published Monday, July 16th, 2012

Two major Tennessee-based hospital chains face bill probes

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LifePoint Hospitals operates 52 hospital campuses in 17 states. Its three facilities near Chattanooga are Southern Tennessee Medical Center in Winchester, Emerald-Hodgson Hospital in Sewanee and Athens Regional Medical Center.

Two major Tennessee-based hospital chains are facing probes of their billing practices, while a third settled some charges by paying nearly $1 million but still faces an ongoing inquiry.

The three area firms — Vanguard Health Systems, Community Health Systems and LifePoint Hospitals — are facing inquiries for facilities they operate outside the Nashville area.

Medicare advocates including the Medicare Rights Center say that the efforts by two federal agencies — the U.S. Justice Department and the Inspector General in the Department of Health and Human Services — are a good thing in that they save money and help root out fraud and waste, and because of a new law, they are likely to become more common.

"A lot of times they don't find anything," said Joe Baker, president of the group, "but when they do, it saves money."

Baker said the Affordable Care Act includes provisions that allow greater data sharing between federal agencies and encourage cooperative efforts.

In a series of recent filings with the Securities and Exchange Commission, Vanguard Health disclosed an ongoing probe of the use of implanted defibrillators on Medicare patients when it was "not medically indicated."

Suzanne Towry, spokeswoman for Vanguard Health, said Thursday the company will provide an update on the status of the probe when it files an annual earnings report with the SEC in mid-August.

In a filing in May, Vanguard disclosed that the Inspector General at Health and Human Services had subpoenaed records relating to the compensation paid to physicians by VHS Outpatient Clinics Inc.

The company, which operates 28 acute-care and specialty hospitals, acknowledged that an unfavorable outcome in that inquiry "could have a material adverse effect on the company's business, financial condition or results of operations."

Franklin-based Community Health Systems, meanwhile, is a defendant in a pending whistleblower suit in Indiana. In addition, CHS has acknowledged that the Inspector General in the Department of Health and Human Services subpoenaed records of its hospital in Shelbyville.

In the whistleblower suit, a federal judge on April 26 granted a second six-month extension for the federal government to decide whether it will join in the suit, which was filed by a former employee.

The judge, however, denied the government motion to move the case from Fort Wayne, Ind., to U.S. District Court in Nashville.

Community Health spokeswoman Tomi Galin said the latest information on the lawsuit and the federal inquiry were included in an April 27 filing with the SEC.

Both companies say they are cooperating in the ongoing investigations.

Brentwood-based LifePoint Hospitals agreed last year to pay $998,770 to settle charges that a Kentucky hospital it owns filed improper Medicare claims. LifePoint operates 50 community hospitals in 17 states.

While that probe has been settled, LifePoint has acknowledged in recent SEC filings that there is yet another ongoing Justice Department probe into billings for spinal procedures performed at one of its Alabama hospitals.

Officials of Vanderbilt University Medical Center have acknowledged an ongoing probe of billing for its intensive care units by the U.S. Justice Department and the Inspector General in the Department of Health and Human Services.

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