Medicare Fraud
Medicare covers almost 60 million Americans. It has a budget of more than $740 billion and a decidedly uneven record at deterring fraud. Despite sporadic attempts to crack down on providers who bilk the system, there’s still an estimated $50 billion a year in fraud, according to the Government Accountability Office. Offenders include large hospital systems as well as remote solo practices. Misdeeds range from minor billing errors to systematic mistreatment of patients.
Government watchdog groups say the amount of aid that went to companies that paid to settle fraud claims illustrates the rampant abuse in the Medicare and Medicaid system and the government’s failure to enact effective safeguards.
“You can’t call it a few bad apples, because it goes across the board from small regional providers to giants of the industry,” said Phil Mattera, research director for Good Jobs First, which is compiling and analyzing HHS data as part of its Covid Stimulus Watch Program. “This problem is systemic. It involves hospitals, dialysis centers, doctors -- everything from nonprofits, to for-profits. They’re all feeding at the trough. There are so many defrauding the government. And we’re making it easier.”
An American Hospital Association spokesman, Colin Milligan, defended the way HHS disbursed the loans and grants. “Congress made it very clear that the provider relief fund was intended for all hospitals on the front lines in the fight against the greatest pandemic of our lifetime as they deal with lost revenue and Covid-related expenses,” he said. “That was Congress’ intent, and we concur with it.”
Unnecessary Admissions
As a result, Prime Healthcare Services Inc., an Ontario, California-based hospital system with 45 acute care centers in 14 states, was free to collect almost $600 million in relief grants and loans despite its history of overbilling Medicare.
In 2018, the company and its chief executive officer agreed to pay $65 million in penalties to settle a lawsuit alleging that they had for years run a “deliberate corporate-driven scheme” to overcharge Medicare by unnecessarily admitting more than 35,000 patients to 14 California hospitals for overnight stays that weren’t medically warranted.
Prime Healthcare, which didn’t admit to wrongdoing, said in an email Tuesday that it has been in full compliance with federal guidelines. Elizabeth Nikels, a spokeswoman for the company, said its hospitals have been caring for thousands of Covid patients. “The expenses greatly exceed our revenues due to the tremendous costs incurred and loss of volume,” she said. “Therefore these payments help subsidize losses and allow us to continue to care for patients, employ nearly 36,000 staff and keep our hospitals open to serve communities in their times of greatest need.”
Among the biggest recipients of HHS loans and grants are large health-care companies that have settled multiple cases. Dallas-based Tenet, which owns 65 hospitals around the country, received at least $700 million in loans and $300 million in grants from the programs.
Tenet has paid more than $530 million in fines over the past decade, including $513 million in October 2016 to resolve criminal charges and civil claims that it offered kickbacks to doctors to refer pregnant women to its hospitals, reaping hundreds of millions of dollars. Two subsidiaries pleaded guilty to conspiracy to defraud the government and paying kickbacks and bribes. The parent company entered into a non-prosecution agreement with the Justice Department, promising to improve compliance.
Earlier this year, Tenet paid $1.4 million to settle allegations that it had implanted cardiac monitors in patients who didn’t need them. It had previously been among a group of companies that paid $250 million in 2015 to settle claims about cardiac implants that violated Medicare requirements. In both cases, liability wasn’t determined.