Malnutrition diagnoses at Kernan were fraud, feds say

It looked like a public health emergency. Hundreds of patients checking into Kernan Hospital were getting diagnosed with a severe form of malnutrition called kwashiorkor.

Taking its name from a Ghanian word, kwashiorkor is typically seen in children and is marked by swollen feet, a swollen stomach and skin ulcers. It's common in Africa and developing nations elsewhere but is hardly heard of in the United States.

But by 2008, according to records obtained from state regulators, the West Baltimore orthopedic hospital was diagnosing one in every eight patients with the disease that helps define famines in Somalia or Bangladesh. A few years earlier no Kernan patients were diagnosed with kwashiorkor.

"That's very odd," said Dr. Scot Silverstein, an expert in electronic patient records and an adjunct professor at Drexel University in Philadelphia. "For an orthopedic hospital? In Maryland? That's a disease that's typically a disease of foreign countries."

Perhaps the deteriorating economy was harming Marylanders a lot more than anybody suspected. Or perhaps the lucrative medical payment system was inducing Kernan employees and clinicians to report a disease that wasn't really there.

Last month the Justice Department accused Kernan of fraud, alleging in a civil complaint that it falsely labeled patients as kwashiorkor victims to inflate bills paid by government health programs and insurance companies.

If true, it's another commentary not only on health care abuse but on the country's flawed setup for paying doctors and hospitals. The system is so focused on treating sickness instead of keeping people healthy that it often finds — and charges for — illness that doesn't exist.

In a statement to reporters, the University of Maryland Medical System, which owns Kernan, said its own analysis reached a conclusion that was "substantially different" from the allegations of fraud made by U.S. Attorney Rod Rosenstein.

"There are a variety of reasons why patients at Kernan may be classified with malnutrition," system spokeswoman Mary Lynn Carver said in the statement, including low weight and nutritional problems indicated by blood tests.

Another reason, government attorneys said, was to rip off Medicare, Medicaid and health insurers. Kernan's patients typically need new hips, ligament repairs and so forth. But labeling patients as simultaneously suffering from kwashiorkor or other malnutrition increased the amount Kernan was able to bill.

Kwashiorkor is so rare I had trouble finding American experts to discuss it. The Centers for Disease Control and Prevention in Atlanta don't track it.

"One of our nutritionists is aware of a handful of cases in children whose parents are vegan and whose diets don't include animal protein," said CDC spokeswoman Kathryn Harben.

I wanted to interview Dr. Jaime Sepulveda, head of global health sciences at the University of California, San Francisco, and former head of Mexico's National Institutes of Health, about kwashiorkor.

"He said he didn't feel comfortable serving as an expert on it, since he's never seen a case in his life," a UCSF spokeswoman said.

But somehow Kernan experienced an apparent kwashiorkor outbreak starting in 2006, the only Maryland hospital to do so. Its cases of kwashiorkor as a secondary diagnosis grew a hundredfold, from three in 2005 to 358 in 2008, according to data from the state Health Services Cost Review Commission.

That was more than a third of all the diagnosed kwashiorkor cases statewide. At Kernan, 12.7 percent of all patients were diagnosed in 2008 with the rare ailment. At all Maryland hospitals, on the other hand, only 0.13 percent of that year's patients had kwashiorkor on their charts, according to the HSCRC data.

One Kernan patient diagnosed with kwashiorkor malnutrition was 5 foot 2 and weighed between 170 and 200 pounds, according to the federal complaint. Doctors told the patient to lose weight.

Thanks to inappropriate diagnosis of kwashiorkor and other malnutrition, Kernan fraudulently collected $1.6 million from federal health programs, according to the complaint filed Oct. 17 by Rosenstein's office. The government seeks more than $8 million in damages and recompense.

So-called "upcoding" like this has been going on as long as hospitals and doctors have been paid according to how sick patients are. Usually when auditors uncover diagnostic exaggeration there's a quiet settlement with the payers. Sometimes the abuses are large, as when Hospital Corp. of America paid hundreds of millions of dollars a few years ago to settle allegations of upcoding and other claims.

But the incidence of upcoding may be increasing.

"You might call it an institutionalized practice that is especially facilitated by electronic health records," which are used by more and more hospitals, said Drexel's Silverstein. The computer might prompt a clinician, he said: "If you just do this one little thing, you might generate a higher level of acuity" and more revenue.

When the upgrade is justified by patient symptoms, it's fine. But the government says Kernan crossed the line.

Expect to hear more about upcoding as long as the system makes more money from sickness — and fake sickness — than from wellness. When hospitals and doctors get paid to keep patients healthy, it might reduce disease and billing abuse at the same time.