Lawrence Memorial Hospital has changed how it offers information to patients who may qualify for disability payments, after a Lawrence doctor expressed concern the system was ripe for abuse.
LMH officials recently confirmed it has directed an outside contractor that provides Medicaid assistance to no longer provide information to patients about firms that charge people a fee to apply for disability benefits. The directive came after Lawrence physician Alan Cowles expressed concern the hospital’s system didn’t guard against the contractor funneling business to a sister company that provides disability application assistance.
“What led me to be concerned about this is that it appeared to me a company was perhaps being allowed to unfairly solicit business inside the hospital,” said Cowles, who operates his own firm that helps people apply for disability benefits.
LMH officials said they found no signs of wrongdoing on the part of its contractor or any employees but said they decided to change the system to prevent the appearance of any conflict of interest.
“We did not want to give the impression that any particular provider was getting preferential treatment,” said Joseph Pedley, chief financial officer at LMH.
Cowles’ concerns centered around a contract Lawrence Memorial Hospital has with Lawrence-based Midland Professional Services. Midland often works with uninsured patients of the hospital to arrange ways for patients to pay their hospital bills. Often the process involves Midland helping patients apply for Medicaid benefits. Midland does not charge patients for providing them assistance, but rather receives a fee from LMH, if the patient is accepted into Medicaid and the hospital is reimbursed by Medicaid.
But as part of the work Midland did with patients, it sometimes would recommend a patient also apply for disability benefits through the Social Security Administration. Midland told patients it could not help them apply for disability benefits, but it would provide them a list of four private firms that could help. One of the firms was Disability Professionals, which LMH said is a “sister company” to Midland.
Disability Professionals, according to its website, charges customers for its services.
Janice Early, director of community relations for LMH, said Midland said it was not doing anything to steer customers to Disability Professionals. Early also said the hospital did not find any evidence that Midland was acting inappropriately, but she said the hospital didn’t have any way of knowing whether the list of disability assistance firms was being provided to customers or whether the services of Disability Professionals were being highlighted in any way. Early said hospital administrators decided to direct Midland to not provide any referrals related to disability applications to ensure that patients would never have any reason to question the system.
“It was all done in the spirit of going the extra mile for the patient,” Early said. “There wasn’t anything beyond that.”
Now if Midland sees a patient that could be a candidate to receive disability benefits, the patient is directed to the yellow pages to seek assistance on their own, Early said. Pedley said the hospital considered creating a more comprehensive list of disability assistance firms, but decided against it because the hospital didn’t feel like it was in a position to vet the qualifications of the firms.
An official with Midland said the company is fine with the changes the hospital has made. Roger McCollister, chief executive of Midland Professional Services, said the company was never in a position to financially benefit from any referral it made to a disability firm.
“We were just trying to go the extra mile to provide people with a list,” McCollister said. “We’re happy enough to just point them to the phone book.”
Cowles said he is pleased with the changes the hospital has made.
“I think they are moving in the right direction,” Cowles said. “I think they are more sensitive to possible conflicts of interests that could exist in a situation like this.”
But Cowles said he was disappointed with the initial response from LMH. Cowles became interested in the issue because he had heard two or three disability patients over the years express confusion about the referral system used at LMH. Cowles said he had no evidence Midland was acting inappropriately but wanted to find out more from the hospital.
He inquired about the referral system in late 2010, and received a brief response from hospital administrators. Cowles said he tried to obtain more information about the system off and on during 2011 but received little information and was unsuccessful in getting a meeting with hospital administrators.
In February 2012, Cowles submitted a Kansas Open Records request to hospital, which is subject to the law because it is a nonprofit organization and an entity of the city. Cowles received no response to the request. In May, Cowles filed another open records request, and again received no response. Kansas law generally requires organizations to provide at least a preliminary response to an open records request within three business days of receiving the request.
Last month, Cowles took his concerns to the Lawrence City Commission. Cowles then received a meeting with hospital officials after the Journal-World began inquiring about the disability referral system.
“It was pretty frustrating trying to communicate with them,” Cowles said.
Early said the hospital did err in not responding to Cowles’ open records request. She said it appears the requests were inappropriately forwarded to the medical records department and did not get to her office, which processes all open records requests.
“We had some internal confusion about those requests,” Early said. “This has been an opportunity to educate everyone about how those requests are handled.”