Columbia HCA Healthcare Fraud: How Do Repeat Offenders Keep Billing?

Two Florida Labs, One Strip Mall (0:00)

The two adjacent laboratories sat in a single shopping center in Deerfield Beach, Florida, and the public billing data tells a strange story. In a single Florida shopping center, two adjacent laboratories helped drive a roughly one thousand-fold increase over three years in the billing of one genetic test. That test, identified by the code eight one four one nine, is used for epilepsy. The federal government tracks every claim by such codes, and the most recent year of public data, twenty twenty-four, shows the spike clearly. But the geography is what catches the eye.

About a quarter of all those tests billed nationally in twenty twenty-four trace to Florida, and most of those trace to one strip mall. The two labs are Reliable Results and Prince Laboratories. Together, they billed Medicare and Medicaid an estimated ninety million dollars. Reliable Results billed roughly thirty million in twenty twenty-four and ranked number two nationally for epilepsy genetic testing. Prince Laboratories ranked number one, with approximately sixty million in total billings to the government.

Both labs were new. They appeared in public records only in the last couple of years and almost immediately rose to the top of the rankings. They were number one and number two in the country not just for epilepsy testing but for several other test codes. Then they both vanished. A reporter showed up in person to ask why.

Reliable Results was locked. The new tenant in the next unit said the lab had already closed. The building owner, contacted separately, said the lease ended May thirty-first, about a month after the reporter first reached out. Prince Laboratories was empty. No one answered at the door.

The owner did not respond to messages sent through social media. The lab that had once been Reliable Results had, four months before the visit, denied the allegations by email. Now the doors were shut and the lights were out. The timing raised questions that the public data alone cannot answer. To understand how such billing patterns are built, an expert in laboratory administration and compliance, Ashley Zarling, who has spent ten years in the field, walked through the mechanism.

A sales representative, she said, accesses a provider's patient list, reviews the records, and tells the provider which tests to order for which patients in order to increase volume. The tests are then billed to government programs. The provider may not benefit personally, but the lab benefits when the order is placed. Public complaints online tie a person identified only as Rasheed and an entity called Telesolutions MC to Reliable Results. The same Rasheed, the reporter learned, is linked to a company called CTD Network LLC, which was recently tied to a two point seven million dollar indictment for fraudulent genetic tests.

Rasheed did not answer questions. An anonymous source who claimed familiarity with both labs told the reporter they were connected beneath the surface. The same source alleged shared family ties, a connection through the same Italian restaurant, prior criminal histories involving drugs, illegal telemarketing, and money laundering, and possible associations to organized crime. The source said they were afraid of the lab owners. These are allegations from a single unnamed source, and the reporter was not able to corroborate them independently.

The wider pattern, the source said, is a telemarketing scheme. Cold callers, paid up to one hundred thousand dollars a month, contact Medicare patients and offer free genetic testing. A telehealth doctor at the back end orders the test regardless of clinical necessity. The lab then runs the test and bills the government. That is how ninety million dollars in claims come out of a single shopping center in one year.

Move the camera west, and the pattern changes shape but not size. In Los Angeles, a single office building has had more than one hundred hospice centers registered at its address. News reports put the number close to two hundred. The building's owner sells virtual offices. Many of those registered hospices use only a mailing address, not a physical presence.

A CBS investigation found documented cases in which the care described in records did not match reality. A nurse had noted that the family seemed pleased with treatment. Inspectors found no one from the hospice had ever visited that patient. A hospice social worker documented a family's mourning at a passing. There is no evidence the patient was actually dead.

The California state auditor has stated that Los Angeles shows indicators of large-scale fraud and likely fraudulent billing with hospice. As of the reporting, no hospices at that address had been charged. The buildings stay open. The registrations continue. Two specific cases, two different mechanics, one shared arithmetic.

To make sense of it, the patterns can be sorted into three buckets. Phantom fraud bills the government for services or products that were never delivered. The federal government has alleged, for example, that billions of dollars in urinary catheters were ordered and never given to patients. Pushed fraud delivers a real service that was not medically necessary. A patient might be offered a neurological test over the phone without their personal doctor ever being contacted.

Padded fraud delivers a legitimate service but inflates the claim with extra codes that were not performed. A six hundred dollar test becomes a claim for one thousand or two thousand dollars. The diagnosis matches. A medical record is producible. But one layer deeper, the codes tell a different story.

Strip the jargon away and every scheme falls into one of those three boxes. The labs in Florida leaned hard on pushed. The Los Angeles hospices appear to blend phantom and padded. The urinary catheter case is phantom. The names are useful.

The patterns repeat. To stop the bleeding, a new federal anti-fraud task force has been announced by executive order. Its stated goal is to root out fraud in federally funded programs and return money to the American taxpayer. The press conference promised a whole-of-government approach. The slogans sounded familiar.

Waste, fraud, and abuse is more than a decade old. The pay and chase model, in which the government pays claims first and chases fraud after the money is out the door, is older still. In the months since the announcement, there have been real enforcement actions. Minnesota saw an autism fraud bust. California saw a hospice fraud crackdown.

The federal government has also called out state Medicaid Fraud Control Units that have long underperformed. Hawaii's unit is a case study. Local reporting in twenty twenty-two found the unit had generated almost zero prosecutions out of hundreds of complaints. The unit director blamed pandemic challenges and promised improvement. Three years later, the results are in.

Three hundred and eighty-eight investigations in the most recent year.

Reliable Results Locked And Empty (8:00)

Three hundred and seventy-four in twenty twenty-four. Three hundred and sixty-eight in twenty twenty-three. Roughly one thousand investigations in three years. Zero indictments. Zero convictions.

New York's unit has also been singled out. The federal government says the unit has not prosecuted enough people. Federal funding is being frozen through at least the end of September. The pattern is hard to miss. The states drawing the loudest criticism are Democratic.

Florida, a Republican state with documented fraud in its strip malls, gets a softer description. The federal government has called California a kingdom of fraud. It has called Florida very well-run while acknowledging elements of fraud in South Florida. The political tilt is in the language. The pardons tell a similar story.

Robert Harshbarger Junior, the husband of Tennessee Congresswoman Diana Harshbarger, had pleaded guilty in twenty thirteen to one count of distributing misbranded kidney dialysis drugs and one count of healthcare fraud. He was pardoned at the end of the same week the President endorsed his wife in her twenty twenty-six bid for a fourth term. Philip Esformes, a Chicago-area nursing home executive tied to what prosecutors called the largest Medicare fraud case in United States history, a billion-dollar scheme, had his sentence commuted. Judith Negron, convicted in a separate Medicare swindling scheme, was pardoned. On release, news cameras filmed her wearing a Make America Great Again hat and draped in a flag bearing the President's name.

The pardons are public record. The political framing is in the footage. None of this is new. The Medicaid Fraud Control Units were created in the nineteen seventies. A national anti-fraud association was founded in the nineteen eighties.

A presidential attack on Medicare and Medicaid fraud was launched in the nineteen nineties under President Clinton. The slogans and the strategy are recycled. The political alignment, however, is sharper than it has been in decades. And the structural loophole, the one that keeps the biggest players in the game, is older still. When companies settle fraud cases, they typically pay a fine and agree to a corporate integrity agreement.

They rarely admit wrongdoing. Crucially, they usually keep the right to bill Medicare and Medicaid. Lincare, an oxygen and durable medical equipment company, illustrates the pattern. In two thousand six, the company was described in government statements as the subject of the largest ever civil monetary penalty case at the time, involving alleged illegal kickbacks. It settled.

A former employee alleged in two thousand eight that patient forms were falsified. Nothing visible came of it. In twenty eighteen, Lincare paid five billion dollars to settle False Claims Act allegations. A later settlement, twenty-nine million dollars, was described as the largest ever healthcare fraud settlement in Eastern Washington. ProPublica reported that Lincare had been on probation four times previously and had violated the terms.

Less than a year later, another Department of Justice settlement: twenty-five million dollars for fraudulent billing practices. Lincare's annual revenue is estimated at two billion dollars. The math is simple. A twenty-five million dollar fine is not a deterrent for a two billion dollar company. It is a cost of doing business.

Columbia HCA, the largest hospital company of its era, pleaded guilty to substantial criminal conduct and to systematically defrauding Medicare and Medicaid. The chief executive was not charged. He received no jail time. He went on to become a United States Senator from Florida. And then there is the part of the system where the harm is most direct.

Nursing homes and skilled nursing facilities. Asked whether they would put their own parents in a nursing home, several people who work in and around the industry said no. One said she would sooner put a bullet in her own head. The business model, a Hunterbrook reporter explained, runs on acuity-based reimbursement. The government pays facilities based on how sick each patient is.

The more acute the patient, the higher the payment. The facility is supposed to use that money to staff up to the patient's needs. The fewer nurses hired, the higher the margin. The incentive points one way: down on staff, up on profit. Hunterbrook, a journalism team, recently investigated the largest public company in this space, the Ensign Group, which holds hundreds of these homes and facilities around America.

In twenty twenty-four, the Centers for Medicare and Medicaid Services issued a federal minimum staffing rule. A University of Pennsylvania study estimated the rule would save thirteen thousand lives a year. The rule was challenged in federal court in Texas and its core provisions were vacated. The industry lobbied against it. The Trump administration repealed the rule in December.

According to the New York Times, the industry's main lobbying group, the American Health Care Association, donated approximately four point eight million dollars to MAGA Incorporated. The parties deny a connection, and no causal link has been established. The rule is gone. Hunterbrook, working with academic models, took five months of internal data from Ensign Group and compared actual staffing to the staffing that patient acuity demanded. The facilities were short more than five million nursing hours.

The estimated extra profit: one hundred and sixty-one million dollars over five months. Extrapolated to all nursing facilities nationwide using CMS data, the figure rises to roughly six point five billion dollars in profits over the same five-month window. That is more than a billion dollars a month in care that the government paid for and the patients did not receive. The same company had previously settled in twenty thirteen for forty-eight million dollars over allegations of billing for care not provided. Its revenues are at all-time highs.

Step back. The strip mall in Florida, the office tower in Los Angeles, the durable equipment settlements, the repealed staffing rule, the unindicted fraud investigators. Each one looks like a different story. Layered together, they describe a single system. Schemes repeat because they are profitable.

Enforcement is politicized. Settlements allow repeat offenders to keep billing. The most direct human harm, the missing nurses, the unfilled hospice visits, the patients whose deaths are described in charts they never received, sits at the end of a long chain of decisions made in rooms the patients never enter. A federal official has placed the annual cost at roughly one hundred billion dollars in Medicare and Medicaid alone, describing it on camera as shocking, blatant fraud.

Rasheed And Telesolutions MC (15:45)

The question is what to do about a system in which the people who find the cheaters keep letting them play. The two adjacent labs in Deerfield Beach are gone, but the codes they billed, the telemarketers they hired, the telehealth doctors who signed off, the corporate owners who settled and kept billing, are still in the data. The case is not closed. It is still being added to.