the problem of malnutrition among the elderly.

As with septicemia, a diagnosis of kwashiorkor on a Medicare patient's bill can entitle a hospital to a bonus from the government worth thousands of dollars, according to federal records.

Four experts in malnutrition and Medicare issues told California Watch they doubt there is a cluster of kwashiorkor cases at the hospitals. An investigation of individual patients' records could clarify what is going on, they said. Medicare officials wouldn't say whether they have reviewed the chain's malnutrition billing records.

The reported surge in kwashiorkor among senior citizens is a highlight of California Watch's computer analysis of 2009 Medicare billing data, the most recent available. The analysis found high rates of several forms of malnutrition at Prime hospitals - diagnoses that could open the door to larger Medicare payments.

Among the findings:

-- In 2009, Prime reported that 25 percent of its Medicare patients were malnourished, another medical complication that can entitle a hospital to a reimbursement bonus from the government. The state average for hospitalized seniors was 7.5 percent.

-- Of the 10 California hospitals that reported the highest malnutrition rates among Medicare patients, eight - including the top four - are owned by Prime.

-- The hospital with the highest malnutrition rate for seniors in California was Prime's Huntington Beach Hospital, which serves a city with a low poverty rate and average income of more than $100,000 per family. The hospital said 39 percent of its Medicare patients were malnourished.

Treatment bonuses

Statewide, 1.3 percent of Medicare patients were diagnosed with the types of severe malnutrition that pay the biggest treatment bonuses - nutritional wasting and severe protein calorie malnutrition, in addition to kwashiorkor. Prime's rate for the conditions was 10.1 percent.

In all, the Prime chain treated 3.6 percent of Medicare patients in California, records show. But 12 percent of the state's malnutrition cases - and 36 percent of all kwashiorkor cases - were reported at Prime hospitals.

California Watch reported in October that authorities are investigating Prime hospitals to determine whether a reported cluster of septicemia infections in 2008 reflect a health care problem or a fraudulent billing practice known as "upcoding."

It's an illegal practice by which hospitals overstate patients' diagnoses on billing records to obtain bonus payments that can amount to millions of dollars.

Like malnutrition and kwashiorkor, septicemia is among the medical complications that qualify for enhanced Medicare payments, according to federal records.

In e-mails, a company executive said Prime, which is based in Ontario (San Bernardino County), provides top-flight health care and deals honestly with Medicare.

"Prime Healthcare hospitals cannot, have not and will not engage in 'upcoding' or Medicare fraud," wrote Ajith Kumar, director of reimbursement management.