NEWS
November 28, 2022

Congress Calls For Federal Investigation Into HCA on Fraud Allegations

Congress Calls For Federal Investigation Into HCA on Fraud Allegations

Updated on 11/28/2022 to include a statement from HCA. 

Original article published on 11/22/2022

The federal government may launch an investigation into HCA, the largest for-profit healthcare company in the United States on allegations of fraud. 

HCA is one of the largest for-profit healthcare chains in the United States, with more than 180 hospitals. They also own health clinics for wound care, behavioral health, and surgery centers all over the U.S. Their recent profits are around $7 billion annually (according to their 2021 metrics).  

Recently, the House oversight committee asked for a federal probe or investigation into HCA for allegations of widespread fraud, specifically regarding their emergency department admissions. Allegations include,

  • Admitting patients who didn’t need emergency care

  • Having corporate admission targets

  • Understaffing

  • Preventable patient deaths 

Medicare Fraud Allegations

In a letter from Bill Pascrell, the chair of the oversight committee, he claimed that HCA had accrued $1.8 billion in excess revenue from Medicare from the unnecessary admissions to the E.D. He goes on to mention that “HCA’s average staffing levels trail the national average by 30 percent.” The letter was sent to HCA Healthcare CEO Samuel Hazen requesting documents to explain the numbers by providing supporting material. 

>>Read the letter here

The overcrowding with unnecessary admissions and short staffing ratios leads to risk for subpar patient care that has led to “preventable patient death and infection control breakdowns,” Pascrell further explained in his letter. 

In another letter, Pascrell wrote to the U.S. Department of Health and Human Services explaining the need for further investigation. One of the HCA hospitals is currently at risk of being terminated from the Medicare program, and complaints from workers in HCA facilities have prompted the investigation of fraud.  

>> Read the letter here

The letter further explains that the complaints from HCA workers included retaliation threats if admission goals are not met and that the emergency care is handled by a private emergency practice called EmCare to provide emergency physician staffing. Pascrell also points out current peer-reviewed research involving an HCA facility and other for-profit hospitals, supporting that Medicare patients are more often admitted to emergency departments at for-profit hospitals than in non-for-profit hospitals.  

Former Settlements

This isn’t the first time HCA Healthcare has been accused of fraudulent activities. HCA has the record of the largest healthcare fraud case ever taken by the Justice Department. So far, the government has recovered $1.7 billion from HCA Healthcare.  

"Health care providers and professionals hold a public trust, and when that trust is violated by fraud and abuse of program funds, and by the payment of kickbacks to the physicians on whom patients and the programs rely for uncompromised medical judgment, health care for all Americans suffers," Robert D. McCallum, Jr., Assistant Attorney General for the Civil Division said."

This settlement brings to a close the largest multi-agency investigation of a health care provider that the United States government has ever undertaken and demonstrates the Department of Justice's ongoing resolve and commitment to pursue all types of fraud on American taxpayers, and health care program beneficiaries.

HCA has pleaded guilty and paid fines for several fraudulent activities in the past, including: 

  • Kickbacks to physicians for patient referrals 

  • Unlawful billing and claims to military healthcare programs, Medicare, Medicaid, and Tricare 

  • Fraudulent filing and abuse of program funds 

  • Kickbacks for costs with contractor manufacturers and non-covered medications 

  • Transferring patients for the claim of excess costs 

  • Inflating and false reporting of Medicare costs 

  • Shifting employee salary to increase reimbursement of federal healthcare programs 

  • Shifting home office costs to hospitals costs 

HCA Response

On 11/28/2022, HCA provided the following statement for Nurse.org: 

"The letter from Congressman Bill Pascrell repeats claims made by SEIU and its affiliates (CTW and SOC) over the past few years about emergency department admissions rates. We categorically reject any allegation that physicians admit patients to our hospitals on the basis of anything other than their independent medical judgment and their patients’ individual conditions and medical needs.  There are no HCA Healthcare policies, processes or practices that require physicians to admit patients to our hospitals. 

The allegations made by the SEIU to the Congressman are based upon an invented and false premise and a lazy and manipulative argument. The SEIU has engineered a metric (the “standard” or “average” rate for emergency department admissions) that exists for no other purpose than the public criticism of HCA Healthcare.  It appears that the SEIU used publicly available Medicare claims data and simple math to divide the number of ED admissions by the number of ED visits and arbitrarily deemed the resulting number to be a valid metric or benchmark. 

That metric is, however, not recognized by healthcare providers, experts or academics, and the failure of any hospital, including those operated by HCA Healthcare, to meet that metric is utterly meaningless. Credible and knowledgeable healthcare experts understand that many variables, including community demographics, hospital services, patient needs and acuity, and other related factors need to be considered in any analysis of hospital emergency departments.

That said, even assuming, without agreeing, that the SEIU metric is meaningful, HCA Healthcare hospitals are in line with some of the best in the nation. Using the SEIU’s own methodology for example, of the top 20 US News’ Best Hospitals in 2021, the highest emergency department admission rate was 61% and the lowest was 28%. Comparatively, HCA Healthcare’s national average is on the lower end of that range at 37%.

It seems the information the SEIU presented to Subcommittee Chairman Pascrell was incomplete and intentionally misleading."

Response from Phil Billington, Senior vice president of HCA Healthcare, responded back to the allegations through email, “We found nothing to suggest that E.R. or medical-staff physicians admit patients to our hospitals based upon anything other than their independent medical judgment. None of our contractual arrangements with physicians incentivize them to admit patients to our hospitals.” Read the full response here.

Billington further explains in his email that Quality Improvement Organizations (QIOs) such as the Centers for Medicare & Medicaid Services (CMS) perform their regular reviews on facilities, including HCA facilities, and “reviewed thousands of such admissions to our hospitals, and substantially all were found to be appropriate.“ He continues to point out that HCA has been recognized by Ethisphere as one of the world’s most ethical companies for the 11th time.  

Phil Billington made a statement to Business Journals  that “There are no HCA Healthcare policies, processes or practices that require physicians to admit patients to our hospitals.” He goes on to say that the allegations are “based upon an invented and false premise and a lazy and manipulative argument.”  

Nurse.org has contacted HCA for a statement and will update this article once one is provided. 

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