A national health care chain that operates two hospitals in Lancaster County has come under fire after an investigative TV news program aired allegations that profits — and not patient care — motivated many of the company's decisions in the emergency room.

CBS correspondent Steve Kroft on "60 Minutes" Sunday charged Health Management Associates with running unnecessary tests and admitting patients without cause — all to drive up revenue.

Based in Naples, Fla., HMA is the nation's fourth-largest for-profit hospital chain. Locally, HMA operates Lancaster Regional Medical Center at 250 College Ave. and Heart of Lancaster Regional Medical Center in Lititz.

Danielle Gilmore, director of marketing for Lancaster Regional, declined to discuss the CBS report, instead sharing a statement issued by HMA's corporate office in Naples.

"According to their report, '60 Minutes' conducted more than a year of research and found no issues with the quality of care at Health Management hospitals," according to the release, which is attributed to HMA vice president of financial relations John C. Merriwether.

"It was also notable that '60 Minutes' failed to identify a single patient who had been inappropriately admitted from any of the company's emergency rooms, including by the physicians interviewed," it continues. "Neither '60 Minutes' nor the physicians interviewed identified any admission decision in which a physician's medical judgment was overridden by an HMA executive, much less to defraud Medicare."

Amanda Brunish, director of marketing for Heart of Lancaster, did not immediately return a request for comment Monday.

According to the "60 Minutes" report, HMA hospitals pressure doctors to admit patients by setting admission quotas.

Dr. Clifford Cloonan and Dr. Scott Rankin, two former employees of Carlisle Regional Medical Center, were among a handful of former HMA workers interviewed by Kroft, who said the company has a benchmark of 20 percent admissions for emergency room patients. Patients older than 65 have a 50 percent benchmark, they said.

"It has nothing to do with patient safety and patient care. It has everything to do with generating revenues," Rankin said in the report.

Doctors who fail to meet those quotas are penalized by hospital administrators, the report claims, and sometimes even fired.

All of the doctors who complained about HMA's admission practices had been fired by the company. HMA, in its statement, criticized CBS for relying "entirely on disgruntled former employees of the company and former contracted physicians, several of whom are seeking financial gain through active litigation with Health Management."

John M. Kristel, chief executive officer of Carlisle Regional, on Sunday denied the allegations.

"Physicians make decisions on health care, not administrators," he told told the Harrisburg Patriot-News. "The emergency room physicians work in collaboration with other physicians ... when to determine to admit patients. Administrators do not come into that decision."

HMA executive vice president Alan Levine said in the CBS report that admission rates at HMA hospitals are near or below industry averages. Levine also denied the use of quotas at any HMA facility.

The "60 Minutes" report took more than a year to complete, during which time the news team talked with "more than 100 current and former employees," Kroft said.

Nationally, Kroft said, an estimated $210 billion each year — about 10 percent of all health-care expenditures — goes toward unnecessary tests and treatments.

Much of that cost, he said, comes from taxpayers via Medicare and Medicaid payments.

HMA, Kroft continued, "owns 70 hospitals in 15 states. Its thrived buying small, struggling hospitals in non-urban areas, turning them into profit centers by filling empty beds."

The hospital chain is being investigated by the Justice Department, Kroft added, which has subpoenaed records pertaining to emergency-room management and a software program used by ER doctors.

Paul Meyers, HMA's former director of compliance and a 30-year FBI veteran, accused the chain of Medicare fraud.

The report had an immediate effect on investors. HMA shares fell 5.09 percent, down 40 cents to $7.55, in Monday morning trading on the New York Stock Exchange.

Late Monday afternoon, Dr. C. Richard Schott, president of the Pennsylvania Medical Society, issued a statement on the matter.

Although he noted he is "not in the position to comment on the validity" of the CBS report, Schott said "the best medical decisions are made when physicians, leading a team of health care providers, work closely with their patients without the presence of financial pressures.

"Physician employees must put the needs of patients far ahead of their or their employers' economic needs."
tknapp@lnpnews.com