US Rep. Urges HHS to Investigate Medicare Fraud Scheme by HCA

US Representative Bill Pascrell, Jr. (D-NJ-09), Chairman of the House Ways and Means Subcommittee on Oversight, has asked HHS to investigate a possible billion-dollar Medicare fraud scheme committed by the HCA Healthcare chain.

In a letter to HHS Secretary Xavier Becerra, Pascrell referenced reporting identifying potential fraud and staffing issues at HCA facilities. According to the report, HCA emergency departments admitted patients for inpatient stays regardless of medical necessity, leading HCA to charge Medicare an excess of $1.8 billion between 2008 and 2019.

In addition, there have been allegations that HCA sets corporate admission targets and regularly threatens retaliation against staff if the targets are not met, Pascrell wrote.

These admission targets may result from HCA’s joint venture with EmCare, a subsidiary of Envision Healthcare. In 2017, Envision entered into a federal settlement to resolve similar allegations of unnecessary emergency department admissions tied to its contracted physician services provided to the hospital chain Health Management Associates (HMA).

As a result of the settlement, EmCare entered a corporate integrity agreement. Pascrell voiced concerns that the joint venture between EmCare and HCA is engaging in the same illegal conduct that EmCare and HMA allegedly did.

HCA is the largest health system in the country and generated almost $7 billion in profits in 2021, signifying an increase of nearly 100 percent in one year.

The recent findings identifying potential fraud are particularly concerning due to HCA’s history of healthcare fraud settlements, the letter noted. For example, in 2002, HCA settled for $1.7 billion to resolve criminal counters and civil fraud allegations. This was the largest healthcare fraud case in the US at the time.

The letter referenced academic research supporting the claim that Medicare patients are more likely to be admitted to the emergency department at for-profit hospitals compared to nonprofit facilities. The research pointed to HCA Florida facilities as hospitals that admit more patients than expected, given patient diagnoses and other factors.

Additionally, HCA is owned by a private investor group, which is associated with high levels of overutilization of healthcare services. Private equity motives focused on profits may also lead to taxpayer dollars being diverted from patient care, the letter stated.

Pascrell also mentioned how improper hospital admissions can negatively impact patients and staff. Patients may experience unnecessary treatments, creating a potential risk of complications and new infections.

Unnecessary admissions increase the burden on hospital staff, who are already dealing with workforce shortages. HCA’s average staffing levels are 30 percent behind the national averages, the letter noted.

HCA hospitals have faced concerns about care quality due to low staffing levels, including infection control breakdowns, preventable patient deaths, and at least one hospital being threatened with termination from Medicare.

Pascrell recently penned a separate letter to Samuel Hazen, the chief executive officer of HCA, regarding the potential fraud.

Pascrell requested several pieces of information from Hazen by September 27. He asked for descriptions of all incentives for physicians practicing in HCA facilities relating to the admission or referrals of inpatients, all data collected related to physician performance, and a description of the company’s internal audit or other review processes used to ensure that care is medically necessary.

He also requested documents that include details about staffing levels and employee salaries.

HCA has faced several legal battles in the past couple of years.

In August 2020, the Service Employees International Union-United Healthcare Workers West filed a lawsuit against HCA and Riverside Community Hospital, alleging that the facilities recklessly facilitated the spread of COVID-19 by forcing sick employees to work shifts despite showing symptoms of the virus.

In addition, an HCA hospital in North Carolina faced an antitrust lawsuit in August 2021. Plaintiffs alleged that Mission Health raised prices after merging with HCA and used all-or-nothing arrangements when negotiating rates with private payers in the area.