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Nashville-based HCA Healthcare Inc. could soon be the subject of a federal investigation.
Rep. Bill Pascrell of New Jersey, chair of the U.S. House of Representatives' Ways and Means oversight subcommittee, sent a letter last week to the U.S. Department of Health and Human Services asking that they launch an investigation into “alleged fraud and staffing issues” at HCA facilities.
In the letter addressed to Health and Human Services Secretary Xavier Becerra, Pascrell focuses heavily on accusations levied by the Services Employees International Union, which claims HCA emergency departments routinely admit patients for inpatient stays, regardless of medical need. The accused practice “may have” brought in nearly $1.8 billion in excess Medicare payments since 2008, according to a January report released by the union.
Pascrell also sent a letter to HCA CEO Sam Hazen requesting information related to physician incentives, physician performance, staffing levels and a description of the company’s internal audit process for Medicare billing.
In an emailed statement to the Business Journal, HCA said it is in the process of providing information to members of the House Ways and Means Committee’s subcommittee on oversight, including Pascrell.
"The letter from Congressman Bill Pascrell repeats claims made by SEIU and its affiliates (CTW and SOC) over the past few years about emergency department admissions rates. We categorically reject any allegation that physicians admit patients to our hospitals on the basis of anything other than their independent medical judgment and their patients’ individual conditions and medical needs. There are no HCA Healthcare policies, processes or practices that require physicians to admit patients to our hospitals.
We are reviewing the letter from Subcommittee Chairman Pascrell and will respond, but the allegations made by the SEIU to the Congressman are based upon an invented and false premise and a lazy and manipulative argument. The SEIU has engineered a metric (the “standard” or “average” rate for emergency department admissions) that exists for no other purpose than the public criticism of HCA Healthcare. It appears that the SEIU used publicly available Medicare claims data and simple math to divide the number of ED admissions by the number of ED visits and arbitrarily deemed the resulting number to be a valid metric or benchmark.
That metric is, however, not recognized by healthcare providers, experts or academics, and the failure of any hospital, including those operated by HCA Healthcare, to meet that metric is utterly meaningless. Credible and knowledgeable healthcare experts understand that many variables, including community demographics, hospital services, patient needs and acuity, and other related factors need to be considered in any analysis of hospital emergency departments.
That said, even assuming, without agreeing, that the SEIU metric is meaningful, HCA Healthcare hospitals are in line with some of the best in the nation. Using the SEIU’s own methodology for example, of the top 20 US News’ Best Hospitals in 2021, the highest emergency department admission rate was 61% and the lowest was 28%. Comparatively, HCA Healthcare’s national average is on the lower end of that range at 37%.
It seems the information the SEIU presented to Subcommittee Chairman Pascrell was incomplete and intentionally misleading.
The graph below, provided by the company, includes HCA's analysis of admission rates at the top 20 U.S. health systems.
HCA (NYSE: HCA) is Middle Tennessee’s largest publicly traded company, according to Nashville Business Journal research, with nearly 11,000 local employees and $58.75 billion of revenue in 2021. The company operates 182 hospitals across 20 states and the United Kingdom, more than any for-profit hospital operator in the U.S.
The investigation request is the latest — and biggest — domino to fall amid a series of allegations made by nursing unions in recent years, accusing HCA of understaffing hospitals, unnecessarily admitting patients and forcing staff to reuse personal protective equipment.
In the letter to HHS, Pascrell also cites allegations that HCA sets corporate patient admission targets and threatens retaliation against hospital staff if those targets aren’t reached. The letter states that physician staffing firm EmCare — a subsidiary of Nashville-based Envision Healthcare, which provides staffing at many HCA hospitals — may play a role in the setting and implementation of those admission targets.
“Improper hospital admissions can have cascading effects on patients and workers. Unnecessary admissions expose patients to unnecessary treatments. This creates an added potential risk of complications and the possibility of new infections for patients. Improper admissions also put additional burdens on hospital workers who are often already overstretched – especially in HCA hospitals, given that HCA’s average staffing levels trail the national averages by 30 percent. There are numerous documented situations involving concerns about quality issues in HCA-owned hospitals associated with low staffing levels, including preventable patient deaths, infection control breakdowns, and at least one hospital being threatened with termination from the Medicare program,” Pascrell writes in the letter to Becerra. “In light of reports that there may be misconduct and potentially the improper shifting of taxpayer dollars, I ask that HHS launch an investigation into the allegations leveled against HCA regarding its emergency department admissions practice, including its joint venture with EmCare.”
If Health and Human Services chooses to investigate, it wouldn't be the first time HCA is under the federal government’s eye in relation to Medicare payments. In 1997, agents from the FBI, IRS, the Department of Health and Health and Human Services raided Columbia/HCA’s operations in El Paso, Texas, following a U.S. Senate subcommittee allegation that it had evidence of improper Medicare claims. In all, the FBI raided HCA operations in six states as a result of the allegations.
HCA eventually reached a $1.7 billion settlement with the government to resolve, what was at the time, the largest health care fraud case in U.S. history.
