Hospitals: The cost of admission


Kroft: If you want to know why health care costs so much in this country, consider this– it’s estimated that $210 billion a year, about 10% of all health expenditures, goes towards unnecessary tests and treatments, and a big chunk of that comes right out of the pockets of american taxpayers in the form of medicare and medicaid payments. For more than a year, we have been looking into the admission and billing practices of health management associates. It’s the fourth largest for- profit hospital chain in the country, with revenues of $5.8 billion last year, and nearly half of that coming from medicare and medicaid programs. We talked to more than 100 current and former employees, and we heard a similar story over and over– that h.M.A. Relentlessly pressured its doctors to admit more anmore patients, regardless of medical need, in order to increase revenues. Health management associates owns 70 hospitals in 15 states. It’s thrived buying small, struggling hospitals in non- urban areas, turning them into profit centers by filling empty beds. Generally speaking, the more patients a hospital admits, the more money it can make, a business strategy that h.M.A. Has aggressively pursued. Did you feel the hospital was putting pressure on doctors to admit people? Nancy Alford: Yes. Kroft: For what reason? Alford: Money. Kroft: You’re sure of that? Alford: Uh-huh. Kroft: Until she was fired, nancy alford was the director of case management at the h.M.A. Hospital in mesquite, texas, where she oversaw the auditing of patient records and signed off on the accuracy of bills sent to medicare and medicaid. She’d never met former h.M.A. Doctors jeff hamby, cliff cloonan, and scott rankin until we brought them together in new york to discuss their experiences at h.M.A. Scott Rankin: What’s really remarkable is, we’re from very different areas of the country, yet the pressures placed upon the emergency physicians and the mechanism in place to enforce those procedures and policies– exactly the same. Kroft: Cliff cloonan is a retired colonel who spent 21 years as an army doctor before joining the carlisle regional medical center in pennsylvania as the assistant emergency room director. Dr. Scott rankin worked in the same department. Both say they were told by h.M.A. And its e.R. Staffing contractor, emcare, that if they didn’t start admitting more patients to the hospital, they would lose their jobs. Cliff Cloonan: My department chief said, “we will admit 20% of our patients or somebody’s going to get fired.” Kroft: What’s wrong with admitting 20%? Rankin: In a relatively rural, limited-resource community hospital, your admission rate out of the emergency department, somewhere in the neighborhood of 10%. Kroft: And they wanted 20%? Rankin: Correct. They wanted 20%. Cloonan: There’s no way you can do that and not have it be fraudulent, because you’re not admitting on the basis of medical requirements, you’re basing it… It on strictly an arbitrary number that has been pulled out. Kroft: All sorts of businesses set quotas. What’s wrong with this? Rankin: We’re not building widgets. We’re taking care of patients who are ill and come in to the emergency department. Kroft: Jeff hamby was an emergency room doctor at h.M.A.’S summit medical center in northwest arkansas. He says he was fired for not meeting admission targets and is suing h.M.A. For wrongful termination. H.M.A. Maintains no one has ever been fired over admission numbers. Hamby called the targets “coercion to commit fraud.” Jeff Hamby: Initially, it was 15%. They kept trying to up it. Kroft: They didn’t care how you got there? They just wanted you… Hamby: Wanted us to hit the benchmark, arbitrary benchmark. Kroft: They’re saying, “you will admit these people, whether they’re sick or not, whether they need to be hospitalized?” Hamby: Correct Alford: Uh-huh. Cloonan: They never phrase it that way. They did say “admit 20%.” The reality of that is that there’s only one way that that can happen, and that is if it is arbitrary. That is, if you do admit patients that don’t need to be admitted. Rankin: For patients who were 65 and over, the benchmark was 50%. Kroft: Those would be medicare patients? Rankin: Correct. Kroft: You’re saying it’s not a good idea to admit half the patients over 65? Cloonan: If you are put into the hospital for reasons other than a good, justifiable medical reason, it puts you at significant risk for hospital- acquired infections and what we would refer to as “medical misadventures.” Kroft: These stories are echoed in many of the thousands of documents we examined, including emails like this one from a hospital executive in durant, oklahoma, pressuring her staff during emergency room shifts. “Only 14 admits so far! Act accordingly…” And this e-mail from an e.R. Director at an h.M.A. Hospital in south carolina to a new emergency room doctor. “Every time a 65-year-old or older comes in, I am already thinking, ‘do they have some condition I can admit them for?'” “we are under constant scrutiny. I will be blunt, I have been told to replace you if your numbers do not improve.” In your dealings with h.M.A., did you ever get any sense that this was commercially driven? Hamby: Of course. I cant imagine any other explanation to admit a percentage. Alford: The administrators said that daily, frequently. “You know, we don’t make any money if we do this. We make more money if we do that.” Kroft: Admit more patients? Alford: Admit more patients, keep them longer. Money was the chief motivator. Kroft: You’re all saying this was codified, institutionalized at h.M.A.? Rankin: Absolutely, this was… This was a well thought- out plan. It even relates to how they had control over us as emergency physicians. Kroft: That control, they say, was exerted with corporate- wide computer software called promed which was installed in every emergency room. H.M.A. Says it was designed and approved by meexperts to improve the quality of patient care. But doctors, nurses, emergency room directors, and hospital administrators told us that h.M.A. Customized the program to automatically order an extensive battery of tests, many of them unnecessary, as soon as a patient walked into the emergency room. Hamby: The minute the chief complaint and their age was placed into that computer, that system ordered a battery of tests that was already predetermined. Rankin: This was prior to being seen by the treating physician. And we would look at the chart and say, “why was all this ordered? Kroft: The computer program also generated printed reports like this one, evaluating each doctor’s performance and productivity. On this document, the doctors who hit corporate admissions goals received praise from company managers; those who didn’t knew it. Cloonan: The primary purpose of the scorecard was to track how you were doing in terms of revenue generation, based on number of tests ordered and number of patients admitted to the hospital. Rankin: It has nothing to do with patient safety and patient care. It has everything to do with generating revenues. Kroft: They say that when a doctor decided to send an emergency room patient home, the computer would often intervene, prompting the doctor to reconsider. Hamby: The minute I hit “home,” it says, “qual check.” And then it comes up with a warning: “This patient meets criteria for admission. Do you want to override?” Kroft: What was the reaction from the administrators if you overrode the computer? Hamby: It was like being called to the principal’s office. Cloonan: Mind you, this is coming from a non-physician, somebody who never went to medical school, never did a residency– frankly, has never seen or treated a patient– is telling a physician how they should be taking care of a patient and making decisions related to a patient. And my blood pressure’s going up just saying this. Kroft: In august, a former executive vice president of the hospital chain, john vollmer, testified under oath in a deposition that h.M.A.’S aggressive admission policies came directly from the top, c.E.O. Gary newsome. John Vollmer: Mr. Newsome’s thought was that an average of 16% was accomplishable at all hospitals or more, and we should seek to do that and make that happen. Kroft: Vollmer, who was also fired by h.M.A., Became angry when the company lawyers challenged him. Vollmer: I did my duty by informing h.M.A. That what they are doing is wrong. You can’t require them all to have 16% admission rates, and beat up doctors and administrators and all these folks over it when you are doing it to increase your revenue for the facility. I’m going to move to strike what you just said. Kroft: We wanted to talk with gary newsome, health management associate’s c.E.O., But instead, we were given h.M.A. Executive vice president alan levine, who joined the company just two years ago. Levine says the allegations are coming from disgruntled employees. And if they were true, he said, it would be reflected in the admissions data. He says admission rates haven’t changed in four years, and are near or below industry averages. The allegations have to do with you taking people who shouldn’t be admitted to the hospital and putting them in the hospital. Alan Levine: Those allegations are absolutely wrong. Kroft: H.M.A. Doesn’t set quotas for hospital admissions. Levine: No. Kroft: H.M.A. Never told emergency rooms that they needed to admit a certain percentage of people that came in? Levine: We tell them collaboratively that our goal is to make sure the patient gets in the right setting. It… We don’t want a patient going home that should be admitted. We don’t want a patient admitted that shouldn’t be admitted. Kroft: I’ve got some documents here from durant, oklahoma. We showed levine this physician performance review from the h.M.A. Hospital oklahoma, which had been given to us by a doctor there. It prominently shows an admission goal of 20%. It says there on the right hand side, “goal, 20%.” And it shows the lights. The reds show people who are not actually meeting their goal. Levine: Well, first of all, I’ve never seen this document, so I can’t… I mean, you… The… I can tell you right now, as a company… Well, there’s a lot of things on this form, steve. We look at testing guidelines. There’s a lot of quality metrics on here, steve. We measure all of this stuff… Kroft: Yeah, but there… We have here one whole column, “goal.” Levine: That’s not… Kroft: “Goal.” Levine: That’s not… That’s not from our company, steve. I don’t know where that came from. Kroft: It’s not from your company? It’s… I don’t… One of your hospitals. Levine: Steve, we don’t have any kind of goals. I don’t know what the percent admissions are at that hospital. Maybe they are actually 20%, but the… The admissions goal at any hospital is driven only by what the normal trend is for that hospital. Kroft: We talked to a hundred people who say that there was pressure from the corporate level to admit people. Are they all lying? Levine: Steve, we have one goal. And… And… And I’m not going to… I’m not… I’m not going to judge anybody else. Our goal is… I… Each and every patient that comes into the hospital is a unique and special circumstance. Kroft: Hardly anyone we talked to complained about the quality of care at h.M.A. Hospitals, only the quantity of care. And we were not the first to raise the subject of inappropriate admissions with corporate executives. Paul meyer raised the allegations several years ago. At the time, he was director of compliance with h.M.A., Charged with inspecting and auditing its hospitals to make sure they were following state and federal laws. Meyer is a former 30-year veteran of the f.B.I., Whose last assignment had been supervising medicare fraud in miami before he joined h.M.A. H.M.A. Has said that their admission policies are designed to improve the quality of care for the patients. Do you believe that? Paul Meyer: Based on my experience, i… I can’t believe it. Kroft: What do you think they’re based on? Meyer: I think they’re based on profit. Kroft: Meyer says he reached that conclusion in 2010 after hearing complaints from emergency room doctors, case workers, and hospital administrators. They said they were being pressured to fill beds with people who did not need to be admitted to the hospital. Meyer says he audited four hospitals in texas, florida, and oklahoma, and concluded that h.M.A. 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. Did you think it was medicare fraud? Meyer: Yes. Meyer: They’re submitting bills to the government for the admission of patie the patients didn’t meet the appropriate prescribed criteria for admission and for the hospitals to bill medicare for the admissions. It’s… It’s a… A false billing, if you will. Kroft: If you’d been at the fbi and somebody came in and handed you all of this stuff, would you have pursued a criminal investigation? Meyer: Yes. No doubt about it. Kroft: Meye he told the same thing to corporate officials and wrote up his findings in three memos to top management. Meyer: I made sure that i spoke with the c.E.O. Face to face about this, that something is really, really wrong, and it’s got to be addressed. I had indicated that “if it’s not addressed by you all, then I’ll have to handle it getting addressed by the government.” Kroft: What was their response? Meyer: Had another job change. Kroft: Meyer says hma’s corporate attorneys heavily edited his reports and instructed him to destroy the original version of his memos, but he never did. Meyer: I felt it was evidence. These people are changing my write-up of what I found, softening it up, excising out things, labeling it as attorney/client privilege when it wasn’t. And I felt certain they’re trying to cover this up. Kroft: He was eventually fired and is now suing h.M.A. For wrongful termination. What are we supposed to make of… Of these allegations that have been raised by… By paul meyer? He says this company’s guilty of medicare fraud. Levine: Well, we’ll let… We’ll let the proper authorities be the judge of that. Okay, we feel that we are doing the right thing for our patients. It’s not mr. Meyer’s place to decide guilt or innocence. We investigate anything that’s reported. And if we find a problem, we… We fix it. Kroft: Are you saying that paul meyer doesn’t recognize medicare fraud when he sees it? Levine: I think his assertions were not accurate. I think he provided incomplete information in the course of doing his own investigations. But it… At the end of the day, I’m not going to question mr. Meyer. Our goal is to get it right. Kroft: H.M.A. Says it hired an outside law firm to investigate meyer’s allegations, and that there was no finding that would support an allegation of fraud, adding that any overpayments from medicare and medicaid were rectified. But paul meyer is the least of h.M.A.’S problems right now. The hospital chain is currently under investigation by the justice department, which has subpoenaed records pertaining to the management of its emergency rooms and its computer software program, promed, which h.M.A. Has stopped using. The hospital chain says it is cooperating fully with the investigation and has nothing to hide. feelingembarrassed

28 thoughts on “Hospitals: The cost of admission

  1. obamacare or note i don't think is the core root of the problem. the problem being is we have turned the health industry into a big business and in business the overall goal to make money and health care/ meda care (the way we have it structured) it allows large health care company's to shake down the system all the way to small town docs can do it.

  2. The biased news media!!!!! We might as well live in Russia! We had Humana insurance for my mom! Had to get the state A/G on the line just to back the dr.s WANTING to admit her! Go investigate our crooked Congress!

  3. Think this is badd, the same Fraudsters & Crooksters have also INVADED the Vetinary health care business, now taking your Canine to the Vet/ Hospital will cost you the price of a good used/ new vehicle. you can't even get decent honest reliable Health care for your Pet anymore without getting taken to the Cleaners !

  4. Remind me of the old bait and switch tactic hospitals use to fraudulently charge preliminary detainees in custody for medical services they didn't consent too, highly illegal.

  5. I use a medical supply company and I know for a fact that they bill my insurance company for thing they said I got but I didn't so I let my insurance company know they got took and they honestly didn't seem to care…

  6. I use a medical supply company and I know for a fact that they bill my insurance company for thing they said I got but I didn't so I let my insurance company know they got took and they honestly didn't seem to care…

  7. I wish hospitals were like car garages. You go to the hospital and they tell you the cost of diagnosis before doing anything. You accept it or not. If you decide to go through with the diagnosis you get the diagnosis and afterwards you get a root cause of your problem. Then you get a cost for any procedure to fix the root cause before done so you can decide if you want it done or not. I wish the cost would be up front before any action done. Face it, doctors, administrators, nurses, technicians all are providing a service, and that service cost can be given up front.

  8. Basically revenues can be generated in one of two ways, volume or rate, volume being the number of admissions, as clearly illustrated in this report, or outrageously inflated fees for everything from Kleenex to a heart-lung bypass. Each facility uses either admissions or the mysterious "chargemaster" rates to bolster revenue … and each are as fraudulent as the day is long.

  9. Yep I knew it hospitals are run by thugs. Don't matter if you got Medicare or medicade they'll send their collections thugs after you to squeeze every last drop of money out of you. Never go the ER!

  10. Old folks got enough bills hospital ceo's & those right below them are thugs, they're nothing but thugs, when will there be laws against this.

  11. why is it legal for hospital to nill mr for involuntary stay, they kept me as imvoluntary for 8 days. now i have that debt on me, i need that money to pay for the Eylea treatments saving me from blindness macular degeneration

  12. When I was young they got old people to sign over their houses. I am sure that still goes on. Especially Chatholic hospitals. They are evil. Hippa as a parent can't get any answers. 2 weeks later your child is in a body bag, even your child walked in. Fraud. Evil. Big $$$$$ in body bags and organs.

  13. I hate america so much. We are suppose to be the greatest country in the world, yet no free health care? This is so comical its surreal

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