Nearly three years ago I wrote about rural hospital lab scams. That’s when a shady marketing consultant working with scammers convinces struggling rural hospitals that they have a solution for precarious hospital finances. Basically, every lab test ordered by affiliated physicians is billed through a rural hospital with a more lucrative lab contract. The hospital makes money for doing nothing, while the marketing guys get a big, fat cut of the proceeds. You and I pay higher prices as a result. The following is what I wrote three years ago:
With less competition from commercial labs, rural hospitals are often able to command higher fees for lab tests than the prices routinely available in larger cities. In addition, hospital labs always charge more for their services than laboratories outside hospitals. Unscrupulous lab marketing consultants have figured out a way to take advantage of the difference between rural and urban lab prices. They’ve done this by partnering with rural hospitals in order to charge urban patients the higher rural hospital lab testing fees. This occurs even though patients may live far away from the rural hospital billing for lab tests. Patients may even live out of state.
In some cases, the shady marketers buy or take over management of the rural hospital to reap the rewards of billing higher rates for lab work actually performed at less expensive commercial labs in big cities. A little, struggling hospital that barely grosses, say, $5 million a year off local inpatients may bill $10 million a year in lab tests performed hundreds of miles away for patients who have never set foot in the hospital. This scam is called “pass-through billing.”
As an example, I can get a complete blood count with a comprehensive metabolic panel for $44 to $46 at two major commercial labs, one of which has a location only 1 mile away from my house. Let’s assume I go to my local doctor, who tells me she ordered a blood test for me. I drive to the Walmart near my house and stop by Quest Diagnostics for a blood draw. A few days later the physician’s office calls to say my results were fine. A month later I received a statement in the mail informing me a $440 withdrawal was taken from my health savings account and paid to a hospital in far West Texas for lab work. I would not be happy knowing a test I could have purchased for $44 instead cost 10 times that amount through a shady price-gouging arrangement.
As implausible as this sounds, an insurance company in Texas is claiming in a lawsuit that something similar is happening. United Healthcare of Texas has filed a lawsuit against Radiology Partners, who stand accused of funneling radiology billings through a small Houston radiology practice it acquired in 2014. The following are excerpts from the lawsuit.
Since as early as 2014, Radiology Partners has engaged in a classic form of healthcare fraud called pass-through billing. Simply put, Radiology Partners, caused its affiliated medical groups to bill for services that they did not perform.
Acting in concert with its affiliated medical groups, Radiology Partners deliberately caused thousands of claims to be improperly billed to United under network contracts, even though the in-network provider did not perform the underlying services being billed.
For example, one of Radiology Partners’ affiliated radiology groups, Singleton Associates P.A. (“Singleton”), was a small radiology practice located in Houston, Texas that was contracted to practice at two local hospitals.
Singleton obtained particularly high reimbursement rates from United under a contract executed in 1998 (the “Agreement”). The Agreement made clear that Singleton was only entitled to reimbursement for services performed by its “Medical Group Physicians” who were “shareholders, partners or employees” of Singleton, prohibited Singleton from assigning its rights and responsibilities under the contract without written consent from United, and required Singleton to notify United of any changes in ownership or control.
The scheme grew over time. In 2013, before Radiology Partners took over Singleton, 70 unique providers performed services that were billed under the Agreement. That number increased to more than 150 unique providers in 2017; nearly 315 unique providers in 2018; more than 500 unique providers in 2019; and to more than 1,000 unique providers in 2022. Upon information and belief, most of the providers billing under Singleton’s contract since at least 2017 were practicing with medical groups other than Singleton.
Indeed, the acquisition of Singleton was probably worth a lot more money than normal market value due to its lucrative contract. The contract dating back to 1998 was an agreement for United Healthcare to pay Singleton 600% of what Medicare pays for the same service.
Radiology Partners was founded in 2012 and has been expanding rapidly. It is now the largest radiology practice in the nation, with more than 3,300 radiologists serving 3,250 hospitals. Its physicians serve 20 million patients annually, interpreting roughly 53 million scans.
A Texas Neuroradiologist blogged about the controversial lawsuit in United against Radiology Partners | Ben White. It’s a sordid tale of the insidious ways health care goes awry when third parties pay the bills, and bean counters try to game the system.
Devon, for a PHD you have been educated well beyond your intelligence. I mean really, who in their right mind would spend the money that is compounding tax-free? Devon, you have your HSA [automatically] pay for your little Qualified Medical Expenses (QME). Trust me, smart people pay the $100 at the dentist out of a normal VISA instead of their HSA – VISA because they have the FREEDOM to let their money GROW and account holders take the $100 out later after the balance grows. Like in retirement to buy a boat. HSA people may use their HSA funds after 65 for [any reason], buy another boat, and there is no penalty. Also, unlike those old IRA and 401Ks that require distribution at about 72, which is young, HSAs have no mandatory distributions. All in all the HSA with it’s tax zapping qualities is the most favorable account in the federal tax code. VOYA research reported only 2% of workers understood the benefits of an HSA. However, they also report that 32 million people have HSAs.
VOYA Research indicates there are millions of people with HSAs that don’t understand the value of tax-free HSAs. People exactly like you [[Devon]], you are the unknowing 98%. Unreal!
The human lifespan is long enough in the 21st Century for people to benefit from wealth compounding in tax-free accounts for retirement. According to Einstein, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” At first this quote might seem like a bit of an exaggeration but the math behind it shows that it is not. Devon, come on man, you have a [PHD in economics] and you are telling everybody to spend their HSA funds now when they are young and healthy before compounding.
It’s that kind of thinking is why we have a $32 trillion federal debt growing by the second Devon.
DON’T SPEND YOUR HSA FUNDS but keep a receipt for later tax-free withdrawals.
Devon, Nebraska State employee health insurance for a 30-year-old male is $833.14 per month with a $4,000 Out-Of-Pocket with surgery. (Employer-Sponsored GROUP Health Plan)
Obamacare Government Planning has the rural areas paying more. Like your payments above.
Obamacare premiums in Omaha are $372 per month with $9,100 Out-Of-Pocket Blue Cross
Obamacare premiums in Lincoln are $388 per month with $9,100 OO OOP Blue Cross
Obamacare premiums in Scotts Bluff are $537 per month with $9,100 OOP Blue Cross
Trump’s low-cost Individual STM FREE MARKET is cheaper in rural areas. (BACKWARDS)
Trump’s low-cost individual Omaha $136 per month $5,000 OOP
Trump’s low-cost individual lincoln $129 per month $5,000 OOP
Trump’s low-cost individual Scotts Bluff $125 per month $5,000 OOP
Free Market rural prices are exactly backwards from the Government Planning prices!
Employer-based health insurance is out of hand. Google Nebraska State Employee Benefits.
State employees pay $174 a month out of their check for their part of the $833.14 monthly premium! Nebraska has the [unmitigated audacity] to sell insurance to full-time employees for MORE than the free and open market and call it a BENEFIT! Wait, it gets worse. If the employee is part-time (29 hours per week) the State of Nebraska increases her premiums out of her check to a whopping $286.60 each month (page 22)!
Wait, it gets much worse. If this employee got ovarian cancer and couldn’t work
her COBRA premium would EXPLODE to $849.80 (page 41) a month. To survive cancer you need a positive attitude and that’s hard to do when you have no hair, can’t work and the state has more than tripled up your health insurance premiums. Nebraska bills sick employees with families for COBRA a stunning $36,200.76 per year (page 41), more than any other state!
AMAZING – Nebraska has employees paying more than the Free and Open Market plus the taxpayers are paying through the nose. Its like the Chicago Mob and using Al Capone Ethics! We need to break up this Medical Mafia criminal organization with the RICO ACT – PRONTO!
Note to Devon:
One wonders why United HealthCare did not occasionally review its 2013 contract to pay 600% of Medicare rates to Signature, or anyone else. Health insurers have been able to just let these contracts go on and on, and raise premiums to the public when claim payments kept going up,
Notes to Ron:
State employees are fairly well exempt from layoffs, and they have pensions. The result is that state gov’t workforces like in Nebraska are very old, virtually no one quits.
Therefore a young person might indeed do better to get insurance in the private market.
However that young person must be cautious if they consider a short term plan, for these reasons:
– these plans have no coverage for maternity, which they might be planning
– potential claim denials, if they have visited a doctor recently for anything that could worsen;
– no coverage for sports injuries, motorcycle accidents (not terribly serious)
– some short term plans have limits on paying even for the things they do cover. You have to read the actual policy pages to find these. I remember finding a plan that paid only $1,000 per day for hospitalizations, and only $2500 for an appendectomy. This was never mentioned in the marketing materials.
Notes to Bob: State employees are not exempt from ovarian cancer and should a female employee get too sick to work her COBRA for the State of Nebraska would be $36,200.76 per year for the “Regular Plan family coverage.” If she is retireing at 58 with her required service time in her cost for retirement family health insurance is $35,490.96 per year, more than any other state. This is ONE reason United Healthcare is the largest insurance company in the world ranked by collected premium.
— You are incorrect about maternity coverage. Complication of pregnancy is a covered expense and of course a sick baby is covered from the second of birth. This is EXACTLY the way Individual Medical (IM) covered pregnancy before the ACA. People with IM had the opportunity to cover normal child birth by paying an additional premium which nobody did because only people planning to have a child would buy it. Physicians have a package for normal birth that people can pay throughout their pregnancy on monthly payments.
— Pre-existing Conditions are not covered. People don’t wait till they get cancer and then buy insurance to pay their bills. These people get Obamacare. You stretch the imagination when you call Obamacare insurance! It is a way sick people can get taxpayers to pay their medical expenses should they become sick or hurt. That is a far cry from insurance which pays for an unforeseen claim or expense.
— You are incorrect on sports injuries. Trump’s low-cost STM pays for children in high school sports. An injury sustained while participating in any intercollegiate sport or professional or semi-professional contact sports is excluded.
— PLEASE Bob…of course people should read the covered expenses. That is a stupid comment that you found an Indemnity STM that pays only so much a day with a small surgery schedule. Those plans are not usually STM because no insurance company is going to stop people from paying them for such crap. I don’t believe you that covered expenses were not listed.
FYI Bob – Nebraska is paying United Healthcare $35,490.96 a year for family insurance with a $4,000 per person out of pocket. Trump’s low-cost STM in the Lincoln, NE zip code of 68510 is less than $7,452.96 per year, which is removed from her check, for a 30-year-old couple and with a child. Also Bob the maximum out-of-pocket on an accident is only $250, a SAVINGS of $3,750. Which progran would they prefer if that little boy broke his arm? IQ Test right?
Also Bob, the small $250 deductible for accidents vanishes to ZERO after 2 years on Trump’s STM! ZERO deductible then 100% covered expenses with accidents – the free and open market!
Thanks for responses. You raise some good points.
However, I would counter in two aspects:
1. You state that young couples should pay for a normal childbirth without insurance.
I realize that cost estimates are sometimes unreliable, but Forbes magazine says the average cost of normal childbirth is $18,000. I would rather not have young couples start off with that kind of debt, I think it is OK for the rest of us to pay higher premiums to cover all aspects of birth.
2. You are correct that some buyers are ignorant of the difference between an indemnity plan and real insurance. My experience was that the people who wound up with indemnity coverage had pathetically little understanding of the difference. They sure found out at claim time, though.
I can accept a government that protects people from that level of ignorance, in this case by much sterner regulation of marketing materials, I can even accept a government banning some indemnity plans, which I know you don’t like.
I have never sold an indemnity plan in my life. My wife was teaching aerobic classes when she became pregnant with a son in 1984. So she didn’t gain NORMAL weight. She was labeled “at risk” and we paid EXTRA at Denver General. She didn’t take one shot, not even for the episiotomy, and was in the hospital 22 hours when we left and the bill was $22,000 (Remember – 1984). We were scammed and we paid for years and years! Today, the government steps in with medicaid for way too many babies!! What a scam on taxpayers!
Hell I could have delivered that baby.
That is a very impressive feat to have paid off that hospital bill. When my last son was born in 1991, I had a $5,000 bill and never did pay it off totally.
I would think that would make you more sympathetic to broad coverage for childbirth, but who knows.
Medicaid today probably pays for close to 2 million births. I don’t think it’s a scam…there are no secrets about the coverage.
I am not opposed to it. If we cancelled Medicaid, the poor would still have children and hospitals would write off the bills after futile efforts at collection. Would anyone be better off?
If Medicaid is spending $30 billion a year on childbirths, the nation can afford it. We spend $30 billion every 12 days or so on Medicare, for people who do not have their entire life before them.