Union Accuses HCA Healthcare of $1.8 Billion in Overpayments Due to Admissions

Sarasota, FL (WorkersCompensation.com) – Nashville based HCA Healthcare appears to be under the radar for alleged fraud, according to a recent report from the healthcare workers union, Service Employees International Union (SEIU).

According to the HCA fact sheet, the large healthcare system operates 184 hospitals and 2,000 offices across 21 states and the UK. The organization has over 270,000 colleagues, 94,000 registered nurses, and 38,000 active physicians. Accounting for around 5 percent of all patient visits, the organization boasts an annual rate of 31.2 million patient encounters, and 8.9 million emergency room visits. In 2021, HCA was listed among the World’s Most Ethical Companies Honoree List, for the tenth year in a row.

The 45 page report released from SEIU claims to be an analysis of Medicare claims data as well as lawsuits filed against HCA.  The group alleges that through high admission rates HCA has fraudulently overbilled Medicare by 370,000 hospital admissions to the tune of $1.8B since 2008.

According to the report, SEIU alleges that many of HCA’s facilities exceeded their expected emergency admission totals by more than 20 percent in 2019. The analysis shows that the issue is not limited to just certain hospitals which may be outliers due to acute population, but is systemic throughout the organization as HCA as a whole has exceeded expected admission rates by 10 percent since 2014.

The analysts point out that during this period of time, the national average for emergency department admissions has actually decreased, with a resulting shift to increasing numbers of observation patients. In fact, the national average of observation services nearly doubled to around 8 percent in 2019. However, when comparing against the national averages HCA’s observation rates have remained steady at around 5 to 6 percent.  One question raised by the analysts is that if the organization truly has an acute population for the high rates of admission, why are they not billing for more observation claims when reimbursement is higher. A theory brought forth in the report is that the push for admissions stems from corporate executives for cases where non-HCA hospitals would have treated a patient as outpatient and discharged.

The same trend was observed in high-level evaluation and management codes such as 99285. The higher level the evaluation code, the more time and complexity is involved, with higher-level codes reserved for the most acute cases. The national average for level 5 codes doubled from 14 percent in 2008 to 30 percent in 2019. By comparison, the HCA average was less than the national average every year, and less than half the national average in 2019. The analysts theorize that level 5 patients are allegedly being moved to an inpatient status.

As support for their analysis conclusions, the writers point to HCA’s corporate statements to investors. In 2011, executives allegedly informed investors that the emergency department accounted for around 60 percent of HCA’s admissions. By 2017, that percentage had grown to 70 percent.

In a response to the report allegations, HCA issued a statement to Becker's Hospital Review refuting the allegations stating,”… Our hospitals are staffed by physicians, clinicians and nurses who work tirelessly to ensure our patients receive medically necessary care in the appropriate clinical setting. We are confident that our operational processes and procedures are working well and that we are meeting the healthcare needs of our patients and communities. "

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