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War of the Wards

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"DHS at first opposed our license for political reasons," he says. "Other forces didn't want Phoenix Children's Hospital to develop. So we overcame that by dotting every 'i' and crossing every 't,' which made it impossible for them not to grant us the license."

Dan Green, vice president of communications at Samaritan, says officials there have been kept abreast of HCFA's concerns about Phoenix Children's relationship with Good Sam. And the CEO of Samaritan traveled to San Francisco for last week's meeting.

He said the issue of sharing the Medicare number with Phoenix Children's Hospital was sanctioned in 1983 and 1984 by authorities. Green says the sudden suspicion about the whole arrangement is "a little bit of a mystery."

Others interviewed by New Times expressed confusion about what was going on with HCFA and Phoenix Children's. Many had heard something was up, but didn't know what it entailed. Some were puzzled by the secrecy about the controversy; although Phoenix Children's and HCFA have been wrestling with the issue since January, there have been no public statements or publicity about the discussions. Even Dr. Richard Reznick, head of the pediatric consortium working toward seeing a children's hospital become a reality, says he doesn't know details about the discussions between the feds and Phoenix Children's.

Some allege a concerted effort by hospital officials to keep these problems quiet. Stamp denies this, but admits Phoenix Children's hasn't tried to publicize the mess. Others suggest that politics and preferential treatment have led to state officials downplaying the seriousness of the situation. One observer says keeping a lid on the whole issue "is the worst way to deal with it," because it leads people to believe Phoenix Children's has something to hide.

An August 31 letter from HCFA to Stamp about the meeting Thursday suggests Phoenix Children's didn't want much to leak out about the issue.

"It is necessary to notify the Arizona State Agency and its Title XIX program of this meeting and so we are sending them a copy of this letter. We will not notify anyone else, as you requested," HCFA's Wayne Moon wrote.

Stamp is reluctant to reveal much about the hospital's specific plans, saying an announcement will be made soon.

And while he characterized the communications between Phoenix Children's and HCFA as an ongoing attempt to smooth things over, an examination of HCFA's letters reveals a growing sense of irritation on the part of the government.

From an August 7, 1998, letter: "It has come to our attention that Phoenix Children's Hospital (PCH) is not a Medicare certified hospital. Rather than meeting the requirements for a childrens hospital . . . and meeting the requirements for a hospital-in-a-hospital, PCH is operating as part of Good Samaritan Hospital, using its Medicare provider number . . . and has been treated as a department of Good Samaritan Hospital for Medicare reimbursement over the years.

"If the Health Care Financing Administration (HCFA) approved this arrangement, it was in error and now it must be decided whether or not PCH wishes to meet the requirements for a childrens hospital as the current arrangement cannot continue."

From a March 11 letter: "Thank you for your letter of January 29, 1999 in which you explain your desire to be Medicare certified as a children's hospital in a hospital. There are other items, in addition to the qualifications mentioned in your letter, that must be met before your facility can be certified as you have requested . . .

"In order to be a separate hospital, Phoenix Children's Hospital must have its own discreet space (i.e. not scattered throughout GSRMC [Good Samaritan Regional Medical Center]), with its own entrance and signage so the public knows it is entering PCH rather than GSRMC when presenting at the facility. Beds may not be commingled with those of GSRMC and the services you provide must be in your own square footage . . ."

The letter questions Phoenix Children's contention that it meets a federal requirement that at least 75 percent of its patients are referred by hospitals other than the "host hospital" -- Good Sam.

"Would you clarify for us how neonates [newborns] delivered on campus are direct admits rather than transfers from GSRMC? Or does PCH have its own labor and delivery department? If the babies are born in GSRMC and then admitted to PCH's NICU [Neonatal Intensive Care Unit], the admission would be considered a transfer from the host hospital."

Also questioned is how Phoenix Children's can segregate its costs and services from Good Sam's. "We believe it is critical for PCH to address how it, as a separately certified hospital, intends to account for its costs, which currently are included in GSRMC's cost reports."

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Laura Laughlin
Contact: Laura Laughlin