Redding, near Mount Shasta, and Victorville, in the Mojave Desert, have little in common but an unusual statistic: In each city, a hospital has reported alarming rates of a Third World nutritional disorder among its Medicare patients.

Kwashiorkor – a Ghanaian word for “weaning sickness” – almost exclusively afflicts impoverished children in developing countries, especially during famines, experts say.

But in 2009, Shasta Regional Medical Center in Redding reported that 16.1 percent of its Medicare patients 65 and older suffered from kwashiorkor, according to a California Watch analysis of state health data. That’s 70 times the state average of 0.2 percent. At Desert Valley Hospital in Victorville, the kwashiorkor rate among Medicare patients also was high: 9.1 percent, or about 39 times the state average.

Both hospitals are owned by Prime Healthcare Services, a Southern California chain that specializes in turning around financially troubled hospitals. The chain is the target of state and federal investigations for allegedly overbilling the federal Medicare system by millions of dollars in connection with a reported outbreak of septicemia infections.

In interviews and e-mails, Prime officials said their billing practices are legal and proper, and they insist the kwashiorkor reports are accurate, a reflection of how seriously the company takes the problem of malnutrition among the elderly.

As with septicemia, a diagnosis of kwashiorkor on a Medicare patient’s bill can entitle a hospital to a bonusfrom the government worth thousands of dollars, according to federal records.

Four experts in malnutrition and Medicare issues told California Watch they doubted there was an actual cluster of kwashiorkor cases at the hospitals. An investigation of individual patients’ records could clarify what is going on, they said. Medicare officials wouldn’t say whether they have reviewed the chain’s malnutrition billing records.

The reported surge in kwashiorkor among senior citizens is a highlight of California Watch’s computer analysis of 2009 Medicare billing data, the most recent available. The analysis found high rates of several forms of malnutrition at Prime hospitals – diagnoses that could open the door to larger Medicare payments. Among the findings:

  • In 2009, Prime reported that 25 percent of its Medicare patients were malnourished, another medical complication that can entitle a hospital to a reimbursement bonus from the government. The state average for hospitalized seniors was 7.5 percent.
  • Of the 10 California hospitals that reported the highest malnutrition rates among Medicare patients, eight – including the top four – are owned by Prime.
  • The hospital with the highest malnutrition rate for seniors in California was Prime’s Huntington Beach Hospital, which serves a city with a low poverty rate and average income of more than $100,000 per family. The hospital said 39 percent of its Medicare patients were malnourished.
  • Statewide, only 1.3 percent of Medicare patients were diagnosed with the types of severe malnutrition that pay the biggest treatment bonuses – nutritional wasting and severe protein calorie malnutrition, in addition to kwashiorkor. Prime’s rate for these conditions was 10.1 percent.
  • In all, the Prime chain treated 3.6 percent of Medicare patients in California, records show. But 12 percent of the state’s malnutrition cases – and 36 percent of all kwashiorkor cases – were reported at Prime hospitals.

As California Watch reported in October, authorities are investigating Prime hospitals to determine whether a reported cluster of septicemia infections in 2008 reflect a health care problem or a fraudulent billing practice called “upcoding.”

It’s an illegal practice by which hospitals overstate patients’ diagnoses on billing records to obtain bonus payments that can amount to millions of dollars.

Like malnutrition and kwashiorkor, septicemia is among the medical complications that qualify for enhanced Medicare payments, according to federal records.

In e-mails, a company executive said Ontario-based Prime provides top-flight health care and deals honestly with Medicare.

“Prime Healthcare hospitals cannot, have not and will not engage in ‘upcoding’ or Medicare fraud,” wrote Ajith Kumar, director of reimbursement management.

Citing internal data, he said Prime obtained enhanced payment from Medicare in only 3.6 percent of its malnutrition cases. At other times, the company put the rate at 3.1 percent. The billing data available to the public doesn’t flag the cases that received enhanced Medicare payments.

Kumar didn’t respond to questions about the chain’s overall malnutrition rate. But he contended that Prime is a leader in early diagnosis and treatment of malnutrition and suggested that other hospitals aren’t as diligent. The disparity in malnutrition rates “means there are patients going undiagnosed and untreated” at other hospitals, he said in an interview.

Kumar acknowledged that kwashiorkor typically is a Third World disorder. But he said Prime has followed accepted guidelines in identifying patients whose blood tests point to the disorder. An independent medical consulting firm called the Health Services Advisory Group agreed with Prime’s methods, he said. The group has not returned calls from California Watch for comment.

In e-mails, Kumar also complained that Prime was the victim of a “campaign of misinformation and extortion” engineered by the Service Employees International Union, which represents many Prime workers and has clashed with the company over pay and benefits.

Kumar contended that the septicemia investigations were launched last year because the union had provided regulators and lawmakers [PDF] with what he called a “faulty and misleading analysis” of Prime’s Medicare billings. The union was trying to leverage a new contract at its Centinela Hospital Medical Center in Los Angeles, Kumar asserted. Now, he charged, the union was trying to trump up another Medicare fraud probe, this time by complaining that the chain’s malnutrition claims were out of line.

Kwashiorkor reports puzzle experts

The union has provided authorities with a private statistical study of Medicare records that showed high malnutrition and kwashiorkor rates at Prime hospitals, a union spokesman said. California Watch obtained health data from the Office of Statewide Health Planning and Development and relied on its own statistical analysis for this report.

Medicare, the system of government health care for seniors, pays treatment bonuses under certain circumstances because caring for patients with multiple health problems is more expensive. A report by the federal Centers for Medicare & Medicaid Services gives an example of how the system works.

In 2008, hospitals received about $5,300 on average from Medicare for treating a stroke patient, the report says. But if the patient also was diagnosed with malnutrition or any of the hundreds of other ailments that Medicare classifies as a medical complication, the payout was about $6,100 – 15 percent more.

A bigger bonus is paid if a stroke patient is also suffering from kwashiorkor or other ailments that Medicare classifies as major complications. In that event, a hospital received, on average, about $8,000 – 50 percent more.

Last year, Prime reported treating more than 6,800 malnourished seniors, records show. More than 2,700 were diagnosed with severe forms of malnutrition, including kwashiorkor.

Kwashiorkor itself is a childhood protein deficiency often associated with “the premature abandonment of breast-feeding,” The Merck Manual medical dictionary says. It’s noted in regions of the developing world where staple foods are low in protein. News coverage of famine in Africa often features images of young kwashiorkor victims with the distended bellies that are a chief symptom of the disease. Other symptoms include swelling of the feet, loss of teeth and hair, and liver problems.

Directors of elder-care ombudsman programs in Shasta and San Bernardino counties said they were unaware of kwashiorkor in Redding and Victorville. Several experts said they were puzzled by the report of kwashiorkor among seniors.

“Traditional kwashiorkor is reserved for children in Third World countries that don’t get enough protein in their diet,” said Dr. Matthew Butteri, professor at UC Irvine’s medical school and an expert in geriatric medicine.

At the hospitals that are reporting high rates for the ailment, “there’s probably some individual who said, ‘Let’s start calling protein malnutrition among older adults kwashiorkor,’ ” he said.

“I personally don’t think of kwashiorkor in adults.”

Dr. David Reuben, chief of the geriatrics division at the David Geffen School of Medicine at UCLA, said he doubted that physicians were diagnosing kwashiorkor among seniors. Rather, he said it was likely that hospital personnel who translate doctors’ notes into billing codes were making the interpretation.

“What’s going on in the coding room there may require a deeper look,” Reuben said.

Other experts took issue with Prime’s overall malnutrition rates.

Diane Caradeuc, an educator for the nonprofit California Health Advocates and a former Medicare official who oversaw fraud cases, called Prime’s rates “suspect.” She said the reported malnutrition at Huntington Beach Hospital was “egregious,” given that the city’s poverty rate is low. Medicare should take a closer look at California Watch’s data, Caradeuc said.

Shannon Brownlee, acting director of the New America Foundation think tank’s Health Policy Program in Washington, D.C., questioned whether the surge of malnutrition reports at Prime was the result of “a clinical decision or a business decision,” as she put it.

“When you see such a big spike, you have to wonder what’s really going on,” she said.

Prime hospitals exceed state, regional averages 

California Watch’s analysis focused on Medicare patients age 65 and older at general hospitals that treated more than 500 patients in 2009. Convalescent hospitals were excluded, as were hospitals in the Kaiser Permanente managed-care chain because of differences in billing practices. In all, 254 California hospitals were included.

The analysis shows that Prime hospitals had higher rates for malnutrition among seniors than other hospitals nearby.

In Orange County, the malnutrition rate among seniors averaged 5.7 percent at the 14 hospitals not affiliated with the Prime chain.

But the rate at Prime’s four hospitals – Huntington Beach Hospital, West Anaheim Medical Center, La Palma Intercommunity Hospital and Garden Grove Hospital Medical Center averaged 26.2 percent. While Huntington Beach Hospital was reporting its 39 percent rate, the malnutrition rate at the nonprofit Hoag Memorial Hospital Presbyterian in Newport Beach, eight miles away, was 5.6 percent.

Los Angeles County’s four Prime hospitals – Centinela, Encino Hospital Medical Center, San Dimas Community Hospital and Sherman Oaks Hospital – had a combined malnutrition rate of 19.5 percent, while the rate at the county’s 69 general hospitals not owned by Prime was 7.7 percent.

In San Bernardino County, the malnutrition rates at 11 hospitals not operated by Prime averaged 7.1 percent; at three Prime hospitals it was 29.5 percent.

Differences also were evident when it came to kwashiorkor. Shasta Regional Medical Center in Redding reported 288 cases of kwashiorkor, a 16.1 percent rate. About one mile away at Mercy Medical Center Redding, Shasta County’s other big hospital, there were only 12 cases, a rate of 0.2 percent.

Mercy Medical Center dietitian Rita Steffen was surprised there were any kwashiorkor cases at all.

“I’ve not really seen that diagnosis here,” Steffen said. “Kwashiorkor is more of a protein malnutrition that you find in other countries – you know the pictures you see of African children with big bellies.”

In October, California Watch reported that state and federal authorities were investigating Prime’s rate of septicemia infections among seniors, which in 2008 was triple the national average. People familiar with the issue say the investigations are still underway.

The federal probe was requested by Democratic U.S. Reps. Henry A. Waxman and Pete Stark. The lawmakers said a computer analysis of Medicare records by the hospital workers’ union indicated that Prime might have overbilled Medicare by $18 million for septicemia claims in 2008.

Prime denied wrongdoing, saying its septicemia rates were high because of the chain’s emphasis on early detection and treatment of infections.

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Lance Williams is a former senior reporter for Reveal, focusing on money and politics. He has twice won journalism’s George Polk Award – for medical reporting while at The Center for Investigative Reporting, and for coverage of the BALCO sports steroid scandal while at the San Francisco Chronicle. With partner Mark Fainaru-Wada, Williams wrote the national bestseller “Game of Shadows: Barry Bonds, BALCO, and the Steroids Scandal that Rocked Professional Sports.” In 2006, the reporting duo was held in contempt of court and threatened with 18 months in federal prison for refusing to testify about their confidential sources on the BALCO investigation. The subpoenas were later withdrawn. Williams’ reporting also has been honored with the White House Correspondents’ Association’s Edgar A. Poe Award; the Gerald Loeb Award for financial reporting; and the Scripps Howard Foundation’s Award for Distinguished Service to the First Amendment. He graduated from Brown University and UC Berkeley. He also worked at the San Francisco Examiner, the Oakland Tribune and the Daily Review in Hayward, California.

Christina Jewett is a reporter for Reveal, covering labor and workplace issues with a focus on the workers' compensation system. With reporting partner Will Evans and CNN, she exposed widespread fraud and failed government oversight of California’s network of addiction treatment centers for the poor. The stories led to the defunding of more than 200 rehab clinics and changes in state law. The Emmy-nominated series won the 2013 broadcast award from Investigative Reporters and Editors. Jewett – as part of California Watch, a project of The Center for Investigative Reporting – won the 2011 George Polk Award for medical reporting with Lance Williams and Stephen K. Doig. The series exposed outsized rates of rare but lucrative medical conditions at a rapidly growing hospital chain and spurred a federal investigation. She was also a Livingston Award finalist in 2010. Previously, Jewett worked at ProPublica and The Sacramento Bee, where a story she broke about contracting malfeasance led to arrests and convictions. She and a colleague also chronicled jail abuse and medical mistreatment, spurring countywide policy reforms. Those stories were honored with awards from the John Jay College of Criminal Justice and the National Council on Crime and Delinquency. Jewett is based in Sacramento, California.

Stephen K. Doig is a California Watch contributor. At Arizona State University's Cronkite School of Journalism and Mass Communications Doig serves as the Knight Chair in Journalism specializing in computer-assisted reporting. The chair was created with a $1.5 million endowment given to the Cronkite School by the John S. and James L. Knight Foundation. Doig joined the Arizona State University faculty in 1996 after a 23-year career as a newspaper journalist, including 19 years at the Miami Herald. There, he served variously as research editor, pollster, science editor, columnist, federal courts reporter, state capital bureau chief, education reporter and aviation writer. Investigative projects on which he worked at the Miami Herald won several major journalism prizes, including the Pulitzer Prize for Public Service in 1993 for "What Went Wrong" an analysis of the damage patterns from Hurricane Andrew that showed how weakened building codes and poor construction practices contributed to the extent of the disaster.