Comment-in addition to using the words 'effecting' and 'effect' when it is obvious that they meant to use 'affecting' and 'affect', and drawing on events that took place before the time of Medicare (the 1965 Long Term Care inquiry), the writers of this paragraph have lost themselves in polysyllabic hash that is as incompetent as it is irrelevant and immaterial. The true meaning of this paragraph is that the report itself documents the appalling ignorance and incompetency of the investigatory staff in stating conclusions on Medicare with reference to a congressional report prepared prior to the enactment of Medicare.

Excerpt:

"We concentrated our investigation of hospitals on the profit making variety. There have been no indications that the abuses we are studying are prevalent in public and non-profit institutions."

Comment-why do the investigators make this discriminatory statement; they must have discovered that administrative controls apply to all types.

If no investigation was made, how do they know that there is no indication of abuses in public and non-profit facilities.

Excerpt:

"These Medi-Cal abuses seem to be predominant in physician-owned hospitals. Since there are no significant differences in the patterns of abuse in nursing homes and hospitals, we will not offer extensive examples of hospital problems." Comment-Conjecture again. The investigators state that abuses seem to be more prevalent in one type of facility. This sort of statement is inadmissible in any court of law.

If there is 'no significant difference' in the patterns of abuse in nursing homes and hospitals, why, then, did the investigators choose to persecute the nursing homes? They have already established that hospitals are the bigger spenders, yet they make nursing homes the target of their unfounded accusations. This is rank discrimination.

Excerpt:

"Our comments on nursing homes clearly indicate the Medi-Cal problems which may be found in hospitals. An audit of just seven hospitals, for example, between March and August 1968, resulted in a recovery of $136,000 by Blue Cross."

Comment-this is a msleading statement; comments of the investigators have not clearly indicated anything; in saying that something 'may' be found is inadmissible; an audit of seven hospitals out of more than 600 is not conclusive.

Question: how can the study of one class of institution (nursing homes) lend to any conclusion, 'clearly' or not, about another class of institution (hospitals), or put another way, how can the study of oranges lead to a conclusion concerning apples?

Question: with reference to the audit result why does the report always draw the wrong conclusion? That is, if there has been overpayment the purpose of audit is for recovery of the money. Thus, if audit results in repayment the audit is working as intended.

Excerpt:

"One area in particular where this type of activity occurs relates to physicians submitting claims for having examined patients in nursing homes, although such examinations were not in fact performed."

Comment-why do the investigators insist on singularly pointing out nursing homes even when talking about an alleged abuse that has nothing to do with a nursing home? In this statement the investigator is talking about physicians, but drags in nursing homes to share the misleading accusation.

Excerpt:

"Due to problems which hamper investigative activities into fraudulent activities (discussed infra) the investigation was unable to determine the extent to which this type of conduct occurs."

Comment-the investigators, themselves, admit this is a poor report.

Excerpt:

"(b) The placement of persons in nursing homes whose physical condition does not require such extensive care is another form of overservicing."

Comment-the report should state that this is an abuse due to the actions of a physician rather than-again-implying that nursing homes are at fault.

Excerpt:

"In Los Angeles County alone during a one-year period of time some 1,300 persons were requested to leave nursing homes by county consultants because their physical condition no longer required such extensive care."

Comment-this indicates that the Medi-Cal consultant is functioning according to regulations-therefore, conclusion is entirely erroneous.

Excerpt:

"Many nursing homes have 'house physicians'. These are physicians who have an arrangement with nursing homes whereby they take care of the persons in the home. By having a 'captive audience' the physician is able to realize a significant amount of income regardless of the actual need of the individual resident.” Comment-once again, while delineating an accusation directed at physi cians, the investigators feel called upon to mention nursing homes. Had they investigated hospitals, which they admittedly did not, they might have found that doctors have even more direct relations with the acute care facilities through an organized medical staff.

The use of the word 'arrangement' in this context suggests something never defined in a straightforward manner; a sly type of aspersion.

The statement that many-how many is that-have house doctors is ridiculous and misleading.

Excerpt:

"For example, our investigation revealed incidents where physicians signed blank prescriptions which were given to them by the nursing home and which were subsequently completed by the home itself. In one instance, a physician thought he was signing a prescription for a drug when in fact it was filled in by a nursing home for a wheel chair for a patient who was ambulatory. In another case, 75 blank prescriptions signed by a doctor were found in a nursing home. Review of claims by consultants have also given rise to suspicion that it is the nursing home which prepares the forms describing the physical condition of persons who seek admission into the home. The 'house physicians' sign such forms although they, in fact, have not examined the patients."

Comment-the investigator fails to identify exactly who in the nursing home is the object of his criticism. He, instead, refers to the nursing home as if it was a living, active entity.

If it was determined that a doctor actually signed 75 blank prescription forms, he should have been prosecuted. Is it not the responsibility of the attorney general's office to enforce the laws. What has been done about this case other than talk about it and, again, calumniate the nursing homes by blaming them for the laxity of the legally responsible party.

Excerpt:

"One blatant example of unnecessary services in a physician-owned hospital concerns a patient who was hospitalized for sixteen days. Ten blood tests, many of them identical, were taken each day the patient was hospitalized. Of the 160 tests taken, not one revealed an abnormal finding. Multiple x-rays of the chest, skull and cervical spine were also taken although here again no abnormality was ever revealed. This type of overservicing was similarly provided to many other patients in this same hospital.”

Comment on one example the attorney general's investigator tries to build a case. Such a detailed statement justifies an equally detailed rebuttal.

Frequently, even the most extensive testing fails to reveal laboratory findings which are reactive or diagnostic. The patient may, neverthless, be critically ill upon clinical examination and presentation of symptoms. An attorney is not qualified to criticize the doctors' processes, for the doctor is trying to find out why the patient is ill. Even in these hyperscientific times, there are old and newly identified clinical disorders that can-and do-make a patient very ill and still defy a laboratory finding.

If the attorney general's office is going to be so presumptuous as to be critical of a physician's methodology, then any opinions should be supported with specific laboratory (investigative) reports that will lend credence to his clinical diagnosis.

Excerpt:

"(1) HCS publishes a drug formulary which contains instructions as to the manner in which pharmacies are to determine the cost of their drugs when billing the Medi-Cal Program."

Comment to determine the cost of drugs, it is suggested that pharmacies look at the appropriate invoice. This sort of statement again suggests the absolute lack of knowledge on the part of the investigators.

Excerpt:

"It is therefore highly unlikely that the practice of excessive billing ended with the enactment of the Medi-Cal Program."

Comment-the use of the expression "highly unlikely" is an editorial conclusion unsupported by fact.

Excerpt:

"(3) Visits to nursing homes, hospitals, sanitariums and homes of patients revealed that some pharmacies give patients a generic drug but bill the state as though the brand name drug had been dispensed. Under the formula for reimbursement the excessive expenditure made by Medi-Cal due to such false claims can amount to a significant amount of money.”

Comment during their nine months of investigation, did the attorney general's investigators determine the difference between nursing homes and sanitariums? They must have determined a significant difference that induced them to identify them individually. Actually, this is a matter of highly imprecise terminology, but, again, displays the lack of knowledge of the Attorney General's staff. Excerpt:

"(5) It is permissible in California for a pharmacist to fill a prescription which has been authorized by a physician over the telephone. Whenever a pharmacist gets a request from a person other than a physician for a prescription, it is the duty and responsibility of the pharmacist to contact the physician prior to issuing the drug."

Comment rather than erroneously condemning nursing homes, proprietary hospitals and doctors earlier in this report, why did not the investigators acknowledge this bit of fact on pages 11(6), 12(b), 16 and elsewhere?

Excerpt:

"(a) Some pharmacies needlessly dispense multiple prescriptions of the same drug to the same patient over a short period of time."

Comment all prescriptions are dispensed in accordance with a doctor's written orders. How does the attorney general's office determine this medical judgement? Actually, this statement "charges" the pharmacist for doing what the law requires of him.

Excerpt:

"This situation also occurs when nursing homes order prescription medicines." Comment-nursing homes do not order drugs—physicians are solely responsible

for this.

Excerpt:

"One pharmacy has even sent letters to nursing homes offering to give discounts for their business."

Comment in nine months of investigation, one culpable pharmacy was discovered, and the investigators feel they must ask nursing homes to share the blame.

Excerpt:

"Although the investigation could not determine the exact amount of money the state is spending due to abuses by pharmacies it is significant to note that an audit of only 39 stores was resulted in the recovery of approximately $132,000." Comment This is less than eight-tenths of one percent; hardly a valid sample. Yet the attorney general's office insists this is a complete investigation. Again, the wrong conclusion-if audit results in recovery that is what it's supposed to do. Excerpt:

"Even where authorization to perform work is denied, however, the dentists are still entitled to receive their fees for making routine examinations, although these examinations are not always requested nor needed."

Comment if this investigation was as thorough as we have been asked to believe, then the investigators should have discovered that oral hygiene exams are required by Medicare. Again, medical judgement by an attorney?

Excerpt:

66

".... to provide lenses and frames to patients in nursing homes."

Comment would the investigators have us believe that only nursing homes have patients requiring the attentions of optometrists? Did they ignore all other types of facilities in their eagerness to indict the long-term health care profession?

Excerpt:

"In one case, for example, an optometrist requested approval for a pair of expensive prescription sunglasses for a patient. Investigation disclosed that the patient was blind."

Comment had the investigation been a thorough one, it might have been discovered that a patient may be legally blind and still have enough vision to require care and protection. And-this is one case in how many?

Excerpt:

"Instances of fraud and overservicing, for example, could also be given for vendors such as hearing aid dealers, podiatrists and ambulance services."

Comment if the investigators do, indeed, have what they consider to be factual evidence involving these services, why are they not supplied. There was no hesitation in impugning the motives of other vendors with no supportable evidence in any considerable amount.

Excerpt:

"In some cases the abuses mentioned may be prevalent among a specific class of vendor. In other cases only a small percentage of the class of vendors involved may be engaging in a particular type of abuse."

Comment The investigators proceed to becloud their own issue by declining to identify which type of vendor they are maligning the most. The second sentence should be amplified as it is most inconsistent with the entire report. Excerpt:

"Most abuses are discovered in the course of the fiscal agents processing claims submitted for payment or consultants passing upon requests for prior authorization."

Comment being denied something does not constitute an abuse; it is exactly the opposite. The function of the fiscal agents and the county consultants is not understood by the Attorney General is the true meaning of this paragraph in the report.

Excerpt:

"Whatever their reason, the inability of investigators and consultants to obtain documents and other information presents a serious problem and is precluding effective investigation."

Comment-after admitting this, the investigators have the audacity to issue this "ineffective" report.

Excerpt:

"There has not been a clear understanding however as to which cases involve fraud and should therefore be referred to HCS."

Comment-in view of the reasonably well stated laws and regulations and the fact that the attorney general's staff is supposed to contain legal experts, this statement only adds to the obfuscation of the report.

Excerpt:

"Discovery of overservicing by hospitals or nursing homes, for example, may often give rise upon further inquiry by physicians, pharmacists and other vendors. Our investigation disclosed, however, that where abuses have been discovered by one fiscal agent which indicate that other vendors whose claims are reviewed by other fiscal agents should be investigated there has been a failure to adequately inform either HCS or the fiscal agent of potential investigations which might prove fruitful."

Comment-these 77 words constitute one of the most generalized, irresponsible statements ever contrived. It serves to characterize the entire report.

Excerpt:

"As one example, a recent audit by Blue Cross determined that one chain of eight nursing homes has received $380,000 from Medi-Cal."

Comment Another example of the confusion which exists in this document. The report implies that a payment of "in excess of $380,000 from Medi-Cal" to a chain of eight nursing homes is an abuse of the program. The period of time over which the amount was paid was not specified. Using this example, the following extrapolations can be made: The average size of nursing homes in California is 57 beds, so we may assume these eight nursing homes comprise 456 beds. We also know that approximately 65% of the nursing home beds in California are being "purchased" by the Medi-Cal program. Also giving the statewide occupancy figure of 90%, the approximate number of beds occupied by Medi-Cal patients is 266.76. If the period (not specified in the report) is one year, there would be a total of 97,367.4 Medi-Cal patient days. If one were to further assume a $10.00 per patient day rate for those facilities (maximum rate is $14.00), total payment to that chain would on this average basis be $973,674.00. Certainly, $380,000 is not excessive. This example illustrates how vague, confusing, poorly documented and unintelligible the report is. The report relies on implication and innuendo to make its points. However, since the entire report is so carelessly written, it may be that the report intended to say that on audit this chain of eight nursing homes was revealed to have received $380,000 more than it was entitled to under the program. If that is the case then the obvious conclusion is that the audit system is working, which does not seem to be understood by the Attorney General.

Excerpt:

"For example, nursing homes are not required to maintain records which would show the various services rendered to their patients. We have seen from this report that a major area of fraudulent billing concerns services provided to persons in nursing homes."

Comment-the statement made in the first sentence points out an appalling ignorance of existing laws and regulations on the part of the attorney general's staff. Such medical records are required by law and must be retained for a minimum of 7 years.

The second sentence is tantamount to libel of an entire industry; a statement based on erroneous conclusions, no evidence and pure guesswork. We demand a retraction from the attorney general's office. Furthermore, we demand an investigation by the legislature of what system in the Attorney General's office permits such untruthfully repugnant statements in a publicly released document. Excerpt:

"It is therefore suggested that consideration be given to the enactment of regulations which would specify the types of records that must be maintained by vendors and which requires them to retain such records for a reasonable period of time. One possible effect of such a regulation might be to expedite investigations by enabling investigators to examine documents in the possession of vendors thereby removing the delay now encountered when records must be obtained from the fiscal agents."

Comment-the first sentence again displays the incompetence of the attorney general's staff. There already is a law to this effect.

As for the second statement, these records are available if the investigators knew where to look.

Excerpt

"7. Review Procedure of Processing Claims

"Blue Shield employs some 350 persons to process 70,000 claims a day. Blue Cross employs approximately 70 persons to process 5,000 claims a day.

"The procedures used by these fiscal agents should be periodically reviewed to see if their system of processing claims can be expedited and the cost lowered." Comment if the attorney general's figures are correct, Blue Shield personnel must process claims at the rate of 200 per man-day; 25 each hour, or approximately 2 minutes per claim, and Blue Cross employees must adjudicate 710 claims each man-day; approximately 88 per hour, or one every 40 seconds.

One wonders if the attorney general's personnel, in suggesting that claims processing be expedited, are claiming to be office systems engineers.

Excerpt:

"a) In light of the large number of claims processed each day, the elimination of any one unnecessary step might result in a significant savings of money."