Hospital Chain Inflated Bills, Pressured Doctors Into Generating Admissions, Lawsuits Claim

There are many accusations of money-grubbing in the health care industry. Most of them are subtle: a preferred medication here, a handshake behind closed doors there. But actually hanging a chart on the wall and proudly color-coding your ER doctors like car salesmen based on how high their admission rates are? That’s about as in-your-face as the pursuit of profit gets.

That sales chart, along with other incredibly questionable tactics, was a product of the minds at Florida-based for-profit hospital chain Health Management Associates, the New York Times reports. The chain is currently the subject of at least eight whistleblower lawsuits in six different states.

The lawsuits, joined by the Justice Department this month, accuse Health Management Associates of using “sophisticated software systems, financial incentives and threats” to pressure doctors to comply with their policies. Those policies, which came from the CEO’s office and rolled all the way down, were aimed at milking as much money as possible out of Medicare and Medicaid.

Call a temperature of 98.7 high enough to admit a baby for having a fever? Sure! Aim to admit more than 50% of all ER patients over age 65? Absolutely! Make a teenager who just needs some stitches in the knee stay overnight? Now you’re cooking!

Not only does the hospital chain apparently have a clear record of such deliberately excessive patient care, but also HMA has a history of firing the managers and executives who questioned or objected to the policies.

HMA is currently in the middle of a merger with Community Health Systems. According to the NYT, as part of that merger, the chain disclosed regulatory filings revealing that the organization has been under investigation by multiple states’ attorneys general over the past two years–but not until after shareholders voted on the acquisition.

However, revelations about HMA’s behavior don’t appear to be causing it any trouble with investors. Stock prices for both companies have remained roughly stable since early November. An investment analyst specializing in health care wrote, “Investors seem to think that D.O.J. investigations, qui tam suits and allegations of serious Medicare fraud are simply a cost of doing business.” She added that corporations are not likely to be deterred by any fine less than $500 million.

HMA is currently also the subject of shareholder lawsuits and a federal securities investigation, the NYT reports. A former company executive was indicted in 2013 on obstruction charges related to those investigations.

Hospital Chain Said to Scheme to Inflate Bills [New York Times]

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  1. PhillyDom says:

    Yet more evidence why the profit motive and health care are incompatible.