Feds accuse Martin’s Point of overcharging military health plan
by Joe Lawlor - Portland Press Herald - March 13, 2024
Martin's Point officials deny the accusations, which are made in a federal lawsuit against a group of health care providers.
The U.S. Department of Justice joined a federal lawsuit on Wednesday that accuses Martin’s Point Health Care in Portland and five other health systems and health care providers of defrauding the federal government out of $300 million. The defendants are accused of keeping overpayments from the government for health care for military retirees.
The government and whistleblowers who filed the original lawsuit contend that Martin’s Point and the other defendants knew about the overpayments – which were made between 2008-2012 – but did nothing to return the funds.
“Contractors have an obligation to return overpayments, and we will hold accountable contractors that knowingly and improperly retain such funds,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s civil division. “We are committed to ensuring that taxpayer funds for healthcare services to military members and their families are actually used for that purpose, not to enrich those charged with administering the program.”
Martin’s Point officials denied the accusations in a statement released on Wednesday.
Steve Amendo, chief marketing officer and communications officer for Martin’s Point, said in a prepared statement that the primary care provider is “profoundly disappointed” that the Justice Department joined the case, and that it will “vigorously defend” itself against the accusations.
“This dispute is about contracted rates paid more than 12 years ago,” Amendo said. “The government and Martin’s Point agreed on those rates. Now, the government has alleged that it made forecasting errors when negotiating those rates more than 12 years ago. The government paid Martin’s Point exactly the amounts that were negotiated and agreed to, no more. Martin’s Point provided the services it agreed to provide in reliance on those agreed-to rates. The government is now demanding a refund of a portion of the rates that it had expressly agreed to pay, arguing more than 12 years after the fact that the plans should repay the government for errors the government itself made in calculating the rates.”
Jeffrey Dickstein, an attorney for the whistleblowers with the Washington-based law firm Phillips and Cohen, said “the defendants were aware of these significant errors but chose not disclose the impact of the errors to the government despite their obligation to do so.”
The whistleblowers who initially filed the lawsuit are Jane Rollinson, former interim chief financial officer at Martin’s Point, and Daniel Gregorie, former member of the Martin’s Point board of trustees.
The lawsuit was filed under seal in 2016 and was not previously disclosed to the public. When the Department of Justice joined the case on Wednesday, the lawsuit was unsealed.
In addition to Martin’s Point, defendants include Maryland-based Johns Hopkins Medical Services Corporation; St. Vincent’s Catholic Medical Centers of New York; Massachusetts-based Brighton Marine Health Center; Pacific Medical Center, based in Washington state, and Texas-based CHRISTUS Health Services. The defendants formed an alliance called the U.S. Family Health Plan Alliance,to collectively negotiate rates with the U.S. Department of Defense, according to a news release by Phillips and Cohen.
The accusations surround the Uniformed Services Family Health Plan, which provides health care to more than 100,000 military retirees and their families.
“DOD (Department of Defense) payments to the healthcare defendants were pursuant to an agreed-upon formula which was based on many factors, including patients’ previous diagnoses. The ‘qui tam’ (whistleblower) lawsuit alleges that unbeknownst to DOD, from 2008 until 2012, a government contractor made two significant errors in calculating payments under the formula. These errors made patients appear sicker than they really were, causing DOD to pay the healthcare defendants hundreds of millions of dollars more than they were entitled to,” according to the Phillips and Cohen news release.
Amendo, of Martin’s Point, said that the health care provider “is confident that the evidence in this case will show that Martin’s Point met its obligations under the USFHP contract and did not receive an overpayment. The issue had no impact on any benefits or services received by Martin’s Point USFHP members and did not impact the amounts members ultimately paid for those services.”
Amendo noted that the Department of Defense twice renewed a 10-year contract for the health plan, in 2013 and 2023.
“This lawsuit will not affect Martin’s Point’s ability to continue to provide outstanding care to its patients or members now or in the future,” Amendo said.
In a separate matter last July, Martin’s Point and the Department of Justice reached a $22.5 million settlement agreement regarding the provider’s overbilling for the Medicare Advantage program.
Editor's Note -
Following, is a clipping of an earlier story in the PPH from last August
- SPC
Martin’s Point fraud settlement highlights shortcomings in Medicare Advantage program
Overcharging in Medicare Advantage plans has been happening across the country, experts say, although the Maine case is one of the largest uncovered by the Justice Department.
by Joe Lawlor - Portland Press Herald - August 4, 2023
The Medicare Advantage insurance program that is at the heart of this week’s $22.5 million settlement between Martin’s Point Health Care and the U.S. Department of Justice has siphoned off billions of dollars from Medicare, the government health insurance program for people ages 65 and older.
Practices brought to light in Maine by a whistleblower, as well as similar methods of overbilling, have become widespread in Medicare Advantage plans across the country, according to research and analysis by experts in Medicare policy. And although the practices don’t affect patients directly, this overcharging – which includes adding unnecessary codes to patients’ medical conditions to extract extra money from Medicare – threatens services provided by traditional Medicare and the financial solvency of Medicare itself.
“These Medicare Advantage plans are getting grossly overpaid,” said David Lipschutz, an attorney who works for a national nonprofit that advocates for Medicare.
Dr. Donald Berwick, who headed up the Centers for Medicare and Medicaid Services during the Obama administration and is currently a health policy lecturer at Harvard University, agreed that the status quo with how Medicare Advantage operates is “highly destabilizing” to Medicare.
Medicare Advantage is a replacement plan for Medicare that typically offers an array of benefits not included under traditional Medicare – such as vision, dental, and hearing, and may have lower out-of-pocket costs – which makes the plans attractive for those who can afford them.
Martin’s Point is a primary care provider with six locations in Maine, including Portland, and has 60,000 members enrolled in a Medicare Advantage plan.
The settlement, filed in court on Monday, detailed allegations of how Martin’s Point’s Medicare Advantage plan would code patients’ historical conditions – such as for cancer, stroke, and heart disease – as current health conditions to obtain money from Medicare that it was not entitled to receive. It’s the largest Medicare fraud settlement in state history.
As part of the settlement, Martin’s Point was not required to admit to any wrongdoing. Its officials have declined interview requests.
“Martin’s Point repeatedly pressured and directed employees and contractors to ignore unsupported codes – such as coding historical conditions as active – because deleting those codes would hurt profitability,” court records state.
Lipschutz, associate director for The Center for Medicare Advocacy, a Connecticut-based nonprofit law firm that advocates for improved Medicare services and to protect access to the program, said the current system of Medicare Advantage overbilling is extremely lucrative for the firms selling those plans.
The financial rewards are so great, that the penalties for getting caught gaming the system are not stiff enough to stop plans from continuing to overcharge, he said.
“The incentives are in place for Medicare Advantage plans to maximize profits, regardless of whether this is causing inappropriate additional costs borne by federal taxpayers,” Lipschutz said. “These settlements appear to now be part of the cost of doing business.”
Berwick said the practice – called “upcoding” – has become so ingrained in the system that Medicare Advantage plans that properly followed all the rules would be “driven out of business.”
But the current system is creating a vicious cycle – estimates of the overbilling range from $12 billion to $75 billion per year – where Medicare Advantage enrollees receive more generous benefits at the expense of traditional Medicare, Lipschutz said. Medicare Advantage plan enrollees tend to be wealthier and healthier than traditional Medicare patients, skewing the risk pool and making it more costly for the federal government to care for Medicare patients. If in response to rising costs, Medicare slashes reimbursement rates paid to doctors, while Medicare Advantage continues to reap record profits, that could incentivize healthcare providers to limit the number of traditional Medicare patients, he said.
The irony is that gaming the system means that Medicare Advantage is pretending its patients are much sicker than they are, Lipschutz said.
TRADITIONAL MEDICARE COULD SUFFER
Also, with Medicare Advantage plans flush with cash they shouldn’t have, they can offer increasingly generous benefits, attracting even more enrollees, Lipschutz said. The larger Medicare Advantage becomes – it currently has nearly half of all Medicare-eligible enrollees – the bigger the threat to Medicare’s financial solvency.
“You could see this spiral of growing enrollment in private Medicare Advantage plans, to the detriment of traditional Medicare,” Lipschutz said.
Although the scheme destabilizes the Medicare program, it doesn’t cause overbilling of the patients themselves.
Berwick said if current trends continue, Medicare Advantage overcharging could further threaten the Medicare hospital insurance trust fund, which according to the Kaiser Family Foundation is currently at about $170 billion but is slated to be depleted by 2029. If the trust fund runs out, Congress could slash Medicare benefits, raise taxes or come up with other fixes to make it solvent again.
In recent years, the Justice Department has gone after numerous providers of Medicare Advantage plans across the country and reached settlements in the millions, including with major insurers like Anthem, United Health Group, and Independent Health Group in Buffalo. An October 2022 article in the New York Times showed eight of the 10 largest Medicare Advantage insurers having submitted inflated bills to Medicare, according to a recent analysis by federal audits.
Lipschutz said the current penalties do not appear to be enough to stop the practice. Suspending operating licenses for insurance companies would be a substantial penalty, but he said he’s not seeing that happen.
“If these companies are defrauding the federal government, why are they allowed to continue to operate?” Lipschutz said.
Criminal penalties for executives also could help deter “upcoding.”
“You very rarely see health executives being led away in handcuffs,” Lipschutz said. The settlement agreement with Martin’s Point did not rule out future criminal charges, but there have not been any criminal charges filed in connection with the case.
Berwick said depending on how it’s done, “upcoding” in many cases is legal, even though it’s harmful to the system. But he said the more aggressive insurance companies are at “upcoding,” the closer they “skate to the edge” of legality, and those responsible could face criminal charges.
LOOKING FOR SOLUTIONS
Lipschutz said Congress or Medicare officials also could devise other solutions, such as limiting or eliminating “risk adjustment” payments for patients. Under “risk adjustment,” Medicare Advantage is paid more if the patient is sicker, giving financial incentives to insurers to code patients with conditions they don’t have or had years ago. Congress could simply eliminate “risk adjustment” or use other formulas to balance out potential overpayments, he said.
The issue is starting to attract the attention of members of Congress.
Matthew Felling, a spokesman for Sen. Angus King, I-Maine, said in response to questions from the Press Herald that “Senator King is engaged in efforts to improve Medicare Advantage and to protect the long-term solvency of the program.”
In February, U.S. Rep. Chellie Pingree, D-Maine, was among dozens of members of Congress who sent a letter to the Centers for Medicare and Medicaid Services urging the agency to continue reforming Medicare Advantage plans.
“We believe there is still much more that needs to be done to protect seniors and people with disabilities from fraud and abuse,” the letter read. “We urge you to build on your current work to improve Medicare by fixing the harms to patient care and rapidly increasing costs within the Medicare Advantage program. This will also save money that can then be used to reinvest in seniors’ and people with disabilities’care.”
Steve Amendo, spokesman for Martin’s Point, released a statement on Monday that said, “the settlement is not related to member care or the payment of member claims.”
“Despite denying liability for the litigation claims at issue, Martin’s Point ultimately determined that settlement of this matter was appropriate rather than engaging in the cost and uncertainty of protracted litigation,” he said.
According to court filings, the claims of erroneous coding that were brought to light by whistleblower Alicia Wilbur, a former Martin’s Point employee who received $3.8 million in the settlement, were not enough to stop Martin’s Point from continuing its practices.
“Stunningly, in 2017, when Martin’s Point retroactively reviewed a sample of three years of medical charts, it found that the patients did not have (or the charts did not support) 60% of the illnesses reported to, and paid by (the Center for Medicare and Medicaid Services),” the complaint reads. “In response, Martin’s Point did nothing: it did not investigate further, broaden its sample size nor look for these errors in prior periods. On information and belief, it did not even notify CMS and kept the resulting overpayments.”
Wilbur has not responded to a request through her attorney to be interviewed.
Lipschutz said until reforms are enacted, there are enough loopholes for the problems to continue.
“There’s a lot of wiggle room right now for plans to exploit, to try to defend an indefensible practice,” he said.
Hospital vs. Insurer Dispute Could Force Thousands to Switch Doctors
Stalled contract negotiations between UnitedHealthcare, the health insurance giant, and Mount Sinai Health System, a leading New York City hospital system, are forcing tens of thousands of New Yorkers to switch doctors or risk paying out-of-network prices.
The impasse has dragged on for months. Mount Sinai has sought to raise prices significantly, but the insurance company has refused to agree to pay the new proposed rates. As a result, Mount Sinai’s hospitals are now out of network for patients insured by UnitedHealthcare or Oxford, which are subsidiaries of the same company.
But the issue is about to become even more urgent for many patients because many Mount Sinai affiliated doctors — in addition to the hospitals themselves — are about to be removed from UnitedHealthcare’s network, starting March 22. That means patients with United who have employer-sponsored or individual plans will be billed out-of-network rates when they see a Mount Sinai affiliated doctor at a doctor’s office.
The negotiations have sent many patients scrambling to find new doctors. UnitedHealthcare says about 80,000 Mount Sinai patients are affected.
What Happened?
The dispute between the insurance giant and the hospital system is a rare instance in which health care contract negotiations have spilled into public view.
Health Care in the United States
- Long-Term Investors: As health care systems increasingly see a link between stable housing and better health, some are becoming partners and investors in affordable housing projects.
- A Paralyzing Cyberattack: Medical care providers, including large hospital networks and small clinics, faced a severe cash squeeze after a cyberattack paralyzed the biggest billing and payment system in the United States.
- Home Care Aides: Home health care, among the fastest growing industries in New York and nationwide, is also one of the lowest paying, with often grueling hours.
- Steep Cutbacks: Now that federal pandemic-era funds are shrinking, states like Indiana are ending or curtailing programs that finance home care by relatives of seriously ill children and adults.
Mount Sinai sought to negotiate better rates with UnitedHealthcare, demanding that the insurance giant pay the hospital more for doctor visits and hospital stays. United claims Mount Sinai was asking for rates to go up some 58 percent over the next four years.
Mount Sinai says it asked for a significant increase because it recently learned that UnitedHealthcare was paying Mount Sinai significantly less per medical procedure than it was paying other top New York City hospitals.
Mount Sinai estimates that another hospital system, NewYork-Presbyterian receives about 40 percent more from UnitedHealthcare than Mount Sinai does for many common procedures.
Hospitals and health insurers negotiate “in network” rates individually. The prices were often treated as secret, and hospital executives often had only a vague idea of what insurance companies paid their competitors for similar care. But that has changed with recent laws and regulations that have required hospitals to publish information about rates.
“It is something we thought for many years by speaking to colleagues at other institutions, but we were able to prove in 2023 because of the new transparency laws,” said a Mount Sinai obstetrician-gynecologist, Dr. Alan Adler, who has been involved in the negotiations with United.
That set the stage for the current dispute: Mount Sinai wanted United to pay them more in line with the competition, while United wanted to keep costs down. It has called the hospital network’s demands “outlandish.”
In a statement, UnitedHealthcare said the two parties were in “active discussions,” and said it had “provided the health system with multiple proposals that include meaningful rate increases that ensure they’d continue to be reimbursed at market-competitive rates.”
Brent Estes, a senior vice president at Mount Sinai, said United “has offered us virtually nothing more than the prior contract.”
“Regrettably,” he added, “we are bracing for our physicians to be out of network.”
How might patients be affected?
The situation has been especially stressful and confusing for New Yorkers who are receiving cancer care at Mount Sinai or who had planned to give birth there, according to doctors. Though such patients may be eligible to remain with their doctor without paying more, it has been tough to get clear answers.
One pregnant woman, for instance, received a letter last month from UnitedHealthcare saying that she would still be considered in network at Mount Sinai when it came time to deliver her baby. But the letter, which was provided to The Times by a Mount Sinai employee with the patient’s name redacted, said the in-network coverage was approved for a three-day period in April — apparently corresponding with her due date — and covered only “routine obstetric care” and a vaginal delivery.
The letter said nothing about what would happen if she went into labor early, or needed a C-section. A spokesman for UnitedHealthcare, Cole Manbeck, said that some automated letters sent by the insurance company “may have created a little bit of confusion.” But Mr. Manbeck said United had followed up with phone calls to clarify that the delivery would be covered, no matter the date or method.
Jane Hogan, a 55-year-old writer for a cosmetics company, sees Mount Sinai doctors for chronic migraines and back problems.
She spent one recent morning trying to ensure that a biopsy would be covered under her United health insurance. She called the situation “anxiety inducing” and time-consuming.
Many other hospitals in New York City remain within UnitedHealthcare’s networks, including NewYork-Presbyterian, the city’s largest private hospital system.
Chris Pope, a health care policy analyst at the Manhattan Institute, a conservative think tank, said the insurer probably had the upper hand in negotiations because United patients could just move their care to other health systems, leaving Mount Sinai with far less revenue, he said.
“United can walk away from Sinai, much easier than Sinai can do without United,” he said.
https://www.nytimes.com/2024/03/14/nyregion/united-healthcare-mount-sinai-insurance.html
Editor's Note -
The following clipping is the March 15, 2024 issue of the CAHC's Policy Perspective - a nice summary of issues regarding medical debt in Maine.
- SPC
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When Medicaid Comes After the Family Home
Federal law requires states to seek reimbursement from the assets, usually homes, of people who died after receiving benefits for long-term care.
The letter came from the state department of human services in July 2021. It expressed condolences for the loss of the recipient’s mother, who had died a few weeks earlier at 88.
Then it explained that the deceased had incurred a Medicaid debt of more than $77,000 and provided instructions on how to repay the money. “I was stunned,” said the woman’s 62-year-old daughter.
At first, she thought the letter might be some sort of scam. It wasn’t.
She asked not to be identified, because the case is unresolved and she doesn’t want to jeopardize her chances of getting the bill reduced. The New York Times has reviewed documentation substantiating her account.
The daughter moved into the family’s Midwestern home years earlier, when her widowed mother, who had vascular dementia, began to need assistance.
Her mother was well insured, with Medicare, a private supplemental “Medigap” policy and long-term care insurance. The only reason she enrolled in Medicaid was that she had signed up for a state program that allowed her daughter to receive modest payments for caregiving.
But that triggered additional monthly charges through a Medicaid managed care organization, and now the state wants that money back.
The practice dates to 1993, when Congress mandated that when Medicaid beneficiaries over age 55 have used long-term services, such as nursing homes or home care, states must try to recover those expenses from the beneficiaries’ estates after their deaths.
“Medicaid requires beneficiaries to spend down almost all their assets” to qualify for benefits, explained Eric Carlson, a directing attorney at Justice in Aging.
Most states allow those eligible for Medicaid to retain assets worth only $2,000. But if a beneficiary owns a home, it can be exempt.
Still, if Medicaid has paid for long-term care and there’s money to be had after death, state agencies will come for the assets.
“If there’s going to be tens of thousands of dollars available for recovery, in most cases, it’s the house,” Mr. Carlson said. Surviving family members may have to sell the house to repay Medicaid, as the Midwestern daughter may be forced to do, or the state may seize the property.
Medicaid “is the only public benefit program from the United States of America that requires states to seek to get money back,” said Representative Jan Schakowsky, Democrat of Illinois. This month she reintroduced a bill, the Stop Unfair Medicaid Recoveries Act, to end the practice.
Her staff has calculated that 17,000 families in Illinois alone have lost homes to Medicaid recovery since 2021. Comparable national figures aren’t available, but an independent agency that advises the federal government and states on Medicaid issues reported in 2021 that states collected $733 million through estate recovery in the fiscal year of 2019.
That amounts to only about one half of a percent of Medicaid’s long-term-care expenditures, according to the agency, MACPAC, the Medicaid and CHIP Payment and Access Commission. Only eight states collected more than 1 percent of expenditures.
“This is a really harmful and cruel program,” Ms. Schakowsky said. “And it’s not working. The cost of actually trying to get the money could exceed any money that would be returned.”
When Congress established the mandate, proponents argued that estate recovery would save money and promote fairness, since some higher-income seniors hired lawyers to help shield their assets so that Medicaid would pay their nursing home bills.
But for the most part, the states pursue claims against low-income families, many of them Black and Hispanic. Critics argue that the policy perpetuates poverty. The average wealth of deceased Medicaid recipients over age 65 is less than $45,000, the MACPAC report noted, and the average home equity is $27,364.
“For a lot of these people, the home is a product of a lifetime’s worth of working and scrimping,” Mr. Carlson said. “It could be a foundation for their children and grandchildren. That’s pulled away from the family under these claims. It imposes recovery against the families and communities least able to pay it.”
(A surviving spouse or minor or disabled child can continue to live in the house after a Medicaid beneficiary dies, but after the survivors die, or after a child turns 21, estate recovery can proceed.)
Every state offers hardship waivers that reduce claims, but “the process tends to be difficult or futile,” Mr. Carlson said. “Depending on the state, the request is almost always unsuccessful.”
“I don’t think estate recovery was a policy created primarily to impact low-income families, but that’s the impact it’s having,” said Natalie Kean, another directing attorney at Justice in Aging.
Estate recovery can also affect middle-class families, however. Many turn to Medicaid because, given the cost of nursing homes (the median price last year was $8,669 a month), “your savings can disappear in a hurry,” Mr. Carlson said.
Brian Snell, an elder law attorney in Marblehead, Mass., represents a family whose 93-year-old mother, who had dementia, died in 2022 at her condo in North Andover. Her daughter had cut back on her hours as a beautician to care for her at home, wanting to keep her out of a nursing home because “that was her mother’s wish,” Mr. Snell said.
When the mother qualified for MassHealth, the state Medicaid program, it enrolled her in a state home care program that provided home health aides (though only sporadically, because the pandemic made workers and agencies hesitant to enter homes).
After her death, MassHealth sought to recover $292,000 for the cost of home care and the program premiums. Because two of her children were low-income, including the caregiving daughter, a state waiver would allow those two to receive $50,000 each from the sale of the mother’s condo. But more than half of the $335,000 sales price will go to the state and federal governments.
The prospect of such clawbacks prevents some low-income older adults from receiving necessary care, even if they’re eligible.
“It’s not uncommon for people to simply decline to apply for Medicaid services once they learn about the recovery program,” said Matthew Portwood, an intake supervisor at the Atlanta Regional Commission, which serves as the local agency on aging, in an email. “Our counselors encounter this almost daily.”
Some states are working to reduce the financial hit on low-income families. Massachusetts, Georgia, South Carolina and Illinois, for instance, will not pursue recovery against estates valued below $25,000. Some states now provide applicants with fuller explanations of the consequences of signing up.
California allows hardship waivers for a “homestead of modest value,” defined as a market value of up to half the average price of homes in the county. MACPAC recommended amending federal law to allow states to make recovery optional.
Representative Schakowsky’s bill goes beyond that to prohibit Medicaid estate recovery altogether. “It’s just a terrible idea,” she said.
Her bill faces an uphill battle in the Republican-controlled House — all its 13 co-sponsors to date are Democrats — and it went nowhere when she introduced it last session. But the congresswoman remains optimistic: People in red states need long-term care, too.
Back in the Midwest, the daughter who was billed $77,000 still hopes to remain in the two-story house where she grew up, where her mother lived for more than 60 years and where “there’s a memory in every corner.” Now she is looking for a lawyer. “I have to fight this,” she said.
https://www.nytimes.com/2024/03/16/health/medicaid-estate-recovery-seniors.html
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