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Thursday, April 14, 2022

Nonprofit Catholic Hospital Group Defrauds State of Millions

 Yesterday, I read multiple articles about my local community nonprofit hospital defrauding Washington State Medicaid and the federal government for millions of dollars. This hospital encouraged neurosurgeons to perform unnecessary spinal surgeries in order to generate higher revenues for five years. (Hagar, 2022)These practitioners put patient’s health at risk for financial gain. Spinal surgeries are one of the riskiest and most controversial of all procedures with a high failure rate. One of the neurosurgeons charged in this scheme earned four million dollars in one year in a rural farming community of 38,000 people. Doesn’t sound right, does it? But the head of the hospital, St. Mary’s-Providence earned ten million dollars in the same year. That to me, was mind boggling. And these doctors are not the only ones guilty of fraud in the U.S. healthcare system, which places volume ahead of health.

To give you an idea of the scale, St. Mary-Providence only has 142 beds, which is a small hospital, by comparison, Providence Hospital in Spokane has 674 beds, which is considered large by U.S. standards. The head of a much larger hospital earned less than the head of this tiny hospital, because of the Providence incentive system which rewards increased volume in complex procedures. Not comforting to know your doctor works on a lucrative bonus plan versus the best evidence-based practices.

The overbilling occurred over a five-year-period at St. Mary’s ending in 2018, when the unethical and abusive neurosurgeons were forced to resign. But Providence did not report them to the Attorney General, for that would have ensnared them in the overbilling scheme as well. The corporate financiers were content to keep raking the money in, despite patient health risks, and higher costs for all consumers.

Fortunately, the former administrator for the neuro unit became a whistleblower and got the case started with the Washington State Attorney General, Bob Ferguson’s Office. Because of the excellent work of his team, Providence has been found guilty of fraud, will pay a twenty-two million dollar fine, and will be on a five-year-probationary review. Imagine if we looked at all of Providence’s hospitals in all seven states, how much overbilling would we find? Afterall when the Affordable Care Act passed, Providence made so much money it created its own venture capital fund rather than lower its fees for services.

Providence Hospitals named in the lawsuit: Providence Centralia Hospital, Providence St. Joseph Hospital, Providence Mount Carmel Hospital, Providence Regional Medical Center, Providence St. Peter Hospital, Providence Holy Family Hospital, Providence Sacred Heart Medical Center, Providence St. Mary Medical Center, Swedish First Hill Campus, Swedish Cherry Hill Campus, Swedish Ballard Campus, Swedish Issaquah Campus, Swedish Edmonds Campus, and Kadlec Regional Medical Center. Providence also operates hospitals in Alaska, Montana, Oregon, and California.

The most galling are the finance people working in hospital corporations who create these schemes and see nothing wrong with paying someone an exorbitant compensation package in a tiny rural hospital. This is one of the problems with nonprofit hospital groups, their compensation packages are often opaque, because there are no shareholders and disclosure is limited. The executive of St. Mary Medical Center is no exception in the Providence compensation, many of their executives earn ten million a year. (National Union of Healthcare Workers, 2022) And where do these finance gurus who cut clinical staff and put patients at risk come from, Amazon and Microsoft.

Providence Health was also found guilty of deceptive billing practices, because the nonprofit hospital did not make patients aware of their charity care options. In other words, the nonprofit Catholic hospital saw nothing wrong with bilking low-income people for care, as long as their venture capital fund was doing well. (Gamble, 22)

 In a previous post, I wrote about a Pennsylvania judge ruling that another nonprofit hospital group did not deliver enough uncompensated care to qualify as a nonprofit entity. [i] This is a national healthcare problem, which can only be cured by further government interventions in regulation of pricing, financial disclosure, and enforcement.

Imagine how many more nurses and mental health specialists we could have actually helping patients if we had a healthcare system which is not based on profits. The only way this abuse is ever going to end is when Americans wake up and adopt a national healthcare system and yes, that will mean hospital administrators won’t be making ten million dollars a year. And that would be better for all of us.

And this is the healthpolicymaven signing off encouraging you not to sign blanket release forms for procedures, do stipulate that for which you agree and decline.

Roberta Winter is an independent healthcare analyst and journalist who accepts no money from any sector of the U.S. healthcare system. She has been interviewed on publicinterestpodcast.com and is the author of a guidebook to the U.S. healthcare system, published by Rowman and Littlefield in 2013. https://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972

References

Gamble, M. (22, February 24). Beckers Hospital Review. Retrieved from Beckers Hospital Review.com: https://www.beckershospitalreview.com/legal-regulatory-issues/washington-sues-providence-over-collection-tactics.html

Hagar, S. (2022, April 13). More details emerge on Providence St. Mary Medical Center's $22.7 million insurance fraud settlement. Retrieved from Union Bulletin: https://www.union-bulletin.com/news/courts_and_crime/more-details-emerge-on-providence-st-mary-medical-centers-22-7-million-insurance-fraud-settlement/article_9ef81200-bab2-11ec-9bf3-03450d16ba13.html

National Union of Healthcare Workers. (2022, April 14). Providence St. Joseph Watch. Retrieved from NUHW.org: https://nuhw.org/providence-st-joseph-watch/executive-salaries/

 

 

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