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I was deeply involved in hospice software, and specifically developing hospice revenue cycle solutions, about 15 years ago, and I can certainly confirm that the

I was deeply involved in hospice software, and specifically developing hospice revenue cycle solutions, about 15 years ago, and I can certainly confirm that the Medicare/Medicaid reimbursement formulas -- while in most areas arguably about as well-designed as you're going to get with such a program -- incentivize fraud because of the odd combination of up-front incentives and retrospective clawbacks. For well-run hospices, these aren't major issues (clawbacks aren't uncommon, but aren't financially controlling), but for hospice systems built to drain public cash out of dying patients, it's every bit as bad as the article says. (I did find that, using public Medicare hospice data, it was very easy to find providers that -- comparing my model to DOJ prosecutions -- were engaged in patient-stuffing and fraud by looking at their patient population data. Unsurprisingly, there was a significant correlation between questionable patient censuses and financial performance.) Generally, hospice is a hard case -- I'd never put a loved one (and I didn't) through one of the major providers, while smaller hospices have their own issues even if they're well-run, because Medicare/Medicaid reimbursement isn't really sufficient at the small scale (many are non-profit for this reason). I'd like to see more money directed towards hospice while restricting hospice size (such as putting caps on total patient census) to try and reduce the incentives for fraud and gaming the system, but to be honest I don't think there's a good way to fix the problems inherent in the model. (Also, the government should be a lot more aggressive, and licensing bodies more strict, on penalties against these companies. Yank the medical licenses from medical directors, slam some FTC decrees on named individuals, and put some execs in prison -- rather than, say, letting them go on to get elected to the Senate -- and the risks to medical fraud will start to outweigh the value for a lot of people.)

joshstrange 4y ago
> (Also, the government should be a lot more aggressive, and licensing bodies more strict, on penalties against these companies. Yank the medical licenses from medical directors, slam some FTC decrees on named individuals, and put some execs in prison -- rather than, say, letting them go on to get elected to the Senate -- and the risks to medical fraud will start to outweigh the value for a lot of people.) It's so incredibly depressing how the people at the "top" (the ones running the companies) always manage to skirt any consequences at all for their actions (and no, a fine that is a tiny % of the profit they made is not a consequence). I agree, we need to start sending CEO's and other C-level people to prison, pull their licenses, and not allow them to run companies in the future (or at least for a period of time) to disincentivize this disgusting behavior. And before I hear about how screwed up our prison system is: I know. We need major prison reform but keeping the rich/powerful out of prison does nothing to help that. In fact I'd argue it hurts it, the people who have means to fight against it never have to experience it themselves. Reform is needed but until then it'd sure be nice if we applied the law a little more evenly/equally. I'm not sure how some kid selling weed on a corner can end in prison but an exec that defrauds the government/public for millions/billions can walk away scot-free.
- HillRat 4y ago
  Interestingly, both HHS and IRS have law enforcement arms that are extremely effective and could be used more extensively in these cases, but they're overburdened dealing with things like opioid prescription crimes (which are worthy of prosecution, but could also be handled entirely within the DOJ). Folks I've known in those agencies are often frustrated by the fact that they're not spending their time going after complex white-collar frauds that they're specifically equipped to handle. Like you say, it's like Anatole France's old line about the "majestic equality of the law" forbidding rich and poor alike from sleeping under bridges.
  - SoftTalker 4y ago
    > Folks I've known in those agencies are often frustrated by the fact that they're not spending their time going after complex white-collar frauds that they're specifically equipped to handle. Well, that would expose people who don't want to be exposed, and who conveniently (for themselves) also control the funding of these agencies.
  - halpmeh 4y ago
    How would the IRS do anything? I'm sure these businesses are paying their taxes on the ill-gotten proceeds.
  - treeman79 4y ago
    Opioid crimes are weird. I’ve known several people who have self destructed on them. I’ve also got horrific nerve pain that left me for years wishing for death. Doctors constantly refused to give me anything other then occasional 30 day supplies. Yet at same time they refused to discuss alternative treatments. Even when I would bring them articles and papers and support forums. Finally I turned to sketchy website to get a fairly common drug LDN. That solved my pain problems which also makes it so that i can’t take opioids. I still haven’t found an in person doctor that will prescribe it.
    - LocalH 4y ago
      Pain management is weird, especially in the US, in that they'd rather let untold numbers of people suffer in pain just to attempt to prevent someone else from using the same substances without being in pain. Imagine if crime was handled this way. "Well, we understand that you might not be guilty, but what message would letting you go send to those who are guilty?"
bombcar 4y ago
There is an eternal cycle in these things - large corrupt institutions get shit down by the government, new “better” ones start up, one or more horror stories happens, and new regulations are added to “prevent it” and very soon only the large corrupt organization are able to keep up with the paper work.
treeman79 4y ago
Was involved in medical billing software. Any individual bill is generally fine on its own. Actual fraud was taken seriously. But the system is absolutely designed to milk the government for every dollar possible. Basically, how much can we bill for without it crossing the line into fraud. Perhaps much worse. Is there is zero incentive to reduce cost for treating people.
- HillRat 4y ago
  Ironically, one of the more effective ways to reduce billing waste was when health systems (or their PE owners) decided to slash costs by laying off their coders (for everyone else who didn't live revenue cycle, a "coder" in this case is someone trained to translate medical procedures to billable CPT codes) and having nurses do billing. Suddenly there was zero incentive to optimize for reimbursement, since nurses are understandably nervous about getting sent up for inadvertent Medicare fraud.
moneywoes 4y ago
Any ideas for finding some of these names? Is there room for innovation in the market
rdmirza 4y ago
I'm intrigued about your research and would love to hear more. I'm a physician interested the effect of for-profit care on health care and outcomes. As an example, we showed that for-profit dialysis facilities in the US have about a 7% higher mortality rate. We did a meta-analysis and every study barring one found higher mortality in for-profit dialysis facilities. Other studies suggest one reason is lower referral rates for kidney transplantation. Higher mortality has also been shown in for profit hospitals.
- HillRat 4y ago
  It was a long time ago, so I'm operating off questionable memory here, but IIRC the major tell was looking at patient longevity (questionable hospices had longer patient tenure, presumably because of more aggressive recruitment of non-EOL pts) and distribution of inpatient care days (which have the highest reimbursement rate, so questionable hospices tended to max out inpatient days). There was definitely a correlation between size of hospice and those variables, and hospices involved in DOJ/HHS prosecutions were correlated with longer pt tenure and high utilization of inpatient care. Your work sounds interesting and enlightening -- I'm not familiar with dialysis facilities clinically or from a business PoV, but I'm curious if they suffer from some of the same incentives issues as hospices, given the significant Medicare/Medicaid spend in that area, and the number of ESRD policy carve-outs.

joshstrange 4y ago

> (Also, the government should be a lot more aggressive, and licensing bodies more strict, on penalties against these companies. Yank the medical licenses from medical directors, slam some FTC decrees on named individuals, and put some execs in prison -- rather than, say, letting them go on to get elected to the Senate -- and the risks to medical fraud will start to outweigh the value for a lot of people.) It's so incredibly depressing how the people at the "top" (the ones running the companies) always manage to skirt any consequences at all for their actions (and no, a fine that is a tiny % of the profit they made is not a consequence). I agree, we need to start sending CEO's and other C-level people to prison, pull their licenses, and not allow them to run companies in the future (or at least for a period of time) to disincentivize this disgusting behavior. And before I hear about how screwed up our prison system is: I know. We need major prison reform but keeping the rich/powerful out of prison does nothing to help that. In fact I'd argue it hurts it, the people who have means to fight against it never have to experience it themselves. Reform is needed but until then it'd sure be nice if we applied the law a little more evenly/equally. I'm not sure how some kid selling weed on a corner can end in prison but an exec that defrauds the government/public for millions/billions can walk away scot-free.

HillRat 4y ago
Interestingly, both HHS and IRS have law enforcement arms that are extremely effective and could be used more extensively in these cases, but they're overburdened dealing with things like opioid prescription crimes (which are worthy of prosecution, but could also be handled entirely within the DOJ). Folks I've known in those agencies are often frustrated by the fact that they're not spending their time going after complex white-collar frauds that they're specifically equipped to handle. Like you say, it's like Anatole France's old line about the "majestic equality of the law" forbidding rich and poor alike from sleeping under bridges.
- SoftTalker 4y ago
  > Folks I've known in those agencies are often frustrated by the fact that they're not spending their time going after complex white-collar frauds that they're specifically equipped to handle. Well, that would expose people who don't want to be exposed, and who conveniently (for themselves) also control the funding of these agencies.
- halpmeh 4y ago
  How would the IRS do anything? I'm sure these businesses are paying their taxes on the ill-gotten proceeds.
- treeman79 4y ago
  Opioid crimes are weird. I’ve known several people who have self destructed on them. I’ve also got horrific nerve pain that left me for years wishing for death. Doctors constantly refused to give me anything other then occasional 30 day supplies. Yet at same time they refused to discuss alternative treatments. Even when I would bring them articles and papers and support forums. Finally I turned to sketchy website to get a fairly common drug LDN. That solved my pain problems which also makes it so that i can’t take opioids. I still haven’t found an in person doctor that will prescribe it.
  - LocalH 4y ago
    Pain management is weird, especially in the US, in that they'd rather let untold numbers of people suffer in pain just to attempt to prevent someone else from using the same substances without being in pain. Imagine if crime was handled this way. "Well, we understand that you might not be guilty, but what message would letting you go send to those who are guilty?"

bombcar 4y ago

There is an eternal cycle in these things - large corrupt institutions get shit down by the government, new “better” ones start up, one or more horror stories happens, and new regulations are added to “prevent it” and very soon only the large corrupt organization are able to keep up with the paper work.

treeman79 4y ago

Was involved in medical billing software. Any individual bill is generally fine on its own. Actual fraud was taken seriously. But the system is absolutely designed to milk the government for every dollar possible. Basically, how much can we bill for without it crossing the line into fraud. Perhaps much worse. Is there is zero incentive to reduce cost for treating people.

HillRat 4y ago
Ironically, one of the more effective ways to reduce billing waste was when health systems (or their PE owners) decided to slash costs by laying off their coders (for everyone else who didn't live revenue cycle, a "coder" in this case is someone trained to translate medical procedures to billable CPT codes) and having nurses do billing. Suddenly there was zero incentive to optimize for reimbursement, since nurses are understandably nervous about getting sent up for inadvertent Medicare fraud.

moneywoes 4y ago

Any ideas for finding some of these names? Is there room for innovation in the market

rdmirza 4y ago

I'm intrigued about your research and would love to hear more. I'm a physician interested the effect of for-profit care on health care and outcomes. As an example, we showed that for-profit dialysis facilities in the US have about a 7% higher mortality rate. We did a meta-analysis and every study barring one found higher mortality in for-profit dialysis facilities. Other studies suggest one reason is lower referral rates for kidney transplantation. Higher mortality has also been shown in for profit hospitals.

HillRat 4y ago
It was a long time ago, so I'm operating off questionable memory here, but IIRC the major tell was looking at patient longevity (questionable hospices had longer patient tenure, presumably because of more aggressive recruitment of non-EOL pts) and distribution of inpatient care days (which have the highest reimbursement rate, so questionable hospices tended to max out inpatient days). There was definitely a correlation between size of hospice and those variables, and hospices involved in DOJ/HHS prosecutions were correlated with longer pt tenure and high utilization of inpatient care. Your work sounds interesting and enlightening -- I'm not familiar with dialysis facilities clinically or from a business PoV, but I'm curious if they suffer from some of the same incentives issues as hospices, given the significant Medicare/Medicaid spend in that area, and the number of ESRD policy carve-outs.