Expect intensified federal scrutiny.
That’s the word from analysts who follow the hospital industry to investors in publicly traded companies such as Tenet Healthcare Corp., owner of three Orange County facilities.
Reuters recently reported that investors can look for more scrutiny of billing practices and the medical justification for pricey treatments, as the government faces greater pressure to recoup billions in fraudulent claims.
Cardiology in particular is ripe for regulatory eyeballing, the news agency said.
It noted that stents and implantable defibrillators are expensive, while new research shows procedures involving medical devices may not be better than less-expensive drugs in many cases.
“The ongoing scrutiny of these procedures is just part of doing business in the cardiovascular area today,” analyst A.J. Rice of UBS told Reuters. “I do see more companies disclosing they’ve gotten inquiries from the government and more media attention.”
According to Reuters, Dallas-based Tenet, which has a regional office in Anaheim, recently said it has introduced systems to prevent unnecessary medical procedures.
Tenet owns Fountain Valley Regional Hospital Medical Center, Los Alamitos Medical Center and Placentia-Linda Hospital.
The company in 2003 agreed to pay a $54 million fine amid allegations that two doctors at one of its California hospitals performed unneeded heart procedures, Reuters said.
The issue of unneeded medical procedures flared up recently in the wake of a federal investigation of Nashville, Tenn.-based HCA Holdings Inc.—the largest for-profit hospital owner in the country.
The U.S. Justice Department, Reuters noted, has made identifying fraudulent medical claims and unnecessary treatment a higher priority in recent years.
That’s come because the country’s $2.6 trillion healthcare system contributes to a bulging national deficit—false claims to the Medicare plan are estimated to cost the government $60 billion a year, according to the news agency.
“That’s the environment we’re in. It’s just simply going to intensify,” Sheryl Skolnick, an analyst with Stamford, Conn.-based CRT Capital Group who follows Tenet, told Reuters.
“Fighting Medicare fraud is the only true bipartisan issue,” Skolnick said. “We’re going to have to get used to the fact that more people are going to be subpoenaed, but not everyone is a crook.”
Edwards Grant
The charitable arm of Irvine-based Edwards Lifesciences Corp.—known as Edwards Lifesciences Fund—has provided $1.2 million to start the American Heart Association’s heart valvular disease patient education center.
They are “enthusiastic” supporters of the association and its goal of developing the No. 1 “digital resource for valvular disease patients, their families and caregivers,” Chief Executive Michael Mussallem said in a press release.
The grant will be given over the next four years “to support the development of a comprehensive online portal offering support and education tools to those suffering from valvular diseases, their families, caregivers and healthcare providers,” according to a press release.
“As the prevalence of valvular disease grows and patients become more involved in their treatments, we need to ensure they have comprehensive resources to help them understand and pursue their path to a higher quality of life,” Mussallem said.
The American Heart Association said the first phase of the project’s patient education website will launch next April.
Device Added
Irvine device maker Breathe Technologies Inc. said the Department of Veterans Affairs has added the company’s non-invasive open ventilation device to the federal supply schedule.
Non-invasive open ventilation treats patients with later-stage chronic obstructive pulmonary disease, a combination of bronchitis and emphysema. Chronic obstructive pulmonary disease is fairly common among veterans, according to Breathe.
Breathe is working with Jordan Reses Supply Co. of Ann Arbor, Mich., to commercialize its device.
Jordan Reses is a specialty respiratory distributor for the VA system and has been on the federal supply schedule since 1992.
Breathe was established in 2005 and moved to Orange County from the Bay Area last year.
Its chief executive, Lawrence Mastrovich, is a former president of Lake Forest home healthcare provider Apria Healthcare Group Inc.
Bits and Pieces
Irvine-based MBK Senior Living Inc. said it will open a unit at its Huntington Terrace facility in Huntington Beach serving senior citizens who require specialized memory care and dementia programming. It has eight private and 10 semiprivate suites. MBK said the unit will start serving new residents on Oct. 1. … Auxilio Inc., a Mission Viejo-based company, said its research projects a savings to its customers of $70 million during the next five years. Auxilio helps hospitals and healthcare providers reduce their use of paper records.
