Blue Valley Hospital offered employee discounts on weight-loss surgery and asked workers to falsify records to try to pump up its inpatient numbers enough to continue getting Medicare money, according to inspectors.
So far, it hasn't worked.
U.S. District Judge Julie Robinson this week dismissed Blue Valley Hospital's lawsuit against the agency that runs Medicare. Robinson wrote in her dismissal ruling that the court system can't intervene every time a hospital is dinged financially for not following Medicare rules and, given what inspectors found during an initial inspection in November and a followup in April, this is not a case that warrants intervention.
"BVH was tagged with numerous deficiencies in both surveys, including compromise of patient care," Robinson wrote. "As such, the government interest in protecting patients through an expeditious provider-termination procedure is quite strong.”
Blue Valley Hospital, a four-bed facility at 12850 Metcalf Ave. in Overland Park, is now set to lose its Medicare reimbursements starting Friday.
The hospital, which mostly does bariatric procedures, has said that could cripple it financially. Its lawyers filed a last-ditch appeal this week and asked that the reimbursements keep flowing until the appeal is heard.
"There has been no effect on existing patients and the hospital is still accepting new patients," Blue Valley Hospital attorney Curtis Tideman said via email. "Blue Valley Hospital is still very hopeful that this entire issue will be resolved quickly and appropriately."
Blue Valley Hospital filed suit after the Centers for Medicare and Medicaid Services pulled its certification. The agency cited an inspection that found the facility didn't treat enough patients and wasn't performing enough surgeries that require long stays to qualify for the higher Medicare reimbursements it had been receiving as an inpatient hospital.
Hospital officials have said that the loss of Medicare certification is due only to a technical change in the way federal rules are interpreted. They say the quality of care that patients receive is not an issue.
But Robinson wrote that inspectors found several patient care red flags when they made a followup survey after the lawsuit was filed.
"The re-survey found that BVH 'failed to use safe practices for medication administration,' " Robinson wrote, "and cited examples of failing to document or properly monitor medication administration, including medications that BVH routinely allowed patients to bring from home, leading to 'the potential for medication errors, drug overdose, adverse drug reactions, and ineffective medication management.' ”
Robinson also wrote that Blue Valley Hospital's leaders knew the facility wasn't following federal rules and took extraordinary measures to try to pump up its patient load and average length of stay to get in compliance.
During the followup survey in April, two nurses told inspectors they rebelled after they were asked to falsify records to include complications that would justify keeping patients longer.
The chairman of the hospital's board also told the inspectors the facility offered to absorb all out-of-pocket costs for employees and family members who medically qualified for a "gastric sleeve" surgery. According to inspection records, the chairman told inspectors it was something the staff had requested for years.
"Unfortunately, I have a lot of obese employees and they wanted this surgery," the records quoted the chairman as saying. "So it was something that could help us both. We have done about 50-60 employee/family surgeries to date with about 70 more that want it."
Robinson wrote that Blue Valley Hospital's lawyers called the followup inspection "a sham" but didn't provide any details to back that up.
Tideman didn't immediately respond to a request for comment on the followup inspection Thursday.
Blue Valley Hospital officials have said that the loss of Medicare money could force it to close.
Federal attorneys essentially said that's not the government's problem, writing in a court filing that it "is the risk BVH has assumed in basing its entire business model on government reimbursement."