State Fines HMO and Suspends Enrollment

State regulators have imposed $126,000 in penalties and temporarily suspended new enrollment by a San Diego health-care firm that serves needy Medi-Cal patients, after accusing it of falsifying patients’ medical records to help pass a state inspection.

The state Department of Health Services began investigating ProCare Medical Group after a San Diego physician, formerly under contract with ProCare, accused the firm of wrongdoing. The allegations were reported by The Times in June.

Dr. Dianna L. Norman claimed that prior to a state audit, ProCare employees came to her office and altered and forged patient logs and medical charts to cover up shortcomings and to enhance the firm’s prospects for winning more Medi-Cal business.

Though a state official described the disciplinary measures as “harsh and fair,” a consumer group said the state’s action was much too lenient.

“If DHS doesn’t severely sanction a company for falsifying medical records, then the integrity of the whole system is in question,” said Jeanne Finberg, a staff attorney for Consumers Union’s San Francisco office.

Norman also said the penalty “didn’t go far enough.”

A ProCare spokesman said the company will contest the state’s penalties. “We believe our employees have done nothing wrong,” said Richard Hamilton, a public relations consultant for the firm.

As a result of Norman’s accusations, the state no longer discloses the names of patients whose records will be examined prior to audits, said Ann Kuhns, assistant chief of the state’s Medi-Cal managed-care unit.

Kuhns said the department’s investigation uncovered widespread abuses by ProCare in state quality audits in 1994, ’95 and ’96.

Norman’s allegations of medical chart falsification were corroborated “almost universally” by about 20 other physicians and their office staffs who were involved in state audits of the San Diego firm, according to a letter from state officials to ProCare.

Norman was the first doctor to complain to state officials about audit irregularities. She waited about 10 months after the audit to alert officials to her complaints, shortly after ProCare dropped its contract with her.

Norman has explained her hesitation to come forward by saying she was financially dependent on ProCare, which supplied more than half the patients in her medical practice.

Consumers Union’s Finberg said the fact that other ProCare doctors didn’t complain to the state “really shows the kind of death grip that health plans have on their participants, and why consumer protections are so important.”

ProCare is a managed-care firm that contracts with individual doctors to provide medical care for Medi-Cal recipients. The company, which has had frequent run-ins with state regulators, serves about 40,000 Medi-Cal enrollees in San Diego and elsewhere. Medi-Cal is California’s name for the state-federal Medicaid program for low- income families.

In a six-month investigation, state officials confirmed nearly all of Norman’s accusations. Investigators found that ProCare employees “altered, created and falsified” medical records in preparation for a January 1995 medical audit of Norman’s office, according to the state letter.

ProCare employees, supervised by Vice President Pamela Bocinski, spent nearly a month in Norman’s office in December 1994, going through 130 patient records that the company believed were likely to be audited by the state. Bocinski is the daughter of ProCare’s president and owner, Dr. Robert W. Dukes, a DHS official said.

The state also accused ProCare of creating false questionnaires for childhood nutrition and lead-poisoning information when those required documents were missing from Norman’s patient files. It also said the firm falsified child growth charts to make it appear that the information was in patients’ files when the patients were seen.

Kuhns said the state did not take harsher sanctions against ProCare because the company’s contract with the state expires June 30.

Also, she said the state has notified ProCare that it was rejecting an application by an affiliate, Great American Health Plan, to become a state-approved health maintenance organization serving Medi-Cal recipients.