State Panel Asks U.S. to Penalize Lax Doctors, Hospitals

Times Staff Writer

A California group with responsibility for reviewing the state's Medicare and Medicaid programs said Wednesday that it will ask the federal government to point a legal finger at--and fine--doctors and hospitals that give substandard medical care to the poor and elderly.

If the request is granted, California would be one of the first states to force medical facilities that provide inferior quality service to repay fees they received under the Medicare and Medicaid programs. Together, the two programs pay California doctors and hospitals more than $10.5 billion yearly, according to the Health Care Financing Administration.

"By imposing a monetary penalty, we hope to send a message throughout California to the physician and hospital community that they will be held accountable for their actions," said Jo Ellen H. Ross, executive director of California Medical Review Inc., a nonprofit San Francisco-based group paid by the Department of Health and Human Services to assess the quality of the Medicare and Medicaid programs.

Regulators won the ability to seek financial sanctions against doctors and hospitals under new federal rules that went into effect in May. So far, about 20 requests for sanctions have been received nationwide, said John Kittrell, spokesman for the Health Care Financing Administration, which oversees the Medicare program.

Financial Penalties

Ross said that the California Medical Review has sent a letter to the inspector general's office of the Department of Health and Human Services requesting that agency to impose financial sanctions in two cases of alleged substandard care. Those requests will automatically be granted in 120 days unless the agency acts to block the request. The fines for those two cases would amount to more than $30,000 in hospital and medical fees from the offending health care providers.

Ross would not disclose the specifics of the cases until the 120-day review period passes. However, she did acknowledge that one case involves a patient who allegedly died after doctors failed to give adequate care.

The new rules are likely to strengthen the regulatory zeal of so-called peer review organizations such as the California Medical Review, which has long been criticized for lacking teeth in punishing poor quality services of doctors and hospitals. Formed to reduce unnecessary hospitalization and improve quality of care, peer review organizations in the past have been less than aggressive, critics say.

In fact, between 1974 and 1984, under a more local peer review system in which 28 different medical review organizations performed the job of the one San Francisco group, only 11 doctors and hospitals were sanctioned, mostly by being suspended from participation in the Medicare program.

Revoke 26 Licenses

By contrast, the California Board of Medical Quality Assurance, a state agency that regulates the licensing of doctors, revoked the medical licenses of 26 physicians for various abuses in 1983 alone, the latest period for which figures are available.

"The system used to allow political pressure to intervene on behalf of bad doctors and hospitals," conceded David M. Bee, a Glendale physician who is a member of the board of the California Medical Review. "If a doctor had powerful enough friends, he could escape punishment."

But, bolstered by federal officials who recently have become as concerned about the quality of medical care as they have been about its high cost, California Medical Review's 280 employees have taken a more aggressive stance.

Ross said the California Medical Review currently has nearly two dozen other cases under study and expects to seek sanctions in about 100 cases by the end of 1986.

The increased focus on the quality of care is being welcomed by a medical community that has long argued that quality care is just as important as its cost.

"I'm delighted to have a little more balance since most of the focus has been on costs as far as the regulatory bodies are concerned," said Royce Diner, chairman and chief executive officer of American Medical International Inc., a Beverly Hills-based hospital chain. "All our hospitals have very well-defined quality assurance programs already."

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