Jennifer Smithfield felt weak and had trouble breathing in February, nearly two weeks after contracting Covid-19. It was a Sunday, and her doctor’s office was closed. So her primary care physician suggested a trip to the emergency room just to be safe.
Smithfield went to HCA Healthcare’s flagship hospital near its corporate headquarters in Nashville, Tennessee, and thought he would be checked out and sent home. But it didn’t happen.
“Even though I didn’t feel good, I didn’t think it was bad enough to be hospitalized, especially not for multiple days,” Smithfield said.
Within three days, Smithfield charged $40,000 for his inpatient stay and received a bill for $6,000 in terms of his health insurance policy. “I could have walked away,” Smithfield said. “I wish I had gone out.”
While she was in the hospital, she said, the doctor who directed her to the ER texted her repeatedly, asking why she had been admitted.
For more than a decade, large health systems have faced scrutiny for expensively admitting patients to hospitals when less expensive treatment or shorter observation in the ER would have been appropriate.
Commercial insurers pay handsomely for inpatient care, with room rates often hitting several thousand dollars a day — and that doesn’t include charges for blood work, consultations and other tests that inevitably follow. Hospitals, like hotels, maximize revenue by keeping their beds full.
Critics charged that the HCA sought to keep occupancy rates high by creating incentives for doctors to admit ER patients — whether those patients needed admission or not. The complaint is particularly surprising because admission rates nationally are generally declining as more conditions can be safely treated with telemedicine and home monitoring.
US Rep. Bill Pascrell (DN.J.) and the Service Employees International Union are pushing the Department of Health and Human Services to investigate allegations of possible Medicare fraud against HCA. Bruce Alexander, a spokesman for the Centers for Medicare and Medicaid Services, said the agency is reviewing a September letter from Pascrell detailing claims that the HCA forced doctors to meet informal quotas, or targets, for the number of hospitalized patients. And previously sealed whistleblower cases are shedding new light on such internal policies.
“Inappropriate hospitalizations can have cascading effects on patients and staff,” Pascrell, chairman of the House Ways and Means Oversight Subcommittee, wrote to HHS Secretary Javier Becerra. “Unnecessary admissions expose patients to unnecessary treatment. This creates an additional potential risk of complications and the possibility of new infections for patients.”
HCA spokeswoman Harlow Summerford denied the allegations. “We categorically reject any allegation that physicians admit patients to our hospital based on anything other than their independent medical judgment and their patients’ individual conditions and medical needs,” he said in a statement to KHN.
Pascrell’s concerns are based largely on a 58-page investigative report from SEIU released in February. The National Labor Union has been challenging the health system on admissions for more than a decade as it tries to organize more profitable hospitals and advocate for its members who work on the front lines. SEIU estimates that HCA has overcharged the Medicare program by at least $1.8 billion through overadmissions over nearly a decade, according to the report.
Claims against HCA are similar to SEIU’s that led to $98 million settlements with community health systems in 2014 and $262 million in 2018 with health management associations. The government alleged that hospitals knowingly billed for inpatient services when lower-paying outpatient or observational services were warranted.
The government is in the best position to prove such claims, said Jacob Tubbs, an attorney in Birmingham, Alabama, whose law firm, Price Armstrong, has represented plaintiffs in similar cases against hospitals. But he noted that it is difficult to prove that doctors have voluntarily and systematically deviated from today’s standard of care. It is particularly difficult to show that a patient was overtreated.
Lawyers still have a “healthy amount of skepticism” about their chances of winning the case, he said. “We know that ultimately what we have to prove is that the medical care was objectively unnecessary.”
In a 141-page court filing in 2018, Dr. Camilo Ruiz, a whistleblower at a 400-bed HCA hospital in suburban Miami, accused the health system of threatening his job unless he admitted more patients, rather than sending them home. From the ER. HCA supervisors warned her to start meeting established goals, she said in court documents.
Ruiz’s attorneys used publicly available Medicare data to show that HCA hospitals nationwide routinely admit patients for low-grade ailments such as abdominal pain, lower respiratory problems, dizziness and nausea while non-HCA hospitals send patients home with the same conditions.
The 41 HCA hospitals located in Florida, Texas, Nevada, Virginia and California had the highest admission rates – attorneys found that from 2013 to 2016, 84% of Medicare patients were admitted for eight common diagnoses, compared to 55% at non-HCA hospitals.
The Ruiz case was unsealed in 2020 after the federal government declined to investigate. The Justice Department — which has intervened in similar cases that led to settlements — did not explain in court records why it passed on the Ruiz case and declined to comment to KHN.
Ken Nolan is an attorney at Nolan Auerbach & White, a firm based in Fort Lauderdale, Florida, and has successfully represented whistleblowers in fraudulent hospitalization allegations. Nolan said the government sometimes rejects cases for reasons other than lack of evidence.
SEIU continues to press the government to investigate its extensive allegations against HCA The union included data from the Ruiz suite in reports it procured to government agencies, including the Securities and Exchange Commission.
In addition to asking HHS to investigate, Pascrell sent a letter directly to HCA’s CEO, Sam Hazen, demanding an explanation for the higher enrollment numbers.
As the nation’s largest hospital company, HCA sets the pace for the US healthcare system. Its profits are approaching $7 billion in 2021 even as other health systems struggle through the tailwinds of the pandemic.
For Smithfield, his expensive hospitalization didn’t just threaten his wallet. It also shattered his trust in a system where he had long received care, including treatment for leukemia. He is debating his bill.
Now, when he seeks medical care, he thinks that “his best interests are being considered as opposed to any other objective that the hospital administration may have.”
This article is from a partnership that includes Nashville Public Radio and KHN.
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