Hospital Chain Caught Over-Admitting Patients and Over-Billing Medicare
An investigation by CBS’ 60 Minutes has exposed one of the nation’s largest hospital chains as apparently pushing their staff of doctors to admit patients into the hospital to meet quotas, and a medicare fraud expert and former employee has accused the chain of over-billing medicare.
The investigation was centered around the admission practices of a large chain of hospitals owned by Health Management Associates (HMA), the nation’s fourth largest for-profit hospital chain. The hospital chain brought in $5.8 billion last year. And almost half of this came from Medicare and Medicaid. The chicken and the egg: Admit more patients, bill more to Medicare and Medicaid.
The 60 Minutes investigation interviewed over a hundred people who were or are employees of HMA. The conclusion was that HMA pressured doctors to admit greater numbers of patients despite their medical needs. Company documents showed that quotas were set – typically higher than the industry average to push doctors to admit more. Documents revealed by the investigation showed that HMA executives set their admission quotas around 20% of all patients treated by doctors – nearly double the average of many non-profit hospitals.
When this aggressive admission practice is multiplied across Health Management Associates’ 70 hospitals among 15 states, the numbers are staggering. These hospitals are located in urban areas and rural areas alike. HMA’s goal – repeated throughout the interviews – was to increase the bottom line despite the needs of patients.
Here is an excerpt of part of the investigative piece. The two individuals commenting here are medical doctors with many years of hospital and emergency care experience:
Cliff Cloonan, M.D.: My department chief said, we will admit 20 percent of our patients or somebody’s going to get fired.
60 Minutes’ Steve Kroft: What’s wrong with admitting 20 percent?
Scott Rankin, M.D.: In a relatively rural, limited resource community hospital your admission rate out of the emergency department, somewhere in the neighborhood of 10 percent.
Steve Kroft: And they wanted 20?
Scott Rankin: Correct. They wanted 20.
The investigative piece also interviewed the HMA hospitals’ former director of compliance, Paul Meyer. Prior to his employment at HMA, Mr. Meyer was a 30-year veteran of the FBI who had investigated Medicare fraud.
Mr. Meyer told 60 Minutes’ Steve Kroft that he had discovered Medicare fraud at HMA: “Meyer says he audited four hospitals in Texas, Florida and Oklahoma and concluded that HMA had intentionally billed Medicare and Medicaid for hundreds of thousand of dollars in inappropriate hospital stays that did not meet government standards for admission or reimbursement.”
Steve Kroft: Did you think it was Medicare fraud?
Paul Meyer: Yes. It was Medicare fraud. Simple as that.
About one-tenth of health care costs are spent on unnecessary medical procedures and testing – some $210 billion a year.
The evidence is quite clear: Hospital organizations such as HMA put profits before patients, and apparently, profits before morality. It is one thing to defraud the taxpayers, but it is quite another to endanger someone’s life by admitting them into the hospital without sufficient cause.
This crime is especially egregious when we consider that according to the Centers for Disease Control, about two million patients contract a hospital-acquired infection and nearly 100,000 people die from hospital-acquired infections. An investigation published by Hearst Media found that about 200,000 people die each year in the U.S. from preventable medical mistakes and infections.
Therefore, to admit a patient into the hospital without medical justification is to put that person’s life in danger.
See the 60 Minutes video, Hospitals: The cost of admission, video online.