Rural Minnesota Hospital Survives a Fight with the Feds

Cheryl Clark, for HealthLeaders Media , January 13, 2010

But for that agreement, says Tischer, "I would love to make all kinds of comments. But we're still under the watchful eye of government. We're under an agreement that says we will do what we're required, and what all facilities are required, in a document that allows the feds to come in and keep an eye through an Independent Review Organization."

A whistleblower, Steven P. Radjenovich, another Wheaton physician, received $203,150 in compensation as a reward for taking his concerns about overutilization to the feds. A follow-up audit revealed extensive problems.

According to the complaint obtained from the U.S. District Court for the District of Minnesota, the problem began when city-owned Wheaton Community Hospital wanted to build a "multimillion dollar addition."

At a public hearing on the plan held for the community in 2001, Gallagher "declared that the addition 'won't cost you a penny,'" according to the federal complaint.

Two years later, StratisHealth, the Centers for Medicare and Medicaid Services' Quality Improvement Organization (QIO) in Minnesota, reviewed Gallagher's patients and "found significant problems with the audited records, including a lack of documentation, a failure to provide proper care, and a lack of medical necessity," the complaint alleges.

"StratisHealth then notified Dr. Gallagher and Dawn Navratil, the QIO Liaison at Wheaton Community Hospital, of its findings," and informed then-CEO James Talley, according to the federal complaint.

"However, Wheaton Community Hospital took no action against Dr. Gallagher based on these complaints. Instead, the Mayor of the City of Wheaton, Janet Weick, asked StratisHealth to take no action to restrict Dr. Gallagher's practice because to do so would spell 'financial disaster' for the city," according to the complaint.

Officials allege that between Oct. 1, 1998 and Oct. 31, 2004, the hospital received "millions of dollars in reimbursement" for care of patients admitted by Gallagher, and that "certain of the claims . . . were false, in that the claims were made for in-patient care of Medicare beneficiaries which was not medically necessary."

Medical records of a random sample of 170 patients were pulled for review, and "a large number of Dr. Gallagher's admissions" were medically unnecessary, or were for an unnecessarily long period of time.

For example, an 85-year-old man was admitted for four days with poor appetite, back pain, and malaise, but no x-rays were taken and the patient was given oral pain medication and physical therapy. According to the complaint, "the admission was not necessary because it appears the admission was social in nature."

However, Tischer says that in rural communities like his "we rely on informal support structures, whether it be neighbors or others in the community. We have only one nursing home, and the beds are full. There's a larger philosophical discussion that needs to happen here," he adds, explaining that family members of those nursing home residents often live too far away.

"Where do we send the husband when his wife is barely able to care for herself, yet doesn't want to go to a nursing home and can't go to another community?"

Tischer says the accusations in the federal complaint, "we completely disagree with." But time passes. It's a new day.

In a statement last week, Tischer said that Wheaton has determined "that our time and effort was best spent providing quality health care to our patients and the medially underserved population surrounding us. We are committed to keeping our doors open to serve patients in need."

With all of the time and energy, not to mention the emotional drain of this health system nightmare, one would hope that someone in Wheaton learned something.

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