Navy Investigating Doctors’ Referrals for Heart Surgery

Navy investigators have launched an inquiry into allegations that doctors at the Navy Hospital in Balboa Park may have improperly favored a single group of civilian heart surgeons in parceling out referrals for such big-ticket operations as coronary artery bypass and heart valve replacement, The Times has learned.

At issue is the alleged exclusion of at least two groups of civilian heart surgeons in San Diego from the lucrative local Navy cardiac care referral business--worth more than $6 million in the 12 months that ended June 30, according to the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS).

CHAMPUS is a form of tax-supported health insurance that covers active-duty service personnel, dependents and retirees who need care that military hospitals cannot provide, either because of overcrowding or because they lack equipment and physicians to perform specialty procedures.

The Washington-based Naval Investigative Service is examining allegations that Navy doctors unfairly favored some civilian surgeons and prevented others from obtaining Navy referrals. The investigation was confirmed by Commodore James Sears, commander of the regional office of Naval Medical Command, and Capt. Harold Koenig, commanding officer of the Balboa Park naval hospital.

There have been no accusations of money kickbacks so far, but a Pentagon-based Navy investigation team is attempting to establish whether Navy doctors accepted favors or gratuities from civilian physicians who got Navy referral business, according to a civilian doctor familiar with the investigation. Among the charges under review is an allegation that at least one Navy doctor may have accepted a fishing holiday in Mexico from a civilian surgeon, according to that source.

Navy commanders and civilian physicians agreed that there are at least three surgical groups in the San Diego area qualified to perform a wide range of sophisticated heart operations. It could not immediately be confirmed which of the three was the target of the Navy investigation, but the inquiry apparently resulted from complaints by at least one of the allegedly excluded surgery groups.

In an interview, Sears and Koenig said they were not aware of any details of findings by investigators, but they said the probe had been launched recently and that it focused on possible improprieties in heart surgery referrals to civilian doctors. Civilian sources said the inquiry apparently began about two weeks ago. Koenig arrived at his current assignment just three months ago, and Sears took over his position in late June.

Koenig and Sears asserted that, while the investigators have disclosed no findings so far, growing competition for heart surgery patients in San Diego and across the country clearly makes the Navy an attractive target for any civilian surgical group seeking to maintain or expand its patient load.

“We are a tremendous source of business for (civilian heart surgeons),” Sears said. “I don’t think there is enough business” to go around in the civilian community.

“We may not have the corner on the market (in terms of available referral cases in the San Diego area), but we have a big chunk of it,” Koenig added. “ . . . There has got to be a finite number of cases out there for those guys to do.

“It is not surprising to me that people are making allegations and asking questions, and we have to go and make sure that it is not going on. I don’t know the answer. I’m not surprised at all, given those facts.”

A spokeswoman at CHAMPUS headquarters in Aurora, Colo., confirmed that heart case referrals to civilian physicians in the San Diego metropolitan area account for more than $6 million a year in business. She said CHAMPUS paid out a total of $47 million in referral fees of all types in the San Diego area during the year ending June 30, of which $5.8 million was for cardiology and vascular disease cases (a category that included many types of heart surgery) and $201,000 was for chest surgery in general.

The health plan said it was not possible to separate strictly surgical cases from the money total but, in most civilian settings, the costs of heart surgery and related quasi-surgical tests, called cardiac catheterizations, account for the majority of costs of cardiovascular medicine. The Navy could not immediately provide a total number of heart surgery referrals for the hospital, but civilian physicians familiar with the progress of the investigation said they understood that as many as several hundred referrals may be in question.

To seek care from a civilian doctor, a patient must obtain a document certifying that the care the patient needs is not available from the Navy. The patient is then theoretically free to select his own civilian physician. The inquiry now under way apparently is attempting to determine if Navy personnel, dependents and retirees may somehow have been channeled to certain heart surgeons, to the exclusion of others.

Sears and Koenig said that while they were not officially being kept abreast of the inquiry, the investigation underscores the growing competition among heart surgeons who are struggling to maintain their patient loads. In recent years, doubts have been cast on the effectiveness of coronary artery bypass surgery, along with other expensive procedures, and new federal government controls on fees paid for treatment of Medicare patients have put the squeeze on the incomes of heart surgeons in particular, because a disproportionate number of people needing cardiovascular operations are elderly.

At the same time that economic pressures have been mounting on civilian heart surgeons nationwide, Navy surgeons in San Diego have been trying to do more heart cases themselves, possibly reducing the number of potential referrals and sparking increased competition among civilian doctors for the remaining Navy referrals, Koenig said.

“We are doing more and more, and that may be part of the problem,” Koenig said. “The number of Navy cases they (civilian doctors) could get CHAMPUS reimbursement for is going down.”