Doctors Under Pressure to Meet Quotas and Fill Hospital Beds

Friday, December 14, 2012

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Doctors and hospitals around the country seem to be butting heads. In the past month, an article in The New York Times and a segment on the television “magazine” show 60 Minutes shed light on some questionable practices being enforced by hospitals on physicians working for them.

I previously wrote a blog on this structural shift in the practice of medicine. Click here to read that blog.

The effects of this trend are examined in these two news stories. Doctors and former employees from a number of hospitals around the country were interviewed and all seem to be dealing with the same issues. The biggest concerns addressed were: pressure to order unnecessary tests, admitting patients to fill hospital quotas and drive hospital profits, and the feeling of being controlled by hospital executives and administrators instead of practicing effective medicine.

Making Quota to Increase Bottom Line.

On December 2, 2012, 60 Minutes aired an investigative segment on one of the largest for-profit hospital chains in the country. Former employees and physicians alleged this hospital system thrived by buying urban-area hospitals and turning them into profit centers by filing empty beds from emergency rooms. A former emergency medicine doctor stated that the hospital in which he worked required an admission rate of twenty percent (20%) for patients seen in the ER and fifty percent (50%) for patients who were 65 years old and older (most of whom are Medicare patients) seen in the ER.

A former hospital system employee interviewed by 60 Minutes claimed he was in charge of auditing the hospital chain in question. He stated that he was convinced that doctors were under an extraordinary amount of pressure to fill hospital beds. He stated that he personally audited hospitals in Texas, Florida and Oklahoma, and concluded there were hundreds of thousands of dollars submitted to Medicare and Medicaid for hospital stays that did not meet standards for reimbursement, including medical necessity.

Doctors interviewed for The New York Times article had similar stories. They stated in interviews that hospital administrators created quotas for how many patients should be admitted, because more admissions allegedly meant more money. Doctors who met or exceeded quotas were rewarded with increased compensation, while doctors who did not felt in danger of losing their jobs.

Click here to read the entire New York times article.

Ordering Unnecessary Tests.

The New York Times article looked at a number of lawsuits filed by former employees who allege the hospitals they worked for compensated doctors for ordering more tests than necessary.

The Department of Justice (DOJ) recently settled with a hospital group in Joplin, Missouri. According to the DOJ press release, the hospital system had to pay more than $9.3 million for rewarding doctors partly based on how many tests they ordered. This is in direct violation of the Stark Law and the False Claims Act.

Click here to read the entire press release from the DOJ.

I recently wrote an article for Medical Economics on the legal ramifications of ordering unnecessary tests. To read that article, click here.

If you want to know more on the Stark Law, click here.

Corporate Control of Physicians.

Doctors also stated they felt controlled by hospital executives. This was due, in part, to a corporate wide computer software system that was customized to automatically order an extensive battery of tests, some unnecessary, as soon as a patient walked into the hospital. It’s also stated that the software would prompt a physician to reconsider when he or she decided to send an emergency room patient home.

Most doctors interviewed were upset that the program also generated reports that evaluated each doctor’s performance and productivity.

To watch the segment from 60 Minutes, click here.

Hospitals Speak Out.

The hospital system in question by 60 Minutes maintains that these allegations are not correct. The executive vice president said that as a whole admission rates haven’t changed in four years and are near or below industry averages. The hospital systems believe that by consolidating they are embracing the new model of health care and state patient care comes first.

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Do you think there are constant battles between doctors and hospitals? As a health professional, have you experienced the pressure to admit patients, order unnecessary tests or refer a patient inside your network? Please leave any thoughtful comments below.


Creswell, Julie and Abelson, Reed. “A Hospital War Reflects a Bind of Doctors in the U.S.” The New York Times. (November 30, 2012). From:

Kroft, Steve. “Hospitals: The Cost of Admission.” 60 Minutes. (December 2, 2012). From:

Department of Justice. “Missouri Hospital System Agrees to Pay $9.3 Million to Resolve False Claims Act and Stark Law Violations.” DOJ. (November 5, 2012). From:

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Tag Words: hospital acquisitions, private practice mergers, medical groups, whistleblower, Qui Tam, Department of Justice (DOJ), Medicare fraud, Medicaid fraud, overbilling, unnecessary tests, Stark Law, False Claims Act, reviewing and negotiating contracts, business transactions, Florida health care lawyer, Florida health care attorney, contract attorney, contract lawyer, physician contract lawyer, physician contract attorney, sale of practice, closing attorney, merger legal counsel

"The Health Law Firm" is a registered fictitious business name of George F. Indest III, P.A. - The Health Law Firm, a Florida professional service corporation, since 1999.
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