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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 ? Excerpt:

"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"? Ercerpt:

“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 requests for prior authorization. Persons in the home seldom object to such examination since they are not usually required to pay for such services."

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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. Excerpt:

"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 than 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 kn ledge of their subject. There is ays an at ding 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 activities 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 matter 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. 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.

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"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 diag. nosis. 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.”

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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. Ercerpt:

(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 re. quires 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 ?

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