A labor union is accusing America’s biggest hospital chain of Medicare fraud—and stoking a debate over for-profit medicine and soaring health care costs
As another crippling COVID wave sweeps the country, one of the nation’s largest unions has taken aim at America’s largest hospital operator, HCA Healthcare, for practices that “maximize profits at the expense of patient care, working conditions, and responsible corporate behavior”—including “apparent Medicare fraud,” the union says. The basis for that last, most explosive claim: HCA’s unusually high emergency room admission rates.
The allegations, leveled in a 45-page investigative report published Monday by Service Employees International Union (SEIU), are based on the organization’s analysis of Medicare data and lawsuits filed by whistleblowers and health professionals against HCA. That analysis found the company has had an average emergency department admission rate that exceeded the national average by more than 5% between 2014 and 2019 (the most recent data available). In some states, including Texas and California, HCA’s average ER admission rate is 10% higher than the state average. Inpatient admissions receive higher Medicare reimbursement rates, and so the pattern raises concerns, says SEIU, that those higher admission volumes are driven by “corporate efforts to boost their profits” and “without respect to medical need.”
In a statement to Fortune, HCA rejected SEIU’s conclusions.
SEIU’s accusations come at a time when American households continue to struggle with the world’s highest medical costs—with bills for unexpected hospital stays among the biggest pain points—and when unnecessary hospitalizations present a particular health danger. They also echo past allegations of wrongdoing by hospitals.
Similar trends were observed at for-profit hospital operators Community Health Systems (CHS) and Health Management Associates (HMA) before drawing scrutiny and government investigations during the past decade. A 2012 investigation by 60 Minutes revealed that HMA (since acquired by CHS) gave its physicians admission targets to hit, for example. Both companies settled false claims charges with the government over those allegations of improper Medicare billing; neither company admitted wrongdoing. (HCA also has a history of settlements with the Department of Justice over alleged fraud.)
While a 5%-higher-than-average admission rate may seem trivial, SEIU contends it enabled HCA to bring in “over $1 billion in excess Medicare payments” in five years. Given HCA’s presence in 20 states, and the consistency of the trend—state by state, the SEIU found HCA’s average admission rate exceeded the state average in all but one—the report’s authors argue the patterns can’t be coincidental.
