Thousands of Ill Medicare Patients Released Too Soon, Sen. Heinz Says

The Reagan Administration is allowing thousands of sick Medicare patients to be discharged from hospitals prematurely, the chairman of the Senate Aging Committee charged Thursday.

Federal investigators have found at least 3,500 cases in which sick persons were sent home or transferred without justification and the Administration has ignored their protests, Sen. John Heinz (R-Pa.) told a news conference.

At stake are “the lives of thousands of sick older Americans,” said Heinz, who contended that several of the Medicare patients who were released too soon have died. “Congress will not tolerate the kind of manipulative, misleading distortions of reality that we have been fed on this issue,” he said.

Dismissed as ‘Anecdotal’

But Carolyne K. Davis, head of the federal Health Care Financing Administration, contends that the quality of hospital care is high and has dismissed reports of problem cases as “anecdotal.” Neither Davis nor her boss, Health and Human Services Secretary Margaret M. Heckler, had any immediate response to Heinz’s charges.

These charges, and a newly opened inquiry by the Aging Committee, could be highly embarrassing for the Administration because Medicare is one of the government’s most politically popular programs. The senator’s remarks were strong criticism for a Republican Administration from a man who also holds a key GOP leadership post, chairman of the Senate Republican Campaign Committee.

Under Medicare, the federal health insurance program for persons 65 and older, a fixed scale of payments for each diagnosis and disease limits the amount of money a hospital can get for treating patients. Moreover, a hospital must absorb any financial loss if it spends more to treat a patient than the amount established under Medicare rules.

Strong Incentives

Thus, hospitals have strong incentives to move patients out quickly. And, as The Times reported last April, concern is growing among Medicare patients, members of their families and medical personnel that patients’ health may be jeopardized as hospitals rush to discharge them.

Heinz disclosed a widespread pattern of troublesome cases Thursday as he released documents showing that federal investigators had warned Davis that hospitals were abusing the payment system.

In addition to sending patients home too soon, some hospitals may be manipulating the system for financial benefits by transferring seriously ill patients from intensive care units to rehabilitation centers not subject to the strict cost controls, the senator said.

Hospitals engaged in such “inappropriate” practices should be denied payments by the government contractors that judge their performances, Richard Kusserow, inspector general for the Health and Human Services Department, recommended in a memorandum to Davis that was distributed at the news conference.

‘Evidence Is Mounting’

“We find that evidence is mounting to suggest abuse” of the federal payments system, Kusserow said in the October, 1984, memorandum.

Heinz also advised these financial watchdogs, known as peer review organizations, to take a tough approach by denying payments when patients are sent home too soon. Instead, the federal government “muzzles their bite,” he charged.

Among the documents Heinz released was a memorandum by Davis last January in which she said Medicare regulations would be revised to require the review organizations to deny payments to hospitals in cases of “medically inappropriate practices.” But the policies have not yet been changed, Heinz said.

“The bitter news,” Heinz said, is that the Health Care Financing Administration, under Davis’ direction, “has buried the truth on the magnitude of the problem.”

He cited the case of a 72-year-old man discharged three days after surgery to remove a bladder tumor. The man returned to the hospital emergency room the same day, complaining of abdominal pain, and was re-admitted. A Medicare claims reviewer wrote later: “This definitely looks like discharged too early . . . . What can we do?” according to a case summary made available Thursday.