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Based on observation, interview and review of facility's policy, "Outdated Drug Control", review date 10/09, it was determined the facility failed to have an inventory management system that ensured outdated medications were not available for patient use. Twenty-five (25) vials of outdated Tobramycin (antibiotic) Injection, to be given intravenously, were on the shelf with other medications to be administered.

The findings include:

Review of facility's policy, "Outdated Drug Control," review date 10/09, revealed the purpose was to establish a mechanism to prevent outdated medication from being dispensed for patient use or remaining in the dispensing area of the Pharmacy or in patient areas. Pharmacy personnel would constantly check all medications physically for dated items and remove all outdated packages from the shelves.

Observation during tour of the Pharmacy, on 10/10/12 at 10:00 AM, revealed a carton of twenty-five (25) vials of Tobramycin Injection, eighty (80) milligrams per two (2) milliliters, with an expiration date of 08/2012. The expiration date was verified with the Director of Pharmacy.

Interview with the Director of Pharmacy, on 10/10/12 at 10:00 AM, revealed the Tobramycin should have been updated in the Intellshelf System and that the batch report would have been run later in the day. He stated it was an automated report that was based on the information the pharmacy technician put in the program.

Interview with Pharmacy Technician #1, on 10/12/12 at 2:40 PM, revealed it was the technician's responsibility to check the drugs and biologicals for an expiration date and inventory date. She stated back dated medications should be moved up and the date changed in the computer.

Based on interview, review of facility minutes from the Medical Executive Committee and the Quality Committee, review of facility document, "Utilization/Case Management Plan, 2011" (UM Plan) and review of the contract between the facility and Executive Health Resources, Inc. (EHR), it was determined the facility failed to ensure a component of the UM Plan, establishment of a Utilization Management (UM) Committee, was implemented. Failure to establish the UM Committee prevented the facility from having an appropriate process for adverse medical necessity determinations.

Review of the UM Plan revealed a UM Committee was a component of the plan. Review of facility documents revealed no minutes from the UM Committee. Review of minutes from the Medical Executive Committee and Quality Committee revealed only limited UM information, such as readmissions, was reported through them.

Interview with the Director of Case Management revealed there was no UM Committee. She further revealed there was not an appropriate process in place for adverse determinations of medical necessity when the attending Physician did not concur with EHR, an external peer review agency. Interview with the interim Chief Executive Officer (CEO) and the Chief Clinical Officer (CCO), revealed no minutes from the UM Committee could be produced; however, both believed the UM Committee functions were being met by the Quality Committee.

Based on interview, review of Medical Staff Executive Committee and Quality Committee minutes and review of facility document, "Utilization/Case Management Plan, 2011" (UM Plan), it was determined the facility failed to implement a component of the UM Plan by not establishing a UM Committee that was a committee of the medical staff to carry out the utilization review (UR) function. Also, in lieu of the medical staff UM Committee, the facility failed to establish a UM Committee composed of a group outside the institution established by the local medical society and some or all of the hospitals in the locality to carry out the UR function.

The findings include:

Review of facility document, "Utilization/Case Management Plan, 2011" (UM Plan), revealed the facility was to have a Utilization Management (UM) Committee which would meet quarterly and be accountable to the Medical Staff Executive Committee. The UM Plan further revealed some of the functions of the UM Committee were to assure the rights of Medicare beneficiaries were honored with respect to coverage decisions and discharge planning; to perform and/or coordinate physician advisory and peer review functions; and to establish and assure implementation of effective UM policies and procedures that comply with regulatory and accreditation requirements.

Review of the Medical Staff Executive Committee minutes from 10/12/11 to 09/19/12 revealed, in the 05/16/12 meeting, under "Quality" that the "ElderCare Initiative" was discussed. One component of this initiative was to measure readmission rates and benchmark with a national rate of one (1) percent. This was the only documentation pertaining to UM information.

Review of the Quality Committee minutes from 12/07/11 to 09/17/12 revealed there were three (3) meetings where UM information was documented. The 12/07/11 meeting minutes revealed 2012 performance improvement initiatives would include thirty (30) day readmissions for acute myocardial infarction, heart failure and pneumonia; percent of readmissions within seven (7) days; and length of stay. The 05/09/12 meeting minutes revealed an announcement by the Quality Committee Chairman that with the "ElderCare Initiative" introduction, the Emergency Department (ED) had seen an increased admission rate of approximately sixteen (16) percent. The 09/12/12 meeting minutes stated that 2012 Interqual (criteria used to determine appropriateness of admissions) Binders were now in the ED to assist Physicians with making appropriate admission decisions. There was no other documentation from the Quality Committee minutes pertaining to UM information.

Interview with the Director of Case Management, on 10/12/12 at 2:15 PM, revealed there was not a Utilization Management Committee. She further revealed the facility contracted with an external review company, Executive Health Resources, Inc. (EHR) for admission and continued stay peer review. She stated the facility had believed EHR would function as the UM Committee; however, when the facility looked more in-depth at the federal regulations, it was determined a UM Committee was required. She further revealed the facility was trying to get a UM Committee established as soon as possible, but it may be another month. She also stated the only UM information being tracked through the Quality Committee were readmissions.

Interview with the Quality Committee Director, on 10/12/12 at 3:20 PM, revealed he believed the functions of the UM Committee were being handled by the Quality Committee.

Interview with the interim Chief Executive Officer (CEO) and the Chief Clinical Officer (CCO), on 10/12/12 at 5:45 PM, revealed they both had been in their positions a short time and could not produce any minutes or documentation of an existing UM Committee. They both stated they believed the functions of the UM Committee were being handled by the Quality Committee.

Based on interview, review of facility document, "Utilization/Case Management Plan, 2011" (UM Plan), and review of facility contract with Executive Health Resources, Inc. (EHR), an external review agency, it was determined the facility failed to ensure there was a process in place to handle an adverse determination that an admission or continued stay was not medically necessary when the attending Physician was not in concurrence by having at least two (2) Physician members of the UM Committee make the determination and give written notice within two (2) days after the determination to the hospital, the patient, and the practitioner(s) responsible for the care of the patient.

The findings include:

Review of the facility document, "Utilization/Case Management Plan, 2011" (UM Plan), revealed the facility was to have a Utilization Management (UM) Committee which would meet quarterly and be accountable to the Medical Staff Executive Committee. The UM Plan further revealed some of the functions of the UM Committee were to assure the rights of Medicare beneficiaries were honored with respect to coverage decisions and discharge planning; to perform and/or coordinate physician advisory and peer review functions; and to establish and assure implementation of effective UM policies and procedures that comply with regulatory and accreditation requirements. The UM Plan also detailed the "Adverse Determination Process" that stated if one Physician on the UM Committee made a determination that a patient's stay was not medically necessary and the attending Physician did not concur, at least one additional Physician member of the UR Committee must review the case. If both agreed the stay was not medically necessary, their determination became final. After this occurred, proper written notification of this adverse decision would be sent, within two (2) days, to the attending Physician, patient or next of kin, facility administrator and the facility Business Office.

Review of the contract entered into between the facility and EHR on 08/20/09 provided that EHR would provide certain services for the facility. The services included admission and continued stay reviews.

Interview with the Director of Case Management, on 10/12/12 at 2:15 PM, revealed there was not a UM Committee in existence. She further stated that an external medical review company, EHR, was used to evaluate medical necessity of a patient's stay if the patient did not meet Interqual criteria (standards used to evaluate appropriateness of a patient's admission and/or continued stay). The typical process for an admission review for appropriateness of admission began one day after admission and for continued stay review for appropriateness of continued hospitalization occurred at defined intervals, depending on the patient's diagnoses and treatment plan. If the review nurse believed the patient did not meet criteria to stay in the facility, he/she would contact EHR for concurrence or nonconcurrence. If a Physician from EHR believed the admission or continued stay was not medically necessary, he/she would contact the attending Physician. If the attending Physician concurred, he/she would discharge the patient. However, she further revealed if the attending Physician did not concur, he/she was asked to write a progress note stating why the patient needed to remain in the facility, and there were no additional steps taken, such as two (2) Physician review by members of the UM Committee, because this committee did not exist. She further revealed, in her thirteen (13) months since becoming the Director of Case Management, she knew of no Medicare beneficiary that had been given a noncoverage notice.