Replies

http://www.app.com/apps/pbcs.dll/article?AID=/20060309/NEWS03/603090389/1007
UMDNJ faces allegations of overbilling Medicaid by $70M

http://www.newsday.com/news/local/wire/newjersey/ny-bc-nj--umdnj0308mar08,0,7402337.story?coll=ny-region-apnewjersey
Troubled medical school facing more scrutiny over bills

The embattled University of Medicine and Dentistry of New Jersey is facing scrutiny over new accusations of Medicaid billing problems, according to published reports.

The state medical school may have overbilled the government by as much as $70 million to $75 million, The Record of Bergen County and The Star-Ledger of Newark _ both citing unnamed sources _ reported in Wednesday's newspapers.

(snip)

Stern's first report is due to the U.S. attorney at the end of March.

http://www.nj.com/news/ledger/index.ssf?/base/news-5/11417984673130.xml&coll=1
Clues point to new fraud at UMDNJ
Executive suspended over alleged $70M in Medicaid double billing

(snip)

While auditors are still trying to determine the extent of the problem, the amount involved far exceeds the $4.9million in fraudulent billing outlined in a separate federal criminal complaint against UMDNJ in December.

The university -- charged with knowingly double-billing Medicaid for the same services as its physicians -- avoided prosecution by placing itself under the oversight of a federal monitor. The state institution remains under an ongoing criminal investigation into political influence peddling, no-bid contracts, and sweetheart deals to insiders.

The new billing problems were uncovered last week, as part of an examination of the annual cost reports submitted to the Centers for Medicare & Medicaid Services, according to two officials with direct knowledge of the investigation.

(snip)

http://www.freerepublic.com/focus/f-news/1563271/posts?page=23#23
Healthy People 2010

This initiative was stimulated by President Clinton's commitment to eliminate disparities in health for racial and ethnic minority populations by 2010.

http://www.nidcr.nih.gov/NR/rdonlyres/D2C8F49F-400E-467E-ACF2-6255D6E9FDEA/0/Nadrc0900.pdf
DHHS OFFICE OF HEALTH PROMOTION AND DISEASE PREVENTION
AND THE HEALTHY PEOPLE 2010 INITIATIVE

(major snip)

Dr. Randy Wykoff, Deputy Assistant Secretary for Health for Disease Prevention and Health Promotion, DHHS, presented an overview of Healthy People 2010, including the Leading Health Indicators, and possible ways to maximize this initiative. Healthy People 2010 is coordinated by the DHHS Office for Disease Prevention and Health Promotion.

Dr. Wykoff noted that Healthy People 2010 is a comprehensive set of national 10-year objectives that are developed through a collaborative process involving both the public and private sectors. All the objectives are specific and measurable over time based on data. The document, published and distributed by the Federal Government, also is a statistical description of the health status of Americans, including racial and ethnic disparities; a textbook on current public health priorities; and an important part of the national strategic plan for improving health. Healthy People 2010 is the third iteration of an effort that began in 1979 with publication of the Surgeon General's Report on Health Promotion and Disease Prevention. Ever larger and more complex, this iteration has two overarching goals, 28 focus areas, 467 objectives, and 10 leading health indicators.

(major snip)

Grant Review

The Council considered 327 applications requesting $70,492,343 in total costs. The Council recommended
238 applications for a total cost of $31,211,337 (see Attachment II).

UMDNJ is a publicly interest member of this initiative.

Members:

r. Hillary Brode, University of Medicine and Dentistry of New Jersey (UMDNJ)- New Jersey Dental School, Newark

Investigations so far:

* No-Bid Contracts, Often Resulting in No Documented Work -

"It is not just that university officials handed out contracts to politically connected people without any competitive bidding. What is more astonishing is how pervasive the practice was, with more than $700 million in no-bid contracts awarded over five years, and that it appears that some of the contractors did no perceptible work in exchange for their payments."

Example, Newark Star-Ledger noted that the school gave a $75,000 no-bid contract to Ronald White, a former top fund-raiser for former NJ Governor James E. McGeevey, but could provide no evidence he did any work for it: also, the school paid over $1 million over ten years to Chip Stapleton, a Republican consultant, to advise the university, but again the university cannot document that he did any work, either.

* Hiring Lobbyists to Influence the State Government, and Making Political Contributions -

"It is not just that the university hired influential lobbyists and consultants, ostensibly to promote its interests in Trenton - itself a rare step for a public university - but that it hired so many of them. The school, which receives more than $300 million a year from the state, went a step further in strengthening its political ties, giving campaign contributions to many elected officials, a nearly unheard-of practice whose legality has been questioned by some legislators."

Example, the Star-Ledger noted that the school gave a $10,000 campaign contribution to a "breast cancer group" linked to Newark Councilwoman Gayle Chaneyfield-Jenkins.

* Allowing Political Bosses to Make Decisions -

"It is not just that university posts were handed to people with powerful political connections and potential conflicts of interest - though the extent of that practice was impressive. University officials and politicians alike say that political bosses actually dictated to the university who received what jobs, and who was shoved aside."

Example, "Stephen N. Adubato Sr., a Newark power broker and president of the North Ward Educational and Cultural Center, has publicly taken credit for the ouster of Harvey Holzberg as university chairman. Stanley S. Bergen Jr., a former president of the university, and several other people tied to the institution and to state government, say that Mr. Adubato engineered the appointment of Mr. Petillo as chairman and then president - something that Mr. Adubato now vigorously denies. Last November, Mr. Petillo awarded a $95,000 no-bid contract to an organization run by Mr. Adubato."

* Health Care Organizations Seem to Operate with Little Oversight or Accountability -

"But lawmakers, watchdog groups and political scientists say the causes boil down to two basic factors: a relative lack of scrutiny at the university, and the unique political structure and culture of New Jersey."

* The Anechoic Effect -

"If people within government are not watching the doings of state agencies closely enough, the same may be true of those outside government." Furthermore, "But the newspapers in New York City and Philadelphia that are read by so many people in New Jersey have focused on the issue only occasionally, and the out-of-state television stations that dominate the state's airwaves have paid even less attention. And there may lie a reason the university long escaped scrutiny for practices that, in some cases, date back at least a decade."

* University under investigation by the US Federal Bureau of Investigation (FBI)

Newark Star-Ledger described how a burglar made away with a variety of records, but almost no cash, and little of pecuniary value, from a UNDMJ administration building. This burglary occurred days after a memo from a UMDNJ staff lawyer asking employees to secure all documents and destroy none of them. The initial story said that the records included documents subpoenaed by the FBI, and personnel records probably also related to the investigation, according to an additional report. The President of UMDNJ, John Petillo, even said that to him "it looks like it may very well have been an inside job." After the burglary, the FBI stepped up their investigation, interviewing several UMDNJ employees in pre-dawn visits.

* The Black Bag... -

Confusion about what documents were actually taken from UMDNJ, another Star-Ledger article included a statement by UMDNJ officials that "no documents requested of UMDNJ by any outstanding subpoena are missing due to the break-in." Yet, according to the Star Ledger, "stolen personnel records could factor into the federal probe."

A Star-Ledger editorial noted, "at least two definitions come to mind when considering the term 'black bag.' First, there's a doctor's medical bag. Then there's the slang meaning a secret, illegal break-in, usually by a government agency. Now, thanks to the latest jaw-dropping incident at New Jersey's University of Medicine and Dentistry, there's no need to make the distinction between the two."

>>>>"The rules of the game in this place have changed, and they haven't been changed by us," he said. "Even though the state is our lifeblood, we cannot, as a matter now of law, engage in some of the kinds of behaviors that have existed in the past. Some of the kinds of things that have (been) reported -- that may have become standard operating procedure in the past -- we cannot do anymore."<<<

At UMDNJ "The Rules of the Game Have Changed"

As auditors continue to investigate the finances of the University of Medicine and Dentistry of New Jersey (UMDNJ), new problems continue to surface.

We have posted extensively at the troubles at UMDNJ, which now is operating under a federal deferred prosecution agreement with the supervision of a federal monitor (most recently here).

The indefatigable reporters at the Newark Star-Ledger have revealed yet another problem, possiblly massive over-billing by UMDNJ of Medicare. " While auditors are still trying to determine the extent of the problem, the amount involved far exceeds the $4.9million in fraudulent billing outlined in a separate federal criminal complaint against UMDNJ in December." " The new billing problems were uncovered last week, as part of an examination of the annual cost reports submitted to the Centers for Medicare & Medicaid Services, according to two officials with direct knowledge of the investigation." "At issue were costs associated with the university's mental health division, University Behavioral HealthCare, and whether UMDNJ-University Hospital padded those costs with its own administrative expenses. If the federal cost reports were inflated, the hospital would be reimbursed at a higher rate than it is legally entitled to receive. The sources said the hospital may have submitted reports that funneled an additional $50million to $70million in unwarranted reimbursements."

Meanwhile, the Dean of one of UMDNJ's two medical schools, Dr Harold Paz, has resigned. His new job will be Senior Vice President for Health Affairs, Dean of the Medical School, and CEO of Hershey Medical Center at Pennsylvania State University. Thus both of UMDNJ's medical schools for the moment will be operating with acting deans.

Furthermore, UMDNJ's new interim president, Bruce C. Vladek, has come on board while putting all his constituents on notice that it will no longer be business as usual at UMDNJ:

People are all on notice that there is no tenure in the management structure of this organization. I feel empowered to restructure the administrative staff of this organization, subject to consultation and approval of the board, however I feel is necessary.
The rules of the game in this place have changed, and they haven't been changed by us. Even though the state is our lifeblood, we cannot, as a matter now of law, engage in some of the kinds of behaviors that have existed in the past. Some of the kinds of things that have (been) reported -- that may have become standard operating procedure in the past -- we cannot do anymore.

It sounds like he has the right idea, but will have a lot of work to do.

But he also noted,

As far as I know, the very, very real problems here are largely isolated from the educational, clinical and research activities of the university.

I do beg to differ somewhat with this. I am sure that UMDNJ has many dedicated professionals and faculty who have been working hard to keep the clinical and academic missions on track. Yet I am not sure how "isolated" they have been from the problems. It must have been demoralizing to work under the previous UMDNJ administration, which has now been revealed as scandal-ridden. I can only hope that their morale is improving now. Hopefully, the new leaders of UMDNJ will be worthy of their trust.

The case of UMDNJ should be a wake-up call for those who thought that business as usual was just a fine way to run the health care system. However, although this case, like that of UCI, has gotten plenty of local attention, it seems not to have been noticed outside of its region, nor in medical, health care, and health policy journals. As far as I can tell, the only place to see these cases juxtaposed is here on Health Care Renewal.

http://hcrenewal.blogspot.com/

http://hcrenewal.blogspot.com/2006/07/repositioning-and-rebranding-while.html#links

Monday, July 31, 2006
"Repositioning and Rebranding" While UMDNJ Burns (Money)

The management of the University of Medicine and Dentistry of New Jersey (UMDNJ) was back in the harsh media spotlight again. UMDNJ has appeared frequently in posts on this blog. The university now is operating under a federal deferred prosecution agreement with the supervision of a federal monitor (see recent posts here, here, here and here.) We had previously discussed allegations that UMDNJ had offered no-bid contracts, at times requiring no work, to the politically connected; had paid for lobbyists and made political contributions, even though UMDNJ is a state institution; and seemed to be run by political bosses rather than health care professionals. (See post here, with links to previous posts.) Most recently, the costs of all these management shenanigans was estimated to be a whopping $243 million (see post here).

The indefatigable Newark Star-Ledger reported that yet another UMDNJ trustee has resigned. This time the issue was

the federal monitor overseeing the school concluded [trustee] Sterritt had committed ethical and legal violations by pressuring university officials to hire his brother, an admitted alcoholic who lost his license to practice law because of misconduct.

The monitor, former federal Judge Herbert J. Stern, said in the report that staffers within the university's human resources department complained that Sterritt was 'very involved' and 'persistent' in an effort to find his brother a position at UMDNJ -- which they considered unprofessional and unacceptable interference.

The report said UMDNJ staff felt pressure to find employment for Sterritt's brother 'at all costs,' noting he was eventually hired after the job requirements were loosened so he could qualify. However, he was paid at the higher salary of the titled position before it was downgraded, according to the monitor.

The article also cataloged all the other UMDNJ leaders who have left:

In the past eight months, the university has lost its president, who was pressured to leave by Corzine; three other trustees who left after tougher ethics rules were put in place banning even casual business relationships with the school; the dean of the university's School of Osteopathic Medicine and the university's senior vice president for academic affairs, who were both accused of abusing travel and expense accounts; and a senior associate dean, who was fired for abusing his position to help himself, friends and family -- including wielding his influence to get a daughter into medical school.

Meanwhile, the repurcussions of the university's huge financial losses continue. The Star-Ledger also reported that the university will lay off more than 100 staff, raise tuition at the medical and dental schools by four percent, and delay the opening of a new out-patient cancer center at the Newark campus. The interim president warned of "longer waits in the hospital's emergency room for non-critical cases. He predicted patients also will have to wait longer to get appointments at the hospital's clinics, as well as face delays for elective surgery."

But amazingly, despite these cuts, the Star-Ledger further reported that UMDNJ leadership had planned to spend about $2.5 million on a "marketing campaign to spruce up the image of the state's scandal-plagued medical university." This was "the second time the governor's office has killed an image campaign by UMDNJ that it found to be ill-timed or ill-conceived. An earlier media effort was quashed in January under pressure by then-Gov. Richard Codey." (See post here.) " The new plan was to resurrect elements of that plan, in a so-called 'repositioning and rebranding campaign' to highlight UMDNJ's research, aimed at attracting researchers, students and patients to the university's clinical services and its teaching hospital. It included many of the television commercials and print advertisements that had already been produced before the lid had been put on the original marketing effort, officials said." The plan was all set to go forward, but after the Star-Ledger asked the state governor's office to comment on it, "the university was ordered to put the ad campaign on hold indefinitely. That request was made by Stuart Rabner, the governor's chief counsel, who told the university that while image improvement was important for UMDNJ, the $2.5 million expenditure would seem inappropriate at a time when the university was cutting jobs and programs to help address a $25.5 million budget deficit at UMDNJ's University Hospital. "

Ok, UMDNJ is operating under a deferred prosecution agreement, has lost $243 million to mismanagement and other administrative misadventures, has seen the departure of many of its top leaders, is running a deficit and forced to make severe cutbacks. So how do the current leaders respond? - by trying to run a marketing campaign of "repositioning and rebranding?" Is there no problem that can't be papered over by a little repositioning and rebranding?

One correspondent responded to the problems at one of the large pharmaceutical companies by wondering if that company had become "a marketing company that happens to make drugs." Has UMDNJ become "a marketing company that happens to be a health care university?"

Once again, the problem appears to be corporate culture. Health care organizations have attracted leaders who are more interested in marketing than in their fundamental missions. UMDNJ needs leaders who put mission before marketing. Leaders' papering over problems is what lead the university to its current sorry state.

http://hcrenewal.blogspot.com/2006/12/umdnj-as-political-sand-box.html
UMDNJ as a Political Sand-Box

The Newark Star-Ledger just published another in its long series of stories on the troubles at the University of Medicine and Dentistry of New Jersey (UMDNJ). As we have discussed previously, the university now is operating under a federal deferred prosecution agreement with the supervision of a federal monitor (see most recent posts here, here, here, here and here.) We had previously discussed allegations that UMDNJ had offered no-bid contracts, at times requiring no work, to the politically connected; had paid for lobbyists and made political contributions, even though UMDNJ is a state institution; and seemed to be run by political bosses rather than health care professionals. (See posts here, and here, with links to previous posts.) The most recent development (see post here with links to previous posts) was that UMDNJ apparently gave paid part-time faculty positions to some community cardiologists in exchange for their referrals to the University's cardiac surgery program, but not in exchange for any major academic responsibilities.

Now the Star-Ledger has come up with a story of some mind boggling decisions made by the former UMDNJ leadership that seemingly wasted millions on expensive building projects that now stand vacant. The article then concluded with another insightful analysis of what went wrong in the leadership culture of the university, an analysis that may generalize to other health care organizations.

First, let's summarize the blundering building projects. The first was a highly secure site to develop vaccines against biologic terror agents, which is years behind schedule because a UMDNJ leader wanted to relocate it to a piece of land owned by his neighbor. Per the Star-Ledger,

It was known as a Regional Biocontainment Lab.

It was announced in September 2003 by then-Health and Human Services Secretary Tommy Thomp son, who hailed it as 'a major step' toward providing effective vaccines and diagnostics for diseases caused by agents of bioterror as well as in fections such as SARS (Severe Acute Respiratory Syndrome) and West Nile virus.

The federal grant stipulated the project be built in Newark's University Heights, adjacent to an existing bioresearch lab operated by UMDNJ.

Memos and e-mails show that within four months, Robert A. Saporito -- then UMDNJ's senior vice president for academic af fairs -- was looking for another site, as university officials grew concerned they would be unable to find matching funds required to build the project.

The search for alternate sites was never disclosed to the public, to the political leaders who secured the money, or to the federal agency that awarded it.

Saporito was forced to resign in March after he was accused of abusing his expense account. In an interview before he left, he said changes in the original design, mandated by security concerns, led to discussions about relocating the lab. He said he explored moving the lab to Picatinny after receiving a call from William Marcellino, a developer who lived a few doors down from him in Brick Township.

When the National Institutes of Health learned about the Picatinny plan last year, the agency was clear: 'We explained to UMDNJ that alternate sites were not an option,' said John J. McGowan, an administrator at NIH.

In an August 2005 letter to the university, NIH officials complained that they had seen little progress on the project and warned 'if you are unable to show the project can be completed, we will need to begin to negotiate the return of funds.'

The next was a cancer center that sits mostly vacant.

The newest building on UMDNJ's Newark campus is a nine-story structure emblazoned with distinctive red signs identify ing it as the New Jersey Medical School/University Hospital Cancer Center.

It includes vast expanses of glass, state-of-the-art research labs, underground vaults for linear accelerators used in cancer treatment, and an outdoor garden for patients.

But no cancer treatment is going on. There are no doctors, no clinical services and no patients. While some researchers have moved in, more than half the building remains empty.

Christopher Paladino, a former university trustee, said there was never a real plan for the cancer center. He said millions were spent without benefit of any economic feasibility studies, or any examination of whether the center would actually bring in patients.

Paladino, named a trustee after the project began, concluded the center had been the product of jealousy between the school's Newark and New Brunswick campuses. In Newark, he said, there was a feeling that because the university has a cancer institute 'in New Brunswick, we should have it here.'

The article documented other expensive buildings that sit partially vacant in lieu of any realistic plans to use the space they provided. In particular,

Adjacent to the cancer center in Newark is a new, six-story building for ambulatory outpatient services completed this year. Walk through this structure, past the cool pastel walls, and there are few people. One level is vacant, as are large parts of the rest of the building.

Since before construction began in April 2003, UMDNJ officials knew they would have trouble down the road because the center was built with tax-free government bonds and money raised that way cannot be used for profit-making operations such as doctors' offices.

'The total confusion on that subject has been the major obstacle,' [Interim UMDNJ President] Vladeck said. 'We're starting to untie that knot.'

Vladeck said the complex was planned and built by people who put off the financial issues, figuring it would be constructed and 'by then, they would have to fix the problem.'

Finally, the Star-Ledger discussed a fascinating analysis of what has gone wrong with the leadership of UMDNJ.

Interviews with past and current officials indicate many projects were a product of a school that increasingly was divided into two worlds the past few years.

In one, nurses and doctors battled to provide health care in a poor, urban environment. But at the top were administrators who got their jobs through political patronage and whose basic job experience was not teaching or medicine, but state government and politics.

Paladino, who was an assistant counsel to Gov. Jim Florio, said political jobs seemed to be part of the lifeblood of the university.

'It's a Sharpe guy. It's a Rice guy. It's a McGreevey guy, or a DiFrancesco guy, he remarked, referring to former Newark Mayor Sharpe James, state Sen. Ronald Rice, and two former governors, James E. McGreevey and Donald DiFrancesco. Everyone has a guy. They don't hide from it.'

It wasn't always evil, he said, but it became a slippery slope as politicians sought comfortable jobs for their political supporters.

U.S. Attorney Christopher Christie, who is overseeing a criminal investigation into the university that was launched after a series of stories in The Star-Ledger last year, saw it all as less than innocuous.

"There were people in political life who were in charge of the budget process who made sure UMDNJ got taken care of, because they knew folks could go there and be employed,' said the U.S. Attorney. 'There was a very symbiotic relationship there between the political world and the university.'

He added that his parents once told him character was what you do when you think nobody's watching.

'UMDNJ,' Christie said, 'was the way politicians acted when they thought nobody was looking, and it's a pretty ugly picture.'

So there you have it. One fundamental problem with UMDNJ was that the University was run by people with no background or fundamental interest in health care, who did not share, even at an intellectual level, the values of health care. The leaders treated the country's largest health care university as there own political sand-box, completely disregarding its core mission, and thus completely disrespecting the patients and learners it was supposed to serve, and the health care professionals who tried to serve them.

After the revolution that turned health care over to business people, bureaucrats, and politicans, how many other health care organizations are run for the benefit of their leaders, rather than the missions they were supposed to support?