Reuters shows how shell companies hide Medicare fraud in plain sight
Filed under: Government, Health care reform, Health data, Health journalism, Hot Health Headline, Public records
Reporting for Reuters, Brian Grow and Matthew Bigg used an analysis of public data to investigate the practice of using shell companies to defraud Medicare of millions while staying a step or two ahead of federal investigators.
While the specific damage inflicted by shell companies has not been tracked, “Last year, ‘improper payments’ resulted in $48 billion in losses to the Medicare program, nearly 10 percent of the $526 billion in payments the program made, according to a Government Accountability Office report last March.”
“Simply by reviewing the incorporation records of Medicare providers in two buildings” in Miami, they write, “reporters uncovered information that one government official said could prompt “a serious criminal investigation” of some of the companies.”
The fraud rings merge stolen doctor and patient data under the auspices of a shell company and then bill Medicare as rapidly as possible. Other shell companies are often layered on top to camouflage the fraud, law enforcement officials say.
Some of the shells purport to be billing companies; they form a buffer between the sham clinics and Medicare. Others pay kickbacks to doctors and patients who sign off on bogus medical claims or sell their Medicare ID numbers to enable the shell company to bill the government. Still other shells act as fronts to launder the profits.
The key to this kind of fraud, known as a “bust-out” scheme, is for each of the fake companies to bill as much as possible before authorities catch on. Shell companies become a tool that helps keep the crooks ahead of the cops.
The Armenian crime ring whose fraud made headlines last year used 118 shell companies in 25 states and bilked the feds out of at least $100 million. Varying incorporation rules make state-hopping and obfuscation “easy,” they write, especially since states don’t check to see if records are legit before they allow a company to incorporate. The reportes found that even a few simple safeguards would go a long way to detecting the boldest frauds.
In Florida, FBI agents say almost every Medicare fraud scheme involves shell companies. There, Reuters scrutinized incorporation documents for firms located in two buildings near the Miami International Airport. In a building with dimly lit corridors, a rickety elevator and almost no one in sight, a host of companies purport to provide services to Medicare recipients. But telltale signs of fraud abound.
Many of the 26 companies in the buildings had replaced corporate officers at least once in the last four years. Some had changed ownership, or their corporate executives represented more than one medical-related company. Law enforcement officials consider such activities to be red flags for fraud.
For its part, CMS told the reporters it simply didn’t have the resources necessary to conduct the widespread audits needed to catch fraud, though the $350 million allocated to such efforts under the 2010 health reform law should help.
Health journalists who will certainly want to review the “methodology” subheading at the end of the story.
Project looks at problems in how deaths are investigated
Filed under: Aging, Conflicts of interest, Health data, Health policy, Hot Health Headline, Public health, Public records
The results of a yearlong joint investigation of the American autopsy system by ProPublica, Frontline and NPR show that problems in the death investigation system throughout the country have led to innocent people being sent to prison, “allowed the guilty to go free and left some cases so muddled that prosecutors could do nothing.” When autopsies aren’t done, diagnostic errors go undetected and opportunities to learn more about medicine are lost.
One story of patient rights and legal wrangling sports the remarkable headline “Why Can’t Linda Carswell Get Her Husband’s Heart Back?” It hinges, among other things, on the simple fact that “Even though the Institute of Medicine has reported that medication errors affect an estimated 1.5 million patients per year, it is not typical to conduct toxicology tests as part of clinical autopsies. They are routine in forensic autopsies.”
Another piece takes a broader view, exploring the reasons behind and consequences of the fact that autopsies are performed on only about one in 20 patients who die in hospitals when, 50 years ago, the rate was one in two.
Hospitals aren’t required to perform autopsies – the Joint Commission hasn’t included autopsy rates in its accreditation process since 1971 – and neither Medicare nor private insurers reimburse hospitals for the procedures, which Allen found cost about $1,275 each. The implications of these financial disincentives, combined with related factors such as some physicians’ confidence that new diagnostic tools such as MRIs and CT scans provide such accurate results that they obviate the need for postmortem work, are far-reaching.
Diagnostic errors, which studies show are common, go undiscovered, allowing physicians to practice on other patients with a false sense of security. Opportunities are lost to learn about the effectiveness of medical treatments and the progression of diseases. Inaccurate information winds up on death certificates, undermining the reliability of crucial health statistics.
Furthermore…
A 2002 review of academic studies by the federal Agency for Healthcare Research and Quality found that when patients were autopsied, major errors related to the principle diagnosis or underlying cause of death were found in one of four cases. In one of 10 cases, the error appeared severe enough to have led to the patient’s death.
Other stories in the project report that suspicious deaths of the elderly are rarely investigated and that the deaths of children “pose special technical challenges for forensic pathologists.”
Watch the full episode. See more FRONTLINE.
Tsouderos looks at federal funding of alternative medicine
Filed under: Government, Health care reform, Health policy, Hot Health Headline, Pharmaceuticals, Public health
In her latest series, Chicago Tribune reporter Trine Tsouderos, whose award-winning reporting has brought her hard-nosed approach to investigating less-proven areas of medicine, which will be familiar to many members, to bear upon the federal government.
This time, her target is the National Center for Complementary and Alternative Medicine, which she calls “a small, little-known branch of the National Institutes of Health … launched a dozen years ago to study alternative treatments used by the public but not accepted by mainstream medicine.” According to Tsouderos, the center has spent $1.4 since its inception, some of it on curious projects.
A Tribune examination of hundreds of NCCAM grants, dozens of scientific papers, 12 years of NCCAM documents and advisory council meeting minutes found that the center has spent millions of taxpayer dollars on studies with questionable grounding in science.
You’ll want to read it for yourself, but highlights include sentences such as “The cancer treatment involving coffee enemas was based on an idea from the early 1900s, and patients who chose to undergo the risky regimen lived an average of just four months” and “Thanks to a $374,000 taxpayer-funded grant, we now know that inhaling lemon and lavender scents doesn’t do a lot for our ability to heal a wound.”
It’s not all just cherry-picking wacky studies, of course. Tsouderos also looks deep into the powerful alternative medicine industry as well as the scientific rigor, or lack thereof, that sits at its core.
Medicaid programs slow to act against system exploiters
Filed under: Conflicts of interest, Health data, Hot Health Headline, Public records
At ProPublica, senior reporters Charles Ornstein and Tracy Weber have published the latest turn in their ongoing analysis of conflicts of interest, problem physicians and the disciplinary systems meant to reign them in. This time, they look at Medicaid in Florida and find at least three instances when the state “allowed physicians to keep treating and prescribing drugs to the poor amid clear signs of possible misconduct.”
Their piece revolves around those key examples – two of which were, in all seriousness, brought to their attention by a Scientologist-run watchdog website – and I strongly recommend you read the whole thing for the details. Below, I’ve just highlighted the bigger picture.
In general, Ornstein and Weber found, state Medicaid programs, as well as the federal Centers for Medicare and Medicaid Services, which doesn’t track relevant state data, have failed to act on information which seems to strongly indicate that certain physicians are abusing or exploiting state programs.
Medicaid programs across the country have long had evidence that physicians have been prescribing risky drugs in excess and perhaps to the wrong patients. These prescriptions also racked up huge bills for the programs.
But like Florida, many states did not act on that evidence. Last year, (Sen. Charles) Grassley demanded data from each state about its highest prescribers of pain pills and antipsychotics, and he asked state and federal officials to determine whether the prescriptions written by these doctors were legitimate.
Feds indict doc whose abuses were detailed in 2010 WSJ series
Filed under: Government, Health data, Health journalism, Public records
In The Wall Street Journal, John Carreyrou reports that a physician the paper spotlighted in a data-driven series on Medicare abuses has now been “indicted by a federal grand jury … for allegedly submitting more than $13 million of false claims.”
The article marks the first time the Journal has been able to print the physician’s name (Emma Poroger), even though they’ve been aware of it for more than a year.
The Journal identified Dr. Poroger, a doctor of osteopathy, as having suspicious billing patterns by mining the Medicare claims database, a computerized record of every bill submitted to the program. But her name was withheld in the October 2010 front-page article because Medicare keeps information pertaining to individual doctors confidential under a three-decade-old court injunction.
That injunction stems from a 1979 lawsuit filed by the American Medical Association, the doctors’ trade group, to keep secret how much money physicians receive from Medicare. At the time, the court said doctors’ privacy trumped the public’s interest in knowing how tax dollars are spent.
The Journal’s publisher, Dow Jones & Co., filed court papers this year seeking to overturn the injunction. In September, a federal judge in Florida ruled that Dow Jones’s case could proceed.
Carreyrou also called out a few other physicians featured anonymously in the series whose names had also been made public in various official proceedings.
Related
- Effort to make Medicare data public advances
- WSJ exposes flaws of Medicare’s pay now, investigate later culture
- WSJ explains why Medicare data is hidden
Docs with Medtronic ties failed to disclose cancer case in trial report
Filed under: Conflicts of interest, Hot Health Headline, Public records
In the latest installment of his ongoing investigation for the Milwaukee Journal Sentinel and MedPage Today, John Fauber reports his discovery that physicians writing up a large-scale 2009 study “failed to identify a significant cancer risk” associated with Medtronic’s Amplify, a BMP-2 spine surgery product. At the same time, Fauber observes, Medtronic paid those same physicians millions.
The company and doctors had become aware of information on an additional cancer case, which pushed the concern to a critical level, at least two months before the paper was published, a Journal Sentinel/MedPage Today investigation found. Independent researchers say they had an ethical duty to report the cancer risk.
…
The researchers had information showing that at two and three years after being implanted with the genetically engineered protein, significantly higher numbers of Amplify patients were being diagnosed with cancer, but they did not report it on their paper.
In addition to interviews with experts and ethicists, Fauber’s investigation was heavily informed by his review of federal documents.
The Journal Sentinel found a full airing of the cancer question in more than 1,000 pages of U.S. Food and Drug Administration records. That information included FDA reports and information filed with the agency by Medtronic as part of its application to win approval for Amplify.
Fauber’s Medtronic coverage is a joint project between the Milwaukee Journal Sentinel and MedPage Today.
Public hospitals, not nonprofits, shoulder burden of charity care
Filed under: Health data, Health journalism, Hospitals, Hot Health Headline, Member news, Public records
Writing in the Contra Costa Times, Sandy Kleffman reports that while nonprofit hospitals in the East Bay are given millions in tax breaks, “The responsibility of caring for the indigent falls largely on the region’s public hospitals.”
Kleffman’s findings are based on her analysis of publicly available California Office of Statewide Health Planning and Development reports, documents which she learned to access and process at a September webinar led by AHCJ board president and ProPublica senior reporter Charles Ornstein.
Her analysis revealed a substantial imbalance in the numbers, especially between public hospitals and nonprofits. For example, Contra Costa’s county hospital provided more than three quarters of the total amount of charity care given in the country in 2010, while the six nonprofits together accounted for just under 23 percent.
For their part, representatives of nonprofit hospitals protested that the numbers do not take into account the other community benefits they provide, nor are they adjusted to compensate for the differences in demographics across each institution’s patient pool.
For more on what went into Kleffman’s report, see her sidebar on “How we made comparisons.”
Dallas reporters use AHRQ data to measure patient safety
Filed under: Health data, Health journalism, Public health, Public records, Tools
The Dallas Morning News continues its 19-month investigation into patient safety at UT Southwestern Medical Center and Parkland Memorial Hospital.
The project, “First, Do No Harm: An investigation of patient safety in Dallas hospitals,” is behind the website’s paywall but The Dallas Morning News has granted AHCJ members access. To find out how to access the stories, please click here and log in as an AHCJ member.
Among the latest reporting:
Dallas Morning News reporters Ryan McNeill and Daniel Lathrop took advantage of AHRQ’s Patient Safety Indicator (PSI) software, typically used internally by hospitals, to process 9 million publicly available patient records from Texas hospitals, all of which came from between
Parkland, the prominent local hospital that has earned scrutiny on numerous prior occasions, was just the most notable of a number of area hospitals that came up short (and generated headlines), but our interest lies more with the reporters’ investigative methodology as well as the path they’ve blazed for broader hospital quality reporting.
All their work was done in consultation with experts in the field, including academics, government officials and hospital administrators. An outside review indicated McNeill and Lathrop used the software properly, and their results were in line with a similar public analysis. But that’s not to say it was a simple process.
The newspaper spent six months analyzing nearly 9 million state hospital discharge records using Patient Safety Indicators, or PSI, software. This highly sophisticated system was designed for the federal government as a tool to measure potentially preventable complications among hospital patients.
The PSIs do not present a complete safety picture because they are based on administrative data — a summary of diagnoses, procedures and outcomes derived from patients’ medical charts, as opposed to a complete review of all medical records.
It’s not a perfect measure, but it’s one of the best available.
PSIs “reflect quality of care inside hospitals,” according to the Agency for Healthcare Research and Quality, a division of the U.S. Department of Health and Human Services. It released the PSI software in 2003 and periodically updates it, most recently in August. The News used that version for its final analysis.
The software analyzes the administrative data that nearly every hospital in Texas reports to the state. No patient-identifying information is included.
The results on 15 PSIs are statistically “risk-adjusted” because some hospitals treat a disproportionate share of unhealthy patients, who face a greater risk of potentially preventable complications. Rates from eight of the indicators are used to determine a hospital’s patient safety “composite score.”
The AHRQ has just started posting some PSI measures on Hospital Compare, and the Texas health department plans to follow suit in 2013, but reporters looking to get their hands on a broader swath of the data will still have to follow the Dallas duo’s do-it-yourself approach.
The reporters’ work drew criticism from the Texas Hospital Association, which said the methodology was “not intended for use in public reporting.” McNeill refutes its claims in a blog post. Daniel K. Podolsky, president of UT Southwestern Medical Center, also sent a letter criticizing the reporting. George Rodrigue, managing editor of The Dallas Morning News, published a point-by-point response to Podolsky’s letter.
Medicare providers get reinstated when feds fail to attend hearings
Filed under: Health care reform, Health data, Health journalism, Health policy, Public records
Using data obtained through a public records request, Associated Press reporter Kelli Kennedy (@kkennedyap) reviewed federal Medicare fraud reports from between 2006 and 2009 and found that “Regulators fighting an estimated $60 billion to $90 billion a year in Medicare fraud frequently suspend Medicare providers, then quickly reinstate them after appeals hearings that government employees don’t even attend.”
Officials revoked the licenses of 3,702 medical equipment companies in the fraud hot spots of South Florida, Los Angeles, Baton Rouge, La., Houston, Brooklyn, N.Y., and Detroit between 2006 and 2009, according to data provided to the AP under a public records request. Those areas represent the highest concentrations of Medicare fraud in the country, according to federal authorities who have set up task forces there.
Of the providers who lost their licenses in those cities, about 37 percent, or 1,371, were eventually back in business, sometimes within days and often within months.
Furthermore, she writes, officials have not taken advantage of security bonds put in place two years ago to provide redress should a fraudulent provider vanish from the map. “Officials blame the delay on personnel changes,” she writes.
The gaps in the system grow out of poor communication between one set of contractors paid to inspect Medicare providers and alert officials to suspicious activity; a separate set of contractors that handles payments; and the agency that runs Medicare.
Kennedy’s report dives deep into the Medicare fraud reinstatement program, and reporters looking to better understand the system would be well served to read the full investigation.
Quake damage could cripple Calif. hospitals
Filed under: Health policy, Hospitals, Hot Health Headline
In her series on earthquake preparedness at California hospitals, California HealthCare Foundation Center for Health Reporting senior reporter Deborah Schoch look at what she calls the “Achilles heel” of hospitals in earthquake territory: internal damage to pipes and equipment.
While much of the legislative focus has been on preventing structural damage, Schoch writes that recent seismic disasters in places such as Chile and Japan have demonstrated that a broken water pipe or sprinkler system can shut down a hospital every bit as effectively as a crumbled wall.
To better avoid internal damage, Schoch writes, hospitals need to bolt down equipment, anchor water tanks and set up back-up generators. According to Schoch, “Many facilities locally and statewide are still years or decades away from making those non-structural internal fixes, even though they are required under California law.” This is largely thanks to a variety of deadline extensions and loopholes requested by cash-strapped hospitals which refer to the law as the largest unfunded mandate in state history.
As of 2009, fully 1,357 hospital buildings statewide had not made fixes that should have been finished at the start of 2002, according to a December 2009 report from state regulators.
Another 1,233 buildings, or 95 percent of buildings statewide, had not yet done improvements that were due Jan. 1, 2013, according to the report. State officials caution that some hospitals may have completed upgrades, but they do not have up-to-date statistics.
In the second installment of the series, Schoch uses state records to show that more than 40 hospitals close to the fault are rated at high risk of collapse in a major earthquake.
California hospitals were supposed to have fixed hospitals by 2008 or the state would shut them down. But that deadline has been pushed back multiple times: “Championing the delays, the state Legislature repeatedly extended the 2008 deadline to 2013, 2015, even 2020, under pressure from hospitals that said they can’t afford the fixes.”
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