Tag: Hospitals

ER’s Error Lands a 4-Year-Old in Collections (For Care He Didn’t Receive)

Dr. Sara McLin thought she made the right choice by going to an in-network emergency room near her Florida home after her 4-year-old burned his hand on a stove last Memorial Day weekend.

Her family is insured through her husband’s employer, HCA Healthcare, a Nashville-based health system that operates more hospitals than any other system in the nation. So McLin knew that a nearby stand-alone emergency room, HCA Florida Lutz Emergency, would be in their plan’s provider network.

But McLin said a doctor there told her she couldn’t treat her son, Keeling, because he had second- and third-degree burns that needed a higher level of care. The doctor referred them to the burn center at HCA Florida Blake Hospital, about a 90-minute drive away.

McLin, who is a dentist, said the doctor told her the stand-alone ER would not charge for the visit because they did not provide treatment.

“I don’t remember exactly how she phrased it. But something along the lines of, ‘Well, we won’t even call this a visit, because we can’t do anything,’” McLin said.

At Blake Hospital, she said, a doctor diagnosed Keeling with a second-degree burn, drained the blisters, bandaged his hand, and sent them home with instructions on how to care for the wound.

“I didn’t think anything more of it,” McLin said.

Then the bills came.

The Patient: Keeling McLin, now 5, is covered by UnitedHealthcare through his father’s employer.

Medical Service: At the stand-alone emergency room, a physician assessed Keeling and sent him to another facility for treatment. “Keeling needs a burn center,” the doctor wrote in the record of his visit.

Service Provider: Envision Physician Services, which employed the emergency room physician at HCA Florida Lutz Emergency in Lutz, Florida, near Tampa, and HCA Florida Trinity Hospital, the main, for-profit hospital to which the stand-alone emergency room belonged.

Total Bill: For the emergency room visit, Envision Physician Services billed $829 to insurance and about $72 to the family. HCA Florida Trinity Hospital billed Keeling about $129, noting it had applied an “uninsured discount.” An itemization showed the original charge had been nearly $1,509 before adjustments and discounts.

What Gives: The stand-alone emergency room and ER doctor, who saw Keeling but referred him to another hospital, billed for his visit. But McLin soon learned she was unable to dispute some of the charges — because her young child’s name was on one of the bills, not hers.

A photo of a 5-year-old boy indoors.
Keeling McLin, now 5, burned his hand on a stove last Memorial Day weekend. An emergency room doctor referred him to a burn center for treatment, and his family ended up getting billed for the ER visit, anyway. His mother initially could not dispute some of the charges because the bills were addressed not to her, but to Keeling.(Zack Wittman for KHN)

Months after the ER visit, McLin received a bill addressed to the “parents of Keeling McLin” from Envision Physician Services, the provider staffing service that employed the ER doctor at Lutz. McLin recalled the doctor’s promise that they would not be billed. “I should have made them write something down to that effect,” she said.

She said she called her insurer, UnitedHealthcare, and a representative told her not to pay the bill.

She received an insurance statement that identified the bill from Envision’s doctor — an out-of-network provider working in an in-network emergency room — as a “surprise bill” for which the provider may charge only copays or other cost-sharing costs under federal law. McLin said she had not heard anything since then about the bill.

After being contacted by KHN, Aliese Polk, an Envision spokesperson, said in an email that Envision would waive the debt, apologizing to Keeling’s family “for the misunderstanding.”

She described the ER doctor’s evaluation, determination, and referral as a medical service. She said the bill was for cost sharing for the visit — not the difference between what the doctor charged and what insurance paid, as the law prohibits.

“We recognize the patient’s family may have understood at the time of treatment that there would be no charge for the visit, including the medical service provided by our physician,” Polk said. “Unfortunately, this courtesy adjustment was not captured when the claim was processed.”

Maria Gordon Shydlo, a UnitedHealthcare spokesperson, said the insurer believed the matter had been resolved and did not follow up on requests for an interview, even after McLin waived federal health privacy protections, which would allow the insurer to speak to the reporter about the case.

McLin also received a bill from HCA Florida Trinity Hospital for its stand-alone ER at Lutz and decided to dispute the charges.

But after calling the hospital to appeal, McLin said, the billing department would not discuss the debt with her because the statement was in her young son’s name.

“They had him as the guarantor,” McLin said. Unlike Envision, which billed Keeling’s parents and their insurance, McLin said the hospital listed the child as “unemployed, uninsured.”

The child’s ER record also included his date of birth and doctor’s notes referencing his age. McLin said she wrote to HCA in November asking to appeal the bill and that a billing representative told her over the phone that it would put the debt on hold and review the dispute.

“I never heard anything back and assumed we were good,” McLin said.

Then, in January, she received a letter from Medicredit, a collection agency and an HCA subsidiary, stating that Keeling owed $129 and that he had until mid-February to contest the debt. KHN was unable to make contact with Medicredit representatives, and HCA Healthcare did not respond to requests for comment from its subsidiary.

Once again, Sara McLin’s name was not on the debt collector’s letter, and she said Medicredit representatives refused to discuss the debt with her because it was in her son’s name. She said she called HCA, too. “They said, ‘We can’t help you. We don’t have the case anymore,’” she said.

Erin Fuse Brown, a law professor and director of the Center for Law, Health & Society at Georgia State University, said McLin did everything right and that it is unusual for a parent to be barred from discussing a debt related to their minor child.

“The fact that the hospital wouldn’t even talk to her strikes me as the part that is absurd. It’s absurd as a business matter. It’s absurd as a privacy matter,” Fuse Brown said, adding that federal health privacy laws allow a parent or legal guardian to access their dependent’s medical information.

Fuse Brown said the hospital should have been able to correct the error quickly with more information, such as a birth certificate or other document establishing that McLin was Keeling’s parent. At the very least, she said, it could have given McLin notice before sending the bill to collections.

“You get the feeling that it’s this large, automated process, that there’s no human to get through to, that there’s no human to talk to and override the mistake,” Fuse Brown said. “Maybe it’s routine, but she couldn’t even talk to someone to correct a correctable billing error, and then the system just steamrolls over the patient.”

A photo of a mother and her son posing for a portrait together.
Sara McLin with her son, Keeling. (Zack Wittman for KHN)
A photo of a mother holding up her young son's right hand.
Keeling McLin shows the hand he burned on the stove last Memorial Day weekend. (Zack Wittman for KHN)

The Resolution: When the collection agency’s deadline passed without resolution, McLin said she felt frustrated. “Nobody can explain to me who has to approve talking to me,” she said. “I don’t know who that person is or what the process is.”

After KHN contacted the health system, HCA Healthcare canceled the family’s debt. HCA representatives declined to be interviewed on the record despite also receiving a privacy waiver from McLin.

“We have attempted to contact Mrs. McLin to apologize to her for the inconvenience this has caused her and to let her know that there is a zero balance on the account,” Debra McKell, marketing director for HCA West Florida Division, said in an email on March 3. “We also will be sharing with her that we are reviewing our processes to ensure this does not happen again.”

McLin later received a letter from HCA stating that the account had been cleared. She also said she received a call from a customer service representative informing her that the debt had not been reported to any credit agencies.

She said she was pleased, but that patients should not have to struggle to correct a billing error before it is sent to a collection agency and potentially ruins their credit.

“It’s the principle of the thing that’s annoying me at this point,” she said.

The Takeaway: Though the notion of a debt collector pursuing a 4-year-old boy may seem farcical, it happens. When seeking medical care for a minor, it is important for the parent or guardian to ensure their name is listed as the responsible party.

Consumers who find themselves fighting a medical billing error need to “think like a lawyer,” Fuse Brown said, including documenting every interaction with the debt collector, getting any promises in writing, and recording phone calls. (State laws vary about how many parties on a call must give permission to record a conversation.)

Patients do not have to give up once a bill goes to collections, Fuse Brown said. “Once you hear from a debt collector, it’s not like the game is over and you lose,” she said. “Consumers do have rights.”

François de Brantes, a home health company executive and expert on how money flows through the health care system, said that hospital billing errors are not uncommon but that he had never heard of a situation like the one McLin experienced. He called it “puzzling” that HCA would issue a formal claim in a dependent child’s name.

De Brantes said those in a similar situation should also ensure that the collection agency removes any record of a debt against a minor to protect the child’s financial future.

“This stuff happens, where you have children who are improperly billed for stuff that they shouldn’t be billed, and they end up in collection,” he said. “Then the kid finds themselves with a collection record and they can’t get loans in the future, potentially student loans.”

Bill of the Month is a crowdsourced investigation by KHN and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!

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A Progress Check on Hospital Price Transparency

For decades, U.S. hospitals have generally stonewalled patients who wanted to know ahead of time how much their care would cost. Now that’s changing — but there’s a vigorous debate over what hospitals are disclosing.

Under a federal rule in effect since 2021, hospitals nationwide have been laboring to post a mountain of data online that spells out their prices for every service, drug, and item they provide, including the actual prices they’ve negotiated with insurers and the amounts that cash-paying patients would be charged. They’ve done so begrudgingly and only after losing a lawsuit that challenged the federal rule.

How well they’re doing depends on whom you ask.

The rule aims to pull back the curtain on opaque hospital prices that may vary widely by hospital for the same service or even within the same hospital. The expectation is that price transparency will boost competition, giving consumers and employers a way to compare prices and make informed choices, ultimately driving down the cost of care. Whether that will happen is not yet clear.

Insurers and large employers are also required to post their negotiated prices with all their providers, under separate rules that took effect last summer.

Hospitals have made “substantial progress,” according to an analysis by the federal Centers for Medicare & Medicaid Services of 600 randomly selected hospitals that was published in the journal Health Affairs last month. The agency looked at whether hospitals had met their obligation to post price information online in two key formats: a “shoppable” list of at least 300 services for consumers, and a comprehensive machine-readable file that incorporates all the services for which the hospital has standard charges. This file should be in a format that allows researchers, regulators, and others to analyze the data.

CMS found that 70% of hospitals published both lists in 2022. An additional 12% published one or the other. By contrast, the agency’s previous progress assessment in 2021 found that just 27% of 235 hospitals had both types of lists.

The 2022 analysis “represents a marked improvement,” said Dr. Meena Seshamani, deputy administrator and director of the Center for Medicare at CMS, in a statement. But she also said the advances are still “not sufficient” and CMS will continue to use “technical assistance and enforcement activity” so that all hospitals “fully comply with the law.”

The American Hospital Association said the CMS assessment demonstrated the progress hospitals had made under very challenging circumstances as they grappled with the covid-19 pandemic.

“These are complicated policies that went into effect in the most complicated time in hospitals’ history,” said Molly Smith, group vice president for policy at the trade association. “And we have seen increases in compliance over the past 18 months.”

Some groups that have looked at the hospitals’ posted price data, though, were less upbeat. In an analysis published last month, Patient Rights Advocate examined 2,000 hospitals’ listings and found that only 489 of them, 24.5% of the total, were compliant with all the requirements of the rule. An earlier analysis in August 2022 found that 16% met all the requirements.

The advocacy group’s analysis covered not only the two types of lists that CMS looked for but also checked whether the hospitals included required data on specific types of standard charges for every service offered, such as the gross or “chargemaster” charge before any discounts are applied, the discounted cash price, and the negotiated charge by insurer.

Although most hospitals have published files online, too often the data is incomplete, illegible, or not clearly associated with specific health plans or insurers, said Cynthia Fisher, founder and chair of Patient Rights Advocate, which promotes health care price transparency.

“As hospitals continue to post incomplete files with swaths of missing prices, patients are unable to accurately compare prices across hospitals and across plans to make the best health care decisions and protect themselves from overcharges,” Fisher said. Such hospitals were considered noncompliant in the PRA analysis.

The hospital association faulted PRA’s analysis. The contracts that hospitals have with health plans vary substantially from one to the next, and prices are not always based on a simple dollar amount, said Terry Cunningham, AHA’s director of policy. They might be based on a bundle of services or on volume, for example, he said.

“It’s both frustrating and problematic for these other organizations to be weighing in, saying, ‘This cell shouldn’t be blank,’” Cunningham said.

In their 2020 lawsuit, hospitals argued that they should not be required to disclose privately negotiated prices, and maintained that doing so would confuse patients and lead to anti-competitive behavior by insurers.

Last summer, price transparency requirements took effect in the health insurance industry as well, complementing and providing a cross-reference tool for what hospitals have posted. The insurer transparency requirements are even broader than those for hospitals: Insurers and self-funded employers must list every negotiated rate they have with every doctor, hospital, and other health care providers.

Some critics charge that data isn’t user-friendly either. Sens. Maggie Hassan (D-N.H.) and Mike Braun (R-Ind.) sent a letter March 6 to CMS Administrator Chiquita Brooks-LaSure encouraging the agency to take steps to close “technical loopholes” such as large files and a lack of standardization that make it difficult to use the data they’re reporting.

That’s where pricing platforms like Turquoise Health come in. The data becoming available from hospitals and insurers is a vast treasure trove the company is mining to devise user-friendly tools that consumers and businesses can use to discover and compare prices.

In its own analysis of how effective hospital price transparency efforts were in 2022’s third quarter, Turquoise Health found that 55% of the more than 4,900 acute care hospitals that posted machine-readable files were “complete,” meaning they posted the cash, list, and negotiated rates for a “significant quantity” of items and services. Twenty-four percent of hospitals were judged to be “mostly complete.” (The analysis didn’t evaluate the second type of posting, the list of shoppable services.)

According to Chris Severn, Turquoise Health co-founder and CEO, the company uses a scoring algorithm of 60 variables to assess how complete a hospital’s file is.

“What you end up with is a more nuanced look at these files that hopefully takes into consideration shades of gray,” Severn said, rather than a simple pass-fail rating.

Regardless of the differences in how the hospital disclosures are evaluated, experts generally agree that CMS should require data be reported in a standardized format for ease of comparison and enforcement. CMS has developed a template, but hospitals aren’t required to use it.

For price transparency to work, enforcement also needs consistent attention, experts say. The Biden administration increased the maximum potential penalty to more than $2 million annually per hospital for 2022. Still, last year CMS penalized just two hospitals for noncompliance even though 30% of hospitals didn’t meet the requirement to post both a machine-readable file of prices as well as a shoppable list.

CMS provided technical assistance to many hospitals to help them come into compliance, said Seshamani, and it also plans stronger enforcement actions.

She said the agency will “continue to expedite” the time frame hospitals have to reach full compliance after submitting a corrective action plan, which indicates they have fallen short on some posting requirements. “CMS also plans to take aggressive additional steps to identify and prioritize action against hospitals that have failed entirely to post files,” she said.

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Congressman Seeks to Plug ‘Shocking Loophole’ Exposed by KHN Investigation

A U.S. lawmaker is taking action after a KHN investigation exposed weaknesses in the federal system meant to stop repeat Medicare and Medicaid fraud and abuse.

Rep. Lloyd Doggett (D-Texas) said he decided to introduce a bill in the House late last week after KHN’s reporting revealed what he called a “shocking loophole.”

“The ability of fraudsters to continue billing Medicare for services is outrageous,” Doggett said. “This is an obvious correction that is needed to safeguard our system. Wherever there are large amounts of government money available, someone tries to steal it.”

KHN found a laundry list of weaknesses that allows people accused or convicted of fraud to easily sidestep bans imposed by federal officials. Among those gaps is the Centers for Medicare & Medicaid Services’ lack of authority to deny or revoke National Provider Identifier, or NPI, numbers after federal regulators have prohibited a person or business from receiving payments from government programs.

Doctors, nurses, other practitioners, and health businesses use the unique, 10-digit NPI numbers to bill and file claims with insurers and others, including Medicare and Medicaid.

Taking away the NPI would “be equivalent of prohibiting a practitioner from practicing in total,” Dara Corrigan, director of CMS’ Center for Program Integrity, wrote in an email response to questions about KHN’s investigation. CMS declined to comment on Doggett’s proposed legislation.

The bill, HR 1745, would give CMS the authority to deactivate NPIs tied to anyone convicted of waste, fraud, or abuse and whose name appears on the exclusions list kept by the Office of Inspector General for the U.S. Department of Health and Human Services. The proposed law would also require CMS to implement recommendations that the inspector general has made to improve NPI reporting and provider transparency.

“This strikes me as what should be an easy bipartisan measure,” Doggett said, adding that he had presented the bill in a face-to-face meeting with Rep. Jason Smith (R-Mo.), who chairs the House Ways and Means Committee. Doggett also alerted that panel’s health subcommittee chair, Rep. Vern Buchanan (R-Fla.).

“They both talk about the need to eliminate fraud, and this is one modest but important way to do it,” Doggett said. Neither Smith’s nor Buchanan’s offices responded to requests for comment.

The OIG declined to comment.

Former Justice Department officials told KHN that repeat violators are savvy and find ways to circumvent the system. KHN examined a sample of 300 health care business owners and executives who are among more than 1,600 on the OIG’s exclusion list since January 2017. Journalists reviewed court and property records, social media, and other publicly available documents.

KHN found:

  • Eight people appeared to be serving or served in roles that could violate their bans;
  • Six transferred control of a business to family or household members;
  • Nine had previous, unrelated felony or fraud convictions, and went on to defraud the health care system;
  • And seven were repeat violators, some of whom raked in tens of millions of federal health care dollars before getting caught by officials after a prior exclusion.

Doggett’s bill is “a pretty smart step in the right direction in fixing this issue,” said John Kelly, a former assistant chief of health care fraud at the Department of Justice who is now a partner for the law firm Barnes & Thornburg. Kelly had previously recommended that NPIs should be “essentially wiped clean” when a person is on the exclusions list.

Kelly, who confirmed that Doggett’s office reached out to him after KHN’s investigation was published in December, said taking the NPI number away “certainly doesn’t eliminate all risk” but it’s a move “in the right direction.”

“If you want to bill Medicare, you have to have a valid NPI,” Kelly said.

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Banning Noncompete Contracts for Medical Staff Riles Hospitals

Dr. Jacqui O’Kane took a job with a hospital in southern Georgia in 2020, as the lone doctor in a primary care clinic in a small town that’s a medically underserved area. She soon attracted nearly 3,000 patients.

But she said the hospital pressed her to take more new patients, so she had to work nights and weekends — not ideal for the mother of two young daughters. She thought about opening her own practice in town, which would give her more control over her schedule.

The problem was that her three-year contract included a noncompete clause barring her from practicing within 50 miles of the hospital for two years after it ended.

So, she has decided to join a practice in South Carolina. That means she and her husband will sell their house, move hundreds of miles, and enroll their children in a new school.

“It sucks,” she said. “I know my patients very well, and I feel like I’m being forced to abandon them. But I can’t stay in this job because it’s unhealthy for me to work this much.”

In January, the Federal Trade Commission proposed to end predicaments like O’Kane’s by prohibiting noncompete clauses in employment contracts. “The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” said Lina Khan, the FTC chairperson.

The proposed rule would prohibit employment contract provisions that block employees or contractors from working for a competing employer when they move on, or from starting a competing business. Such contracts typically bar people from working within a certain geographic area for a period after the job ends.

The FTC estimates that 30 million workers are bound by noncompete clauses. It says ending those provisions would boost economic competition, reduce prices, and increase workers’ earnings overall by up to $296 billion a year.

Eliminating noncompete contracts would allow doctors to practice wherever their services are needed, which would improve patients’ access to care. They say it would free them to speak out about unsafe conditions for patients, since they wouldn’t have to worry about getting fired and not being able to continue working in their community.

But the FTC’s proposal faces resistance from employers in all industries, including hospitals and private equity-backed medical groups that employ thousands of physicians, nurse practitioners, and other medical professionals.

It’s about money for them, too. They say eliminating noncompetes would drive up the cost of hospital care because hospitals would have to pay physicians more to keep them. They also say noncompete clauses are necessary to protect proprietary information and investments in employee training, and to prevent employees from taking clients and patients with them when they leave.

Business and hospital groups are likely to sue to block the rule, arguing that Congress hasn’t authorized the commission to regulate noncompete clauses. While there is bipartisan support in Congress for legislation that would restrict noncompete clauses and authorize FTC action, the bill hasn’t advanced; similar legislation stalled in past years.

Health care industry groups hope to block any change with the argument that the FTC lacks statutory authority to regulate nonprofit, or tax-exempt, hospitals, which account for nearly 60% of all U.S. community hospitals. In the proposed rule, the FTC acknowledged that entities not conducting business for profit may not be subject to the rule because they are exempt from coverage under the Federal Trade Commission Act, the law that gives the agency its authority.

“The rule would create an unlevel playing field because we compete with nonprofit and public hospitals that wouldn’t be subject to it,” said Chip Kahn, CEO of the Federation of American Hospitals, which represents for-profit hospital systems.

But other experts aren’t sure the FTC lacks authority over nonprofits. While the FTC Act exempts nonprofits, the commission has acted many times under the Sherman Act and the Clayton Act, federal antitrust laws used to block anti-competitive conduct by nonprofit hospital systems. It’s not clear whether the FTC will clarify this issue before it finalizes the rule.

“We fully support having the noncompete ban apply to all hospitals,” said Dr. Jonathan Jones, president of the American Academy of Emergency Medicine, half of whose members are bound by noncompetes.

California, North Dakota, and Oklahoma already ban enforcement of noncompete clauses for all employees, while six other states prohibit enforcement of noncompete clauses for physicians. Even in states without bans, judges have invalidated noncompetes when they found them to be overbroad or unreasonable.

But it can cost tens of thousands of dollars in legal fees to challenge a noncompete clause, and other employers may not want to take the risk of hiring a person in the middle of a legal fight, said Luke Campbell, a Seattle attorney who represents physicians.

The FTC rule also would bar the use of nondisclosure or training repayment agreements in employment contracts if they functioned as de facto noncompetes.

Hospitals often require nurses to sign training repayment agreement provisions, called TRAPs, which nursing groups say lock nurses into jobs by demanding they pay as much as $20,000, for what’s essentially job orientation, if they leave before two years. National Nurses United, a labor union, wants the FTC to explicitly prohibit TRAPs.

As of last year, nearly three-quarters of all U.S. physicians were employed by hospital systems or other companies, with many working under noncompete agreements. A 2018 survey found that nearly half of primary care physicians in California, Illinois, Georgia, Pennsylvania, and Texas were bound by noncompetes.

Private equity-owned staffing firms such as TeamHealth, Envision Healthcare, and Sound Physicians, which provide emergency physicians and other medical professionals to work in hospitals, commonly use noncompete provisions. None of those three companies agreed to talk about their employment contracts. As for-profit employers, noncompete clauses in their contracts clearly would be barred even if their employees were working in nonprofit hospitals.

Hospitals, insurers, and physician-owned medical groups also use noncompetes in employing doctors and other medical professionals.

Hospital-based doctors — emergency physicians, anesthesiologists, hospitalists, radiologists, and pathologists — refute the industry’s argument that they would take patients or proprietary information with them.

“We don’t have any trade secrets and we don’t have the capability of stealing patients because we don’t have our own patient referral base,” said Dr. Robert McNamara, the chair of emergency medicine at Temple University.

Instead, he said, noncompetes are a way for the physician staffing firms to lock in their contracts with hospitals. “The private equity group can say to the hospital, ‘You might not like what we’re doing, but if you get rid of us, every single one of your doctors must be replaced,’” McNamara said.

Dr. Vanessa Urbina, a general practice physician in central Florida, also worries about the impact on patients. She left a corporate-owned medical practice in Altamonte Springs last year because of what she said was an abusive environment. Hobbled by a noncompete agreement she signed forbidding her from practicing within 15 miles of the clinic, she opened her own primary care clinic in rural Mount Dora, 19 miles away.

She had to stay in the area because of a child custody agreement. Fighting the noncompete cost her $25,000 in legal fees and lost income. Even though she now must drive farther to transport her daughter to school and back, she’s happier in her new practice. But she’s angry she can’t take care of her former patients.

“They forced me to abandon my patients,” she said. “Now they have to wait three months for an appointment. Noncompetes should be illegal.”

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Legal Questions, Inquiries Intensify Around Noble Health’s Rural Missouri Hospital Closures

A year after private equity-backed Noble Health shuttered two rural Missouri hospitals, patients and former employees grapple with a broken local health system or missing out on millions in unpaid wages and benefits.

The hospitals in Audrain and Callaway counties remain closed as a slew of lawsuits and state and federal investigations grind forward.

In March, Missouri Attorney General Andrew Bailey confirmed a civil investigation. He had previously told local talk radio that there was an “ongoing” investigation into “the hospital issue.”

Bailey’s comment came weeks after the U.S. Department of Labor’s Employee Benefits Security Administration notified executives tied to Noble Health, a startup, that they had violated federal laws and asked them to pay $5.4 million to cover unpaid employee health insurance claims, according to a 13-page letter detailing “interim findings” that was obtained by KHN.

The January letter confirms KHN’s previous reporting, which was informed by employees and patients who described missing paychecks; receiving unexpected, high-dollar medical bills; and going without care, including cancer treatment. According to the letter from federal investigators, the Noble hospitals and their corporate owners collected employee contributions for medical, dental, and vision insurance in 2021 and 2022 but then failed to fund the insurance plans.

The owners and executives were “aware of the harm to participants and, in some cases, were attempting to resolve individual participant complaints,” the letter states, adding that “despite the volume and gravity of complaints and bills received,” they failed to respond.

A photo of a two-year-old boy with spina bifida in a walker.
Ryder Hagedorn was born with spina bifida. His parents have struggled to pay for specialty care since claims were denied by a health plan his mother, Marissa, was offered through her employer. She is one of several former employees of Noble Health who say they were left with substantial medical bills after the company shuttered its two rural Missouri hospitals.(Marissa Hagedorn)

‘Tomfoolery’ and Doing ‘Everybody Dirty’

Marissa Hagedorn, who worked as a hospital laboratory technician, has spent much of the past year starting a new job, caring for her 2-year-old son who was born with spina bifida, and haggling over unpaid medical bills. She told KHN the family owes at least $8,000 for son Ryder’s specialty care in St. Louis, with $6,000 of that in collections. As a Noble employee, Hagedorn said, she was told repeatedly that her employee health insurance would cover Ryder’s care. It didn’t.

Noble has “done everybody dirty,” she said. “We just would like for some responsibility to be taken by this company that didn’t feel the need to get their act together.” Hagedorn’s story of unpaid bills, which was first reported by the local newspaper, the Mexico Ledger, is common among former Noble employees a year after the hospitals closed.

A former employee of the Fulton hospital has filed a class-action lawsuit intended to represent hundreds of employees from both hospitals.

The Jan. 13 letter from federal officials called for responses by Jan. 27 from Noble corporate and hospital executives as well as Platinum Neighbors, which last April bought the hospitals and assumed all liabilities. The letter instructs executives to contact the agency “to discuss how you intend to correct these violations, fund participant claims, and achieve compliance.”

Former employees say their claims have not yet been paid. A Labor Department spokesperson, Grant Vaught, said the agency could not comment on an ongoing investigation.

Separately, the Kansas Department of Labor is reviewing Noble and Platinum’s failure to pay wages and severance to corporate employees. Agency spokesperson Becky Shaffer confirmed that hearings took place in early February on a half-dozen cases totaling more than $1 million in claims for unpaid wages and severance.

Dave Kitchens was among those who filed claims against Noble Health. Kitchens worked briefly as a contract employee and then was hired in October 2021 as a corporate controller, an accounting role in which he was responsible for financial reporting and data analytics. Kitchens provided an audio recording of his hearing to KHN and hopes to eventually get paid more than $90,000 in lost wages, benefits, and severance pay. During the hearing, Kitchens told the administrative judge: “I would just like to be paid what I’m owed.”

Kitchens, who is also named as a fiduciary on the federal investigation, said he was not on Noble’s executive team. When asked by Kansas Administrative Law Judge James Ward whether he expected Noble or the secondary buyer Platinum to pay his wages, Kitchens responded he had “no idea who was in charge.”

“I believe there was some tomfoolery,” Kitchens said.

A ‘Rabbit Hole’ of Responsibility

Noble launched in December 2019 with executives who had never run a hospital, including Donald R. Peterson, a co-founder who prior to joining Noble had been accused of Medicare fraud. Peterson settled that case without admitting wrongdoing and in August 2019 agreed to be excluded for five years from Medicare, Medicaid, and all other taxpayer-funded federal health programs, according to the Health and Human Services Office of Inspector General.

By March 2022, the hospitals had closed and Noble offered explanations on social media, including “a technology issue” and a need to “restructure their operations” to keep the hospitals financially viable. In April, Texas-based Platinum Neighbors paid $2 for the properties and all liabilities, according to the stock purchase agreement.

Despite receiving approval for nearly $20 million in federal covid-19 relief money before it closed the hospitals — funds whose use is still not fully accounted for — Noble had stopped paying its bills, according to court records. Contractors, including nursing agencies, a lab that ran covid tests and landscapers, have filed lawsuits seeking millions.

In Audrain County, where community members still hope to reopen the hospital or build a new one, county leaders filed suit for the repayment of a $1.8 million loan they made to Noble. Former Missouri state senator Jay Wasson also filed suit in September, asking for repayment of a $500,000 loan.

Two Noble Health real estate entities filed bankruptcy petitions this year. One Chapter 11 bankruptcy filing names the Fulton hospital property in Callaway County as an asset and lists nearly $4.9 million in liabilities. A third bankruptcy filing by FMC Clinic includes Noble Health as a codebtor.

In the U.S. District Court of Kansas, Central Bank of the Midwest is suing Nueterra Capital over a $9.6 million loan Noble used to buy the Audrain hospital. The bank alleges Nueterra, a private equity and venture capital firm that in 2022 included Noble as part of its portfolio, signed off as the guarantor of the loan.

Federal investigators listed nearly a dozen people or entities connected to Noble Health as fiduciaries who they say are personally responsible for paying back millions in unpaid medical claims. The letter also detailed Noble Health’s ownership for the first time. The owners included William A. Solomon with a 16.82% share, Thomas W. Carter with a 16.82% share, The Peterson Trust with a 19.63%, and NC Holdings Inc. with 46.72%.

NC Holdings is also listed on the stock sale agreement with Platinum along with several signatures including Jeremy Tasset, chief executive of Nueterra Capital.

Tasset did not respond to a request for comment for this article. In an email to KHN in March 2022, the Nueterra Capital CEO wrote, “We are a minority investor in the real estate and have nothing to do with the operations of the hospitals.” In May 2022, Tasset wrote in an email to KHN that “everything was sold (real estate included) to Platinum Neighbors, a subsidiary of Platinum Team Management.”

It is unclear who owns and controls The Peterson Trust, which federal investigators identified. Peterson, who is listed on Noble’s state registration papers as a director and in other roles, didn’t respond to requests for comment for this article. He previously told KHN that his involvement in Noble didn’t violate his exclusion, in his reading of the law.

He said he owned 3% of the company, citing guidance from the Office of Inspector General for the U.S. Department of Health and Human Services. Federal regulators may exclude companies if someone who is banned has ownership of 5% or more.

In March 2022, Peterson created Noble Health Services, which federal investigators note in their letter was “established to restructure the ownership of multiple Noble entities.” Peterson dissolved that company in July 2022, according to a Missouri business filing.

In September, Peterson posted on LinkedIn that he was “sitting in the Emirates Air lounge in Dubai” to finish up due diligence on “launching a new business.”

A 2013 OIG advisory states that “an excluded individual may not serve in an executive or leadership role” and “may not provide other types of administrative and management services … unless wholly unrelated to federal health care programs.”

KHN examined the federal system meant to stop health care business owners and executives from repeatedly bilking government health programs and found that it failed to do so.

The OIG keeps a public list of people and businesses it has banned from all federal health care programs, such as Medicare and Medicaid. KHN’s review found a system devoid of oversight and rife with legal gray areas.

In the wake of KHN’s reporting, Oregon Sen. Ron Wyden, a Democrat who is the chair of the powerful Senate Finance Committee, said “it’s imperative that federal watchdogs can ensure bad actors are kept out of Medicare.” Sen. Chuck Grassley (R-Iowa) said the government needs to do more and “it’s also up to private-sector entities to do a better job checking against the exclusions list.”

“We can’t just depend on one or the other to do everything,” Grassley said.

In recent months, the Missouri hospitals appear to have been sold twice more, according to public records. Oregon-based Saint Pio of Pietrelcina notified state officials of a change of ownership in December and requested an extension of the hospital licenses, which was denied. In January, Audrain County officials, in its lawsuit, revealed another owner named Pasture Medical, which registered as a Wyoming company on Dec. 27, 2022.

“We haven’t come out of the rabbit hole on this one,” said Steve Bollin, director of the division of regulation and licensure for the Missouri Department of Health and Senior Services. Bollin’s agency, which conducts inspections and approves hospital changes in ownership, said he would support his agency doing financial reviews.

“It’s probably not a bad idea that someone takes a little bit deeper dive. We don’t have that many changes of ownership, but we would need appropriate staffing to do that, including some really good CPAs [certified public accountants].”

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End of Covid Emergency Will Usher in Changes Across the US Health System

The Biden administration’s decision to end the covid-19 public health emergency in May will institute sweeping changes across the health care system that go far beyond many people having to pay more for covid tests.

In response to the pandemic, the federal government in 2020 suspended many of its rules on how care is delivered. That transformed essentially every corner of American health care — from hospitals and nursing homes to public health and treatment for people recovering from addiction.

Now, as the government prepares to reverse some of those steps, here’s a glimpse at ways patients will be affected:

Training Rules for Nursing Home Staff Get Stricter

The end of the emergency means nursing homes will have to meet higher standards for training workers.

Advocates for nursing home residents are eager to see the old, tougher training requirements reinstated, but the industry says that move could worsen staffing shortages plaguing facilities nationwide.

In the early days of the pandemic, to help nursing homes function under the virus’s onslaught, the federal government relaxed training requirements. The Centers for Medicare & Medicaid Services instituted a national policy saying nursing homes needn’t follow regulations requiring nurse aides to undergo at least 75 hours of state-approved training. Normally, a nursing home couldn’t employ aides for more than four months unless they met those requirements.

Last year, CMS decided the relaxed training rules would no longer apply nationwide, but states and facilities could ask for permission to be held to the lower standards. As of March, 17 states had such exemptions, according to CMS — Georgia, Indiana, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, New Jersey, New York, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont, and Washington — as did 356 individual nursing homes in Arizona, California, Delaware, Florida, Illinois, Iowa, Kansas, Kentucky, Michigan, Nebraska, New Hampshire, North Carolina, Ohio, Oregon, Virginia, Wisconsin, and Washington, D.C.

Nurse aides often provide the most direct and labor-intensive care for residents, including bathing and other hygiene-related tasks, feeding, monitoring vital signs, and keeping rooms clean. Research has shown that nursing homes with staffing instability maintain a lower quality of care.

Advocates for nursing home residents are pleased the training exceptions will end but fear that the quality of care could nevertheless deteriorate. That’s because CMS has signaled that, after the looser standards expire, some of the hours that nurse aides logged during the pandemic could count toward their 75 hours of required training. On-the-job experience, however, is not necessarily a sound substitute for the training workers missed, advocates argue.

Adequate training of aides is crucial so “they know what they’re doing before they provide care, for their own good as well as for the residents,” said Toby Edelman, a senior policy attorney for the Center for Medicare Advocacy.

The American Health Care Association, the largest nursing home lobbying group, released a December survey finding that roughly 4 in 5 facilities were dealing with moderate to high levels of staff shortages.

Treatment Threatened for People Recovering From Addiction

A looming rollback of broader access to buprenorphine, an important medication for people in recovery from opioid addiction, is alarming patients and doctors.

During the public health emergency, the Drug Enforcement Administration said providers could prescribe certain controlled substances virtually or over the phone without first conducting an in-person medical evaluation. One of those drugs, buprenorphine, is an opioid that can prevent debilitating withdrawal symptoms for people trying to recover from addiction to other opioids. Research has shown using it more than halves the risk of overdose.

Amid a national epidemic of opioid addiction, if the expanded policy for buprenorphine ends, “thousands of people are going to die,” said Ryan Hampton, an activist who is in recovery.

The DEA in late February proposed regulations that would partly roll back the prescribing of controlled substances through telemedicine. A clinician could use telemedicine to order an initial 30-day supply of medications such as buprenorphine, Ambien, Valium, and Xanax, but patients would need an in-person evaluation to get a refill.

For another group of drugs, including Adderall, Ritalin, and oxycodone, the DEA proposal would institute tighter controls. Patients seeking those medications would need to see a doctor in person for an initial prescription.

David Herzberg, a historian of drugs at the University at Buffalo, said the DEA’s approach reflects a fundamental challenge in developing drug policy: meeting the needs of people who rely on a drug that can be abused without making that drug too readily available to others.

The DEA, he added, is “clearly seriously wrestling with this problem.”

Hospitals Return to Normal, Somewhat

During the pandemic, CMS has tried to limit problems that could arise if there weren’t enough health care workers to treat patients — especially before there were covid vaccines when workers were at greater risk of getting sick.

For example, CMS allowed hospitals to make broader use of nurse practitioners and physician assistants when caring for Medicare patients. And new physicians not yet credentialed to work at a particular hospital — for example, because governing bodies lacked time to conduct their reviews — could nonetheless practice there.

Other changes during the public health emergency were meant to shore up hospital capacity. Critical access hospitals, small hospitals located in rural areas, didn’t have to comply with federal rules for Medicare stating they were limited to 25 inpatient beds and patients’ stays could not exceed 96 hours, on average.

Once the emergency ends, those exceptions will disappear.

Hospitals are trying to persuade federal officials to maintain multiple covid-era policies beyond the emergency or work with Congress to change the law.

Surveillance of Infectious Diseases Splinters

The way state and local public health departments monitor the spread of disease will change after the emergency ends, because the Department of Health and Human Services won’t be able to require labs to report covid testing data.

Without a uniform, federal requirement, how states and counties track the spread of the coronavirus will vary. In addition, though hospitals will still provide covid data to the federal government, they may do so less frequently.

Public health departments are still getting their arms around the scope of the changes, said Janet Hamilton, executive director of the Council of State and Territorial Epidemiologists.

In some ways, the end of the emergency provides public health officials an opportunity to rethink covid surveillance. Compared with the pandemic’s early days, when at-home tests were unavailable and people relied heavily on labs to determine whether they were infected, testing data from labs now reveals less about how the virus is spreading.

Public health officials don’t think “getting all test results from all lab tests is potentially the right strategy anymore,” Hamilton said. Flu surveillance provides a potential alternative model: For influenza, public health departments seek test results from a sampling of labs.

“We’re still trying to work out what’s the best, consistent strategy. And I don’t think we have that yet,” Hamilton said.

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Surprise-Billing Law Loophole: When ‘Out of Network’ Doesn’t Quite Mean Out of Network

It was the first day of her family’s vacation in the San Juan Islands last June when Danielle Laskey, who was 26 weeks pregnant, thought she was leaking amniotic fluid.

A registered nurse, Laskey called her OB-GYN back home in Seattle, who said to seek immediate care. Staff members at a nearby emergency department found no leakage. But her OB-GYN still wanted to see her as soon as possible.

Laskey and her husband, Jacob, made the three-hour trip to the Swedish Maternal & Fetal Specialty Center-First Hill. Laskey had sought the clinic’s specialized care for this pregnancy, her second, after a dangerous complication with her first: The placenta had become embedded in the uterine muscles.

Back in Seattle, doctors at the clinic found Laskey’s water had broken early, posing a serious risk to her and the fetus, and ordered her immediate admission to Swedish Medical Center/First Hill. She delivered her son after seven weeks in the hospital. Though she was treated for multiple postpartum complications, she was well enough to be discharged the next day. Her son, who is healthy, went home a month later.

Laskey soon developed a fever and body aches, and she was told by her OB-GYN to go to Swedish’s emergency department. She said doctors there wanted to admit her when she arrived Aug. 20 and scheduled a procedure for Aug. 26 to remove a fragment of placenta that her body had not eliminated on its own.

Laskey, who had already spent weeks away from her 3-year-old daughter, chose to go home. She returned for the procedure, which went well, and she was home the same day.

Then the bills came.

The Patient: Danielle Laskey, 31, was covered by a state-sponsored plan offered by her employer, a local school district, and administered by Regence BlueShield.

Medical Service: In-patient hospital services for 51 days, plus a one-day stay that included a second placenta removal procedure.

Service Provider: Swedish Medical Center/First Hill, part of Providence Health & Services, a large, nonprofit, Catholic health system.

Total Bill: Swedish, through Regence, billed about $120,000 in cost sharing for Laskey’s initial hospitalization and about $15,000 for her second visit and procedure.

What Gives: The specialized clinic caring for Laskey before her hospital admission was in her insurance plan’s network. The clinic’s doctors admit patients only to Swedish Medical Center, one of the Seattle area’s only specialized providers for Laskey’s condition — which, given that connection, she assumed was also in the network.

So after being urgently admitted to Swedish, Laskey believed her bills would be largely covered, with the couple expected to pay $2,000 at most for their portion of in-network care because of her plan’s out-of-pocket cost limit.

It turned out Swedish was out of network for Laskey’s plan and, at first, Regence determined that Laskey’s hospitalizations were not emergencies. In November, a Regence case manager initially told Jacob that Laskey’s lengthy hospitalization was an emergency admission and out-of-network charges would not apply. But then she called back and said the charges would apply after all, because Laskey had not come in through the emergency department.

Both Washington state and federal laws prohibit insurers and providers from billing patients for out-of-network charges in emergency situations. The couple said neither Swedish nor Regence told them before or during the two hospitalizations that Swedish was out of network, and that they never knowingly signed anything agreeing to accept out-of-network charges.

Jacob, who works as a psychiatrist at a different hospital, said he mentioned the surprise-billing laws to the case manager, but she replied that the laws did not apply to his family’s situation.

It was only after Regence was contacted by KHN that the insurer explained its reasoning to the reporter: Regence said the Swedish hospital, while out of network for Danielle, had a broader contract with the insurer as a “participating provider” and so the insurer was not in violation of surprise-billing laws by approving Swedish’s out-of-network coinsurance charges.

The broader contract allowed Swedish to bill members of any Regence plan who receive out-of-network services there 50% coinsurance — the patient’s portion of the overall cost the insurer allows the provider to charge — with no out-of-pocket maximum for the patient.

What’s the difference between a hospital that’s “in network” and one that’s a “participating provider”? In this case, by contracting with Regence as an out-of-network but also participating provider, Swedish straddled the line between being in and out of network — designations that traditionally indicate whether a provider has a contract with an insurer or not.

Setting the terms with an insurer for providing its members emergency or other care appears to allow hospitals to sidestep new surprise-billing laws that prevent out-of-network providers from charging high, unpredictable rates in emergencies, according to government and private-sector medical billing experts.

Experts said they had not heard of out-of-network providers evading surprise-billing laws by being contracted as “participating providers” until KHN asked about Laskey’s case.

Ellen Montz, director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare & Medicaid Services, said that under the federal No Surprises Act the definition of a “participating” emergency facility that’s subject to the law’s surprise billing protections depends on whether the facility has a contract with the insurer specifying the terms and conditions under which an emergency service is provided to a plan member.

Matthew Fiedler, a senior fellow at the University of Southern California-Brookings Schaeffer Initiative for Health Policy who studies out-of-network billing, said Laskey’s case seems to fall into a “weird” gray area of the state and federal laws protecting patients from out-of-network charges in emergency situations.

If there had been no contract between Regence and Swedish, the laws clearly would have prohibited those charges. But since there was a contract specifying a 50% coinsurance rate when Swedish was out of network for a particular Regence plan, those laws legally may not apply, Fiedler said.

After he declined to apply for the hospital’s financial assistance program, Jacob said Swedish also notified the couple in November that they had two months to pay or be sent to collections.

Natalie Kozimor, a spokesperson for Providence Swedish, said the hospital disagreed with “some of the details and characterizations of events” presented by the Laskeys, though she did not specify what those were. She said Swedish assisted Danielle with her appeal to Regence.

“We had no luck with Swedish taking any role or responsibility with regard to our billing or advocating on our behalf,” Jacob said. “They basically just referred us to their financial department to put us on a payment plan.”

A photo shows a woman taking care of an infant baby lying on a padded floor mat.
Danielle Laskey at her home just outside Seattle, with her infant son.(Ryan Henriksen for KHN)

The Resolution: In December, the couple appealed Regence’s approval of Swedish’s out-of-network charges for the 51-day hospitalization, claiming it was an emergency and that there was no in-network hospital with the expertise to treat her condition. They also filed a complaint with the state insurance commissioner’s office.

The office told KHN that the “participating provider” contract does not override the laws barring out-of-network charges in emergency situations. “Danielle had an emergency and Regence acknowledges it was an emergency, so she cannot be balance-billed,” said Stephanie Marquis, public affairs director for the Washington state Office of the Insurance Commissioner.

On Jan. 13, Regence said it would grant the Laskeys’ appeal to cover the first hospitalization as an in-network service, erasing the biggest part of Swedish’s bill but still leaving the family on the hook for the $15,000 bill for Danielle’s second visit and procedure.

On Jan. 27, two days after KHN contacted Regence and Swedish about Danielle Laskey’s case, a Regence representative called and informed her that her second hospitalization also would be reclassified as an in-network service.

Ashley Bach, a Regence spokesperson, confirmed to KHN that both stays now will be covered as emergency, in-network services, eliminating Swedish’s coinsurance charges. But in what appears to be contrary to the insurance commissioner’s stance, he said the bills had not violated state or federal laws prohibiting out-of-network charges in emergency situations because of the contract with Swedish covering all its plans.

“Under the Washington state and federal balance-billing laws, the definitions of whether a provider is considered in network hinges on whether there is a contract with a specific provider,” Bach said.

The Takeaway: More than a year after the federal surprise-billing law took effect, patients can still get hammered by surprise bills resulting from health plans’ limited provider networks and ambiguities about what is considered emergency medical care. The loopholes are out there, and patients like Laskey are just discovering them.

Washington state Rep. Marcus Riccelli, chair of the House Health Care and Wellness Committee, said he will ask the state’s public and private insurers what steps they could take to avoid provider network gaps and out-of-network billing surprises like this. He said he will also review whether there is a loophole in state law that needs to be closed by the legislature.

Fiedler said policymakers need to consider addressing what looks like a major gap in the new laws protecting consumers from surprise bills, since it’s possible that other insurers across the country have similar contracts with hospitals. “Potentially this is a significant loophole, and it’s not what lawmakers were aiming for,” he said.

Congress might have to fix the problem, since the federal agencies that administer the No Surprises Act may not have authority to do anything about it, he added.

Bruce Alexander, a CMS spokesperson, said the Departments of Health & Human Services, Labor, and Treasury are looking into this issue. While the agencies can’t predict whether a new rule or guidance will be needed to address it, he said, “they remain committed to protecting consumers from surprise medical bills.”

In the meantime, patients, even in emergencies, should ask their doctors before a hospital admission whether the hospital is in their plan network, out of network, or (watch for these words) a “participating provider.”

As the Laskeys discovered, hospital billing departments may offer little help in resolving surprise billing. So, while it is worth contesting questionable charges to the provider, it’s also usually an option to quickly appeal to your state insurance department or commissioner.

Bill of the Month is a crowdsourced investigation by KHN and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!

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