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Ercerpt:

“The vast scope of the program precludes any precise estimate of the total amount of funds paid out due to poor administration ...

Comment—the attorney general admits it is a rather poor report based on a very inconclusive investigation. Ercerpt:

“Our investigation leads us to conclude . .

Comment conclusion only, unsupported by documentation. Ercerpt:

"In February 1967, Governor Reagan appointed a task force to review the administration of the Medi-Cal program. This committee recommended changes which would allegedly save Medi-Cal $90,000,000 annually."

Comment-not being a part of the findings of the investigation, this is obviously a politically inspired statement which seeks to discredit the administration which is of a different political party than the attorney general. Excerpt:

"The complex nature of Medi-Cal and the large number of participants both vendor and recipients of health care services-prohibited a thorough investigation by the Department of Justice . ..."

Comment-So, only a casual investigation was made. And, it was done without the help of the several interested professional associations that had volunteered help. Excerpt:

"... we recognize the problems confronted by Health Care Services in administering a program which was hastily conceived and implemented."

Comment--one of the few unquestionable statements in the report. Ercerpt:

“There is a lesson here for both the state and federal governments. The enactment of federal legislation which requires immediate response from the states to take advantage of federal funding is laden with peril, as well as with token prosperity. Unprepared and without sufficient analysis, the states are rushed into formulating programs which are both essential and ill-considered. There should be an effort by both federal and state governments to transform such programs into more meaningful and fruitful cooperative actions."

Comment-is it the place of the offce of the Attorney General to issue phil. osophical editorials?

It is here suggested that all governmental agencies should seek the help of professionals “to transform such programs into more meaningful and fruitful cooperative actions". Ercerpt:

“The investigation revealed that vendors are engaging in unlawful activities and are bilking the program. ..."

Comment-such condemnatory and inflamatory language is not necessary and is unbecoming the office of California's attorney general. The case should be stated in simple, straightforward terms without editorilizing or expressions of bias. Ercerpt:

“Vendors violate Medi-Cal regulations when they agree to give or accept kickbacks-money or other unearned consideration-in return...."

Comment-the report should have defined 'unearned considerations'. Ercerpt:

"In describing these abuses we recognize that they may in fact be engaged in by only a small number of providers."

Comment—this statement is not consistent with the many insinuations, accusations and allegations that appear throughout the report. Erccrpt:

"... the millions of dollars drained from the program by such activities merit their exposure to the public and. ..."

Comment—the function of the attorney general's office is not one of seeking publicity. Why such an effort at this time? Excerpt:

“There are approximately 1,000 nursing homes licensed by the State of California. ...

Comment–if this investigation had been as complete and thorough as the attorney general's office would have us believe, the investigators certainly would have discovered that there are approximately 1,160 homes licensed by the Department of Public Health and another 90 (approximately) licensed by the Department of Mental Hygiene. Ercerpt:

"The investigation revealed that nursing homes are engaging in numerous activities which violate the laws and regulations governing Medi-Cal."

Comment if this is more than an allegation, there should be some citations issued and prosecutions instigated. And-how many are described by the word 'numerous'. Excerpt:

"Medi-Cal beneficiaries in nursing homes receive $15 per month from the county for incidental expenses. In many homes this money is maintained by the nursing home on behalf of the beneficiary.

The investigation has disclosed that some nursing homes misappropriate expense money which they maintain on behalf of beneficiaries.”

Comment—the funds are retained—not maintained-for the patient by the nursing home administration which has posted a bond for handling such personal funds. Did investigators determine that there had been any claims filed against these bonds?

Also, just what quantities are indicated by such words as 'many' and ‘some'? Excerpt:

In one case, for example, it was found that a nursing home was in possession of some $2,000 which belonged to persons who either died or who were discharged from the homes."

Comment—is this the only case discovered by the investigation ?

One such case out of more than 1,250 possibilities is much above the record of any other profession in the matters of poor judgment, questionable practices or plain ignorance. Excerpt:

“(4) Another abuse which was found relates to the receipt of duplicate payments by nursing homes. This can occur in situations where the fiscal agent accidentally makes the duplicate payment or where the nursing home submits a duplicate payment hoping to be paid twice. In either situation the unethical vendor retains the duplicate payment without notifying the fiscal agent."

Comment-this passive statement is evidently based on conjecture and sur. mise. The investigator acknowledges the probability of an accidental happening. However, the report proceeds to damn an entire profession for one imagined happening. Ercerpt:

“We have already noted that HCS itself estimates that approximately 2.5 million dollars in overpayments have been made to all types of vendors."

Comment--admittedly, this is purely an estimate; no basis is supplied to ex. plain it. Although the amount of 2.5 million dollars is here identified as over. payment to all types of vendors, elsewhere in this report the amount is identified as overpayment to nursing homes alone. Ercerpt:

"Duplicate payments also occur where a nursing home has patients who are eligible to receive benefits from both Medi-Cal and Medicare. While Medi-Cal is only supposed to pay that amount which Medicare does not cover, the submission of duplicate claims under both welfare programs often results in the nursing home, for example receiving a duplicate payment of approximately $50,000 by billing in this manner.”

Comment-this just simply is not so. Again, how often is ‘often'? Was there only one nursing home that could be charged with "billing in this manner”? One out of how many? Was there proof of intent to defraud ? Ercerpt:

"Nursing homes may also receive payment in another manner. A home is re. imbursed by Medi-Cal for providing a service, yet it also bills and receives pay. ment for this same service from the patient or his relatives."

Comment—with shared liability (Group II), the nursing home must bill both the intermediary and the patient. The patient (family) is given official notice of shared payment.

Again, how many is indicated by the word "many"? Excerpt:

"The investigation revealed that it is common practice for nursing homes to...."

Comment–if it is common practice then can it be objectionable? (By definition, anything .common' is shared or approved by all; belongs or pertains to the public at large.)

Actually, this comment is made to show the bias in the Attorney General's office in using words to insinuate the scope of investigation was far greater than the report itself openly admits. Such a broadly sweeping charge and general allegation without any supporting evidence is reprehensible. Excerpt:

"..... it is common practice for vendors such as pharmacists, therapists, X-ray technicians and laboratory clinics to give kickbacks in order to obtain business from nursing homes."

Comment-such a broad, all-inclusive indictment should be supported by some documentation. Again, the investigator is careless with language by stating that (if true) the one thing he attempts to condemn is known and accepted by all. Excerpt:

“(6) Nursing homes often provide services to their residents which are greatly in excess of the services actually needed. Such overservicing is cause for dropping a nursing home from the Medi-Cal program."

Comment-all services of a nursing home are ordered by the patient's own physician. In this erroneous statement, the investigator should have explained how a nursing home can ‘overservice' a patient. Actually, this paragraph displays the appalling ignorance of the investigating staff in the basic relationship of the physician-patient-provider of service. Excerpt:

“(a) Our investigation indicated that some nursing homes order drugs far in excess of the quantities required by their residents. This situation can occur since physicians often prescribe continuous medication for persons in the homes and the homes determine when to order the medication."

Comment--during a nine-month investigation, the attorney general's representatives did not discover that nursing homes do not order drugs. This is done by the physician who also specifies the quantities required by the patient. A nursing home chart is a requisition--not a prescription. A pharmacist is legally and professionally required to verify and obtain prescriptions from the doctor. Excerpt:

“(b) Another method by which excessive services are provided is where nursing homes have arrangements with vendors such as physicians, dentists, optometrists, podiatrists, etc.,, which permit them to examine persons in the home whether or not their services are required or requested.”

Comment-all such services are ordered by the physician. This is an assertion without foundation. Excerpt:

"Indications of 'mass examinations' by such vendors have been observed by county consultants throughout the state in the course of their processing re. quests for prior authorization. Persons in the home seldom object to such examination since they are not usually required to pay for such services."

Comment—this is an attempt at a sweeping indictment against all 58 counties in California; which is patently ridiculous. If "county consultants throughout the state” observed all these things, why wasn't something done about it? The final sentence is both fatuous and absurd. The fact is all such "examinations" are ordered or appropved by the patient's attending physician. Excerpt:

"(c) Information has been obtained which indicates yet a third method by which excessive services are provided by nursing homes. This relates to the situation where a nursing home attempts to 'qualify' Medi-Cal patients for Medicare. Since nursing homes receive greater reimbursement for persons who are eligible for Medicare than they do for persons eligible for Medi-Cal it is to their benefit to have a patient classified as a Medicare patient.”

Comment—this statement again demonstrates the fact that the investigators did not have sufficient knowledge to qualify them for this study. The fact is that both Medi-Cal and Medicare are cost reimbursement programs. If the Attorney General in this paragraph is admitting that Medi-Cal reimbursement is less than the reasonable cost required by law then it is acceptable as such. However, a simple statement to this fact would be more appropriate than the round-about verbiage in the report. Ercerpt:

"A former administrator of a nursing home has alleged that some nursing homes have an arrangement with hospitals whereby Medi-Cal patients are transferred from the home to the hospital for a period of three days and then returned to the home."

Comment-the investigators strive mightily to make a point based on the allegations of a former administrator, hinting at an unspecified 'arrangement'. Among other things, one may wonder why their source is now a former administrator. The fact is that all transfers of a patient from a nursing home to a hospital are ordered or approved by the patient's attending physician (except in the possible case of an emergency). Excerpt:

"The nursing home benefits by this arrangement since it receives reimbursement at the greater rate from Medicare when the patient is returned to the home. The hospital benefits because it is reimbursed for providing services to the patient which usually include laboratory tests, x-rays, etc. (Under such an arrangement the nursing home or hospital usually has a physician who authorizes the patient to be hospitalized.)”

Comment—in stating that Medicare reimburses at a greater rate tban MediCal, are the investigators calling attention to the fact that Medi-Cal rates are less than reasonable cost?

In the parenthesized sentence, the investigators are again displaying a great lack of knowledge of their subject. There always an attending physician--not usually. Excerpt:

“This type of activity not only provides services to a patient which were not needed nor requested, but the question of 'eligibility' may determine whether a nursing home will accept a Medi-Cal patient into the home."

Comment-a patient does not request services; the doctor does. This statement makes an absurd assumption; that such an unlikely and illegal action is approved by the nursing home administrator, the hospital management, several doctors, a utilization review team, a medical staff (audit committee), and the fiscal intermediary. This is idiotic. Further, with reference to “eligibility” we assume that this is another reference to Medi-Cal reimbursement being less than reasonable cost. Veiled as it is we accept it as such. Excerpt:

"In addition to effecting services provided under Medi-Cal, the unlawful activi. ties of nursing homes also effect services provided under the federal program of Medicare. The activities described also result in a needless expenditure of funds under that program. Indeed, the scope of such unlawful activities was a mat. ter of inquiry before a congressional subcommittee on Long Term Care in 1965. Testimony given before this subcommittee indicated that many of the activities we have described concerning nursing homes are prevalent throughout the nation."

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. Ercerpt:

“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. Ercerpt:

“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. Ercerpt:

"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. Ercerpt:

"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. Ercerpt:

"(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.

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