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Editorial: Settlement points to the need for strong oversight

Officials of Catholic Health and the federal prosecutor who secured a $6 million settlement from the Buffalo hospital system hold radically different opinions about what happened there.

Hospital officials say they admitted no wrongdoing in a whistleblower lawsuit alleging false medical claims at three nursing homes and, in fact, say they delivered quality care to the patients involved. At the same time, Acting U.S. Attorney James P. Kennedy Jr. bluntly talked about “human greed” and his office’s “unwavering commitment to eradicating this cancer from our federal health care programs.”

Given that the matter involved three nursing homes, leaders there need to ensure that whatever incentivized that behavior has been wrung out of the system. The system’s services are too important to the community for this to become a local version of the Wells Fargo debacle.

The giant bank was found to have created millions of fake bank and credit card accounts as its sales staff struggled to meet what were called unrealistic goals. Shoes continue to drop in that scandal, but the relevant point is that even if no one was explicitly ordered to create the bogus accounts, at a minimum the corporate culture sent a message that it would be a good idea.

The question for leaders at Catholic Health, including the soon-to-retire President Joseph D. McDonald, is how three of its nursing homes all thought it would be a good idea to engage in conduct that resulted in the $6 million settlement. Were they somehow incentivized, even unintentionally?

Specifically, the federal government alleged that Catholic Health submitted false claims to Medicare, the federal health program for people 65 and older, and to Medicaid, the state-federal health program for the poor. The claims covered speech, occupational and physical therapy between 2007 and 2014 at Father Baker Manor, St. Francis in Williamsville and the McAuley Residence in Kenmore.

The claims involved patients referred from hospitals for short-term rehabilitation as well as long-term care residents. In addition, the complaint alleged the hospital system used software that automatically selected payments for services for more days than were provided, and used billing procedures that improperly increased payments.

In defending its policies while rejecting any claim of wrongdoing, Catholic Health said in a written statement that decisions about the necessity of care, after the fact, are subjective.

“We believe the care provided was appropriate and enabled our patients to return home sooner than if they had received less intense therapy,” Leonardo Sette-Camara, corporate compliance officer for Catholic Health, said in the statement. However, he said that the cost of defending against the allegations would be a poor use of the hospital’s resources.

If it is true that patients had better outcomes, that’s worth the time for the government to explore. But it’s also worth it for providers to report care accurately and honestly. That didn’t appear to happen in this case. For the community’s well-being, as well as Catholic Health’s, that has to change.

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