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At California Hospital, Red Flags and an FBI Raid
State Regulators Cited Concerns but Say They Couldn't Force Change

By Gilbert M. Gaul
Washington Post Staff Writer
Monday, July 25, 2005

REDDING, Calif. -- Don Frank, a California lumber salesman with broad shoulders and a modest demeanor, had no reason to question his doctor's diagnosis of a serious heart problem.

Feeling discomfort in his chest after exercising, Frank decided in the summer of 2002 to see Chae Moon, the chief cardiologist at Redding Medical Center. At 46, married with two sons, Frank was worried about his health. His father -- a former patient of Moon's -- had died of heart disease at 51.

Don Frank considered the chain-smoking Moon a personal friend. They were members of the same golf club and often exchanged pleasantries on the course.

Moon gave Frank an angiogram, an ultrasound and some bad news: He said he had spotted plaque in Frank's left descending artery. "He told me, 'If that breaks loose, you could be dead before you hit the floor,' " Frank recalled.

Frank was shocked but quickly scheduled surgery, taking comfort in Redding Medical Center's excellent reputation. The 238-bed hospital overlooking the Sacramento River boasted that it did more open-heart surgery and cardiac tests than teaching hospitals twice its size. Just that summer the Joint Commission on the Accreditation of Healthcare Organizations awarded Redding a grade of 94, among the highest in the country.

All of that quickly changed in October 2002, a few months after Frank's surgery, when FBI agents raided the hospital looking for evidence that doctors were performing unnecessary tests and heart surgery on healthy patients, including Frank.

It took a whistle-blower to alert the FBI about what turned out to be one of the nation's worst examples of overzealous medicine. But warning signs about Redding were in plain sight for years, documents show. That they were ignored goes a long way toward explaining the breakdown in oversight of the nation's health providers.

The FBI's raid spawned waves of allegations that are still playing out. A criminal investigation was opened. Hundreds of civil lawsuits were filed. Redding's owner, Tenet Healthcare Corp., agreed to pay the federal government $54 million to settle allegations of unnecessary care, without admitting wrongdoing, and to sell the hospital or risk having it barred from Medicare. The hospital is now called Shasta Regional Medical Center.

Still later, Tenet said it would pay $395 million to 769 patients who said they underwent unneeded cardiac procedures at Redding. Moon's cardiology group also settled with patients, paying $24 million to 345 plaintiffs.

Separately, Moon agreed to a suspension of his medical license. He declined through his lawyer to comment, citing the criminal inquiry.

For years, warning signs at Redding Medical Center were missed by regulators and accrediting organizations. In the mid-1990s, researchers at Dartmouth Medical School reported that Medicare patients in Redding were twice as likely to have open-heart surgery as patients in San Francisco and other California cities. By 2002, the year Frank had surgery, the rate had nearly tripled.

"At the time, we wondered what was going on in Redding," said John E. Wennberg, the chief Dartmouth researcher.

The Dartmouth data were readily available to Medicare officials; they came from agency files. But federal regulators rarely look at those numbers and don't use them to guide hospital inspections.

Medicare's rules for inspections are tightly prescribed, said Steven Chickering, an official in the San Francisco office of the Centers for Medicare and Medicaid Services. Even if he had been aware of the Dartmouth studies -- and Chickering said he was not -- a spike in open-heart surgeries alone would not have warranted a review. "Data in itself may have many meanings," Chickering said.

Most federal inspections of hospitals are prompted by a complaint from a patient. In July 1999, the California Department of Health Services, which is paid by Medicare to investigate complaints, sent a team to Redding to look into the death of one heart patient.

The team found that the medical staff refused to review medical charts, including those from seven cardiac patients who died in the previous two years, said Anthony Way, a physician with the state health department.

The hospital filed a plan of correction that August. The following October, Medicare ordered the state regulators back to Redding. This time they found that cardiac doctors were not submitting data for review to the hospital's quality-assurance committee. The hospital again promised to fix the problem.

But according to Way, within six months, "the principal cardiologist and cardiothoracic surgeon no longer participated in this monthly peer review because they were -- quote -- 'too busy.' "

Nonetheless, federal officials took no action. No more inspections were ordered until December 2002 -- two months after the FBI raid.

Chickering said the concerns raised by the state regulators in their 1999 surveys did not require additional actions. For one thing, he said, they did not document any injuries caused by bad care.

When state regulators returned to Redding in late 2002, "it was almost the same as three years ago," Way said. In one 11-month period, doctors had performed 3,240 cardiac catheterizations, a number comparable to a major teaching hospital, Way said. Only six had been reviewed.

State regulators said they did what they could. "It was up to [Medicare] to follow up," said Brenda G. Klutz, who oversees inspections for the California Department of Health Services. "We have no fining capacity for hospitals."

After the FBI raid, hundreds of patients came forward to accuse Redding Medical Center and some of its doctors of performing unneeded surgery. Frank initially resisted joining the lawsuits. But in 2003, plagued by doubts, he gathered up his medical records and took them to San Francisco to get an expert's opinion.

Andrew D. Michaels, an assistant professor of medicine at the University of California, showed Frank an angiogram of a patient with heart disease. Then he showed Frank the pictures taken by Moon of his artery.

"The difference was night and day. Mine looks like a pencil. The one with disease looks like cottage cheese," Frank said.

Michaels asked another cardiologist to review the images, without any knowledge of Frank's condition. He returned the same conclusion: "that this was a normal coronary angiogram," Michaels wrote in a summary on June 30, 2003.

Five other patients recounted similar stories. They said Moon or another doctor insisted they risked imminent death without open-heart surgery and got defensive if the diagnosis was questioned.

Today, Frank worries about practical matters. Will he be able to buy life insurance with what is now considered a preexisting condition? Does he face more surgery if the "repaired" artery clogs? Will the procedure shorten his life?

Looking back, Frank, now 48, remembers Moon as arrogant. "He told me I was fortunate to have him and no other cardiologist would be able to spot the problem," Frank said.

He has a hard time thinking Moon might have "put me in his sights because of money." Instead, Frank tells himself that Moon was incompetent.

"That allows me to kind of justify it in my own way," Frank said. "It is the only thing that allows me to carry on."

© 2005 The Washington Post Company