Paying kickbacks to doctors for referrals. Surgically implanting unneeded heart monitors. Aggravating troubled teenagers during psychiatric sessions to worsen their mental health.

Health-care providers accused of bilking taxpayers by inflating Medicare or Medicaid expenses have paid billions of dollars in settlements with the federal government over the past decade for a variety of transgressions, some of which risked patients’ lives. Now the money is flowing the other way.

Companies that settled cases involving overbilling or fraud -- among them Tenet Healthcare Corp., Universal Health Services Inc. and Beaumont Health -- received more than $36 billion in interest-free loans from a U.S. Health and Human Services Department program to help providers handle cash-flow shortages caused by the pandemic, according to data compiled by Bloomberg and Good Jobs First, a watchdog group that has been monitoring federal relief payments.

That’s more than one-third of the $100 billion distributed through the loan program. In addition, companies accused of wrongdoing got more than $20 billion in grants issued by HHS to stave off coronavirus-related losses. In most of the cases, there was no determination of liability.

Health-care companies applied for the loans based on previous Medicare billings -- the same metric many of them were accused of inflating. Grants were distributed automatically based on patient revenues.

The loans are structured as advances on future payments the companies expect to receive from the government. Borrowers have from seven months to a year to repay them without interest. The rate jumps to 10.25% afterward. Grants don’t have to be repaid.

‘Pay and Chase’
Despite warnings from Congress that HHS hasn’t done enough to avoid paying fraudulent claims, neither program denied coronavirus aid to providers that settled claims in the past.

In November, HHS enacted new regulations intended to replace its “pay and chase” system, which reimburses providers first, then has auditors investigate those it thinks engaged in fraud, an approach it acknowledges is “expensive and inefficient” and leaves billions of dollars unrecoverable. The new guidelines permit HHS to deny Medicare enrollment to providers that have exhibited “a pattern or practice of abusive” charges.

Katie McKeogh, an HHS spokeswoman, said in an email that the agency did screen to determine whether providers were banned from doing business with Medicare, citing guidelines that lay out 20 reasons for revoking billing authority. She also said providers are forbidden from using coronavirus aid to pay legal settlements. But McKeogh declined to answer questions about whether the new regulations were used to vet Covid relief recipients or how large a portion of the aid had been paid to companies that settled fraud claims.

HHS Secretary Alex Azar and Seema Verma, administrator of the Centers for Medicare and Medicaid Services, which oversees the loan program, declined requests to be interviewed.

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