U.S. government cracking down on false Medicare claims by major health-care outfits

The Justice Department is continuing to investigate false Medicare claims that have apparently padded the pockets of major health-care organizations.

According to a story by Christopher Rowland in yesterday's editions of The Washington Post, the U.S. government maintains those organizations have likely been mining "patient records for outdated, irrelevant conditions to increase profits."

A major culprit, Sutter Health systems, which runs 24 hospitals in Northern California, settled a civil whistleblower lawsuit last year for $90 million that alleged it had submitted false risk codes to get higher Medicare Advantage payment. It did not, however, admit any wrongdoing or liability.

Sutter's aim, the Post story contends, "translated into millions of dollars in inflated bills to the federal Medicare Advantage insurance program." 

Dr. David Terry

Rowland's article quotes Dr. David Terry, a recently retired psychiatrist who worked with in large health organizations in Kansas that aren't part of the lawsuits, as saying that what's been done is "not ethical coding, it's how to code for more money. That pressure is there." 

A whistleblower, Kathy Ormsby, had testified that her work auditing medical case files uncovered the alleged scheme to defraud the government. Sutter supposedly paid her to scour health histories of thousands of elderly Medicare patients and then pressured physicians "to add false diagnoses it found [including cancer and stroke] to their current medical records."

According to Rowland's article, the action, aimed at making patients appear sicker than they were, was often done "without the knowledge of the patients themselves."

Ormsby, the piece continued, "discovered 90 percent of diagnoses for cancer were invalid, as were 96 percent for stroke and 66 percent for fractures."

The government suit against Sutter was filed in U.S. District Court in California as part of a broader government crackdown on abusive billing practices. Sutter is the parent company of Ormsby's former employer, the Palo Alto Medical Foundation, which has 1,600 doctors.

The government still has a similar case against Kaiser Permanente pending — and, the article says, "lawsuits also are playing out in federal arts against UnitedHealth Group, Cigna and Anthem. The government's Office of Inspector General has audited Human and found it overfilled the government."

Kaiser and United Healthcare have denied any improper conduct; the others haven't commented.

Rowland's story talks about byproducts of the abuse. "Patients' medical records, padded with false diagnoses, are inaccurate. That could unnecessarily stigmatize patients who were improperly deemed obese, or malnourished, or mentally ill. It introduces potential phantom influences on treatment decisions, critics say."

More information on abuses in the medical system can be found in "Rollercoaster: How a man can survive his partner's breast cancer," a VitalityPress book that I, Woody Weingarten, aimed at male caregivers."