Question

Midlands Hospital is a medium size private hospital in a small city in California. It has 100 beds and an emergency room (ER). The hospital participates in Medicare, Medi-Cal and has contracts with private insurers. Today was an unusually busy and troublesome day for its Administrator, James Edwards.

(1) No sooner than James settled down in his office, the Assistant Administrator John walked in and told him of a situation involving the ER. A 36 year old uninsured woman had arrived at the ER last night complaining of severe abdominal pain, nausea and vomiting. A physical examination revealed a tender abdomen but lab results did not indicate any abnormality. However an abdominal ultra sound suggested a gallbladder inflammation and gallstones (stones in the gallbladder). Following another extensive examination in the ER, the patient was diagnosed to have gallstones. She was discharged with the recommendation to go to Uplands Hospital for gallbladder surgery. Uplands is a nonprofit hospital run by a charitable organization. The patient had pains again the next morning and she went to Uplands where gallbladder surgery was done right away. Cost to Uplands hospital was $15,000. The Assistant Administrator said that ER Director was worried “whether we did things right” and “whether we will be fined by Medicare”. He continued, “I don’t think we should accept these uninsured patients. We should tell admissions not to accept uninsured patients. If we did that last night, the patient could have gone to Uplands and have the surgery last night itself.”

(2) As James was thinking about the ER situation, he got a call from Rita in Customer Relations. A patient who has been to the hospital several times was complaining that the hospital has sent a copy of her whole medical chart (that had information of the patient’s treatment at the hospital, during five previous occasions, over the last five years) to a health plan from whom the hospital was asking for payment for a single emergency room visit three weeks ago. A friend of the patient who works at this health plan has told the patient about this. James asked Rita to get the chart back from the health plan. Rita said, “I asked them last week. They said they already returned the chart by mail but we have not received it. I think it has got lost somewhere.”

(3) Even before James could answer Rita, the CEO came in with the Manager of the Admissions Office (Charles). A physician in the hospital medical staff, Dr. Simms, who admits some of his patients to Midlands, is opening a new medical office in a building adjacent to the hospital. Dr. Simms is asking the hospital whether the hospital can pay the rent for this office. In return, Dr. Simms will admit all his patients to Midlands. Charles confirmed that this would mean the hospital will get a lot of new admissions and revenue. James agreed to look into this. The CEO said, “We must do this. Dr. Simms’s father who is also a doctor is a major shareholder in the group that owns the hospital”.

(4) It was lunch time but James was not in a mood to have lunch because the CFO barged in saying “You know what that guy Sam in my department told me today? He told me that he has found several large bills we submitted to Medicare have errors amounting to thousands of dollars and that he thinks I should do something to stop this happening”. James asked, whether Sam has done a whistle-blowing, i.e., made a report to Medicare or Department of Justice. CFO said, “No, not yet but I want you to terminate him before that. Make up some other excuse like we are reorganizing. Anyway, as he has not done a whistle-blowing yet, he has no whistle-blower protection, right? ”. James asked the CFO whether the bills to Medicare were actually wrong and CFO said that they were. CFO also said, “I know I should have been checking these bills carefully. May be we can say that we didn’t know the billing rules well”. Last year, a consultant had advised the hospital to set up a formal Compliance Program but the hospital Board did not want James to “waste time and money setting up these unnecessary things”.
Suddenly, James remembers that one of his young staff members (YOU) had told him that this staff member (YOU) was taking a course in Health Care Law, Compliance and Ethics at CSULA. James calls you and asks you to advise him on his problems/issues. You tell him that you will identify the issues, find out relevant laws, do an analysis, and make conclusions, for each of James’ situations in written form.

Questions
1. Write your written answer to James on the ER related episode. If you see more than one issue in this situation, discuss them all in one answer but clearly in separate paragraphs under the question.

2. Write your written answer to James on the situation involving the patient’s medical records. If you see more than one issue in this situation, discuss them all in one answer but clearly in separate paragraphs under the question.

3. Write your written answer to James on the situation relating to Dr. Simms’ request. If you see more than one issue in this situation, discuss them all in one answer but clearly in separate paragraphs under the question.

4. Write your written answer to James on the Medicare claims situation. If you see more than one issue in this situation, discuss them all in one answer but clearly in separate paragraphs under the question.

5. Finally, focus on situation in 4 above only (The Medicare claims situation). Write a note to James on an ethical dilemma James may have to face, and how he can make an ethical decision, in that situation.

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1. No sooner than James settled down in his office, the Assistant Administrator John walked in and told him of a situation involving the ER. A 36 year old uninsured woman had arrived at the ER last night complaining of severe abdominal pain, nausea and vomiting. A physical examination revealed a tender abdomen but lab results did not indicate any abnormality. However an abdominal ultra sound suggested a gallbladder inflammation and gallstones (stones in the gallbladder). Following another extensive examination in the ER, the patient was diagnosed to have gallstones. She was discharged with the recommendation to go to Uplands Hospital for gallbladder surgery. Uplands is a nonprofit hospital run by a charitable organization. The patient had pains again the next morning and she went to Uplands where gallbladder surgery was done right away. Cost to Uplands hospital was $15,000. The Assistant Administrator said that ER Director was worried “whether we did things right” and “whether we will be fined by Medicare”. He continued, “I don’t think we should accept these uninsured patients. We should tell admissions not to accept uninsured patients. If we did that last night, the patient could have gone to Uplands and have the surgery last night itself.”...

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