P is for Peril

"What happened?"

"I wish I knew. Harvey and I are often out of town, crisscrossing the state. We've probably taken on more than we should, but Harvey's like me-the two of us thrive on pressure." The phone on his desk began to ring. He glanced at it briefly.

"You need to get that?"

"Dana will pick up. I should go back and fill you in, at least superficially, on how this business works. What you have essentially are three separate entities. Harvey and I own the property through Century Comprehensive, which is a company we formed back in 1971. By property, I'm talking now about the land and the building occupied by Pacific Meadows. The nursing home is actually operated by Genesis, as I've mentioned before. They lease the physical plant from us. They also handle all the billing: accounts payable and receivable, Medicare and Medicaid billing, DME purchases-that's durable medical equipment, in case you're wondering. Genesis falls under the larger umbrella of a company called Millennium Health Care. Millennium is publicly held, and as such, they're required by law to submit financial information to Social Security, and by that, I mean lists of assets, liabilities, and the return on equity capital. A certified public accountant has to verify those figures. Ten, fifteen years ago, an owner and operator were often one in the same, but times have changed. By law, those functions now have to be separate and distinct. It's like a system of checks and balances, keeps everybody on the up and up."

"Where did Dr. Purcell fit in?"

"I'm just getting to him. Under the management company, you have Dow, or his equivalent. He's the medical administrator of the facility, responsible for the day-in, day-out nuts-and-bolts decisions, which is where he may have gotten into trouble."

"The three of you are partners?"

"Not really. That's how Dow refers to us, but it's not technically true. For the layperson, it's the easiest explanation of our relationship. We couldn't be in partnership with Dow or the management company that runs the business. Believe me, the government gets very testy about any agreement that isn't the result of an arm's-length negotiation: in other words, two unrelated parties not in collusion with one another. Dow could hardly make unbiased decisions about billing practices if he stood to profit. What you're probably referring to is the fact he bought stock in Millennium Health Care, which is a chain we also own stock in. I guess that makes us partners of a sort. We're all in the same business, which is service to the elderly in our community. Of course we had no real say in the matter, but Harvey and I both thought Pacific Meadows would be the perfect venue for a man with Dow's experience and reputation. I see now he may not have had quite the head for business I'd been led to believe. The first we heard about this Medicare business was last May. I thought then, and I'm still convinced, any discrepancies would turn out to be simple clerical mistakes, a compilation of coding errors as opposed to actual inflation of the figures with any intent to defraud. Dow Purcell is just too fine a man to stoop to cheating in that way. My guess is, he either didn't have a thorough understanding of how Medicare works or he got impatient with all the nit-picking nonsense the bureaucrats put you through. I can't fault him for that. As a physician, his first thought is always going to be for the well-being of the patient. He might have bridled at seeing all the ridiculous amounts of paperwork get in the way of first-class care, or worse still, he may have felt the government had no right to dictate to him."

"So you think he might have bent the rules a bit?"

"I prefer that explanation to the one the fraud control investigator seems to be taking. A better guess is he was careless, penciling approval on charges he should have examined more closely. The notion of Dowan actively debunking the government is incomprehensible."

"Suppose he did, though. I don't understand how he benefits. If Medicare or Medicaid is overbilled, aren't those monies paid to the operating company? Seems like it's really their responsibility, isn't it?"

"Absolutely. But outside providers, such as ambulance companies and medical supply businesses, can collect thousands of dollars for services never rendered, or goods not delivered, or goods billed out at inflated prices. If someone in Dow's position were in league with them, the contracts could mean thousands of dollars to the companies involved. For this, he'd receive remuneration-a kickback-perhaps under the heading of a professional discount or a referral fee. Now that HCFA-excuse all these acronyms, that's the Health Care Financing Administration, which regulates Medicare and Medicaid programs-"