Healthcare fraud is a pervasive issue, we all know this. We write about its effects every week here at Advize Health, and thousands of our compatriots have dedicated their professional lives to put a stop to the issue – much to no avail. Sadly, it seems that healthcare fraud is here to stay. This is largely due in part to the fact that we as an industry just can’t seem to figure out who exactly is to blame for the climbing fraud statistics and hemorrhaging of funds.

Not only can we not identify the culprit, we can’t even agree on who benefits from it. Earlier this year, Kaiser Health News released their analysis – reporting that those who profit most from steep medical bills are the ones responsible for fixing them. Advize Health has featured many Fraud Spotlight features that highlight the plethora of physicians profiting off of marked up bills and fraud schemes. Now, ProPublica is throwing their hat into the ring and pointing fingers at the investors behind TeamHealth, the nation’s largest staffing firm for emergency room doctors.

In the article, “How Rich Investors, Not Doctors, Profit From Marking Up ER Bills”, reporter Isaac Arnsdorf dives deep into a 2017 lawsuit between TeamHealth and a small Texas-based insurance company over a few million dollars of disputed bills. Chump change, right? Maybe at first glance. The suit has opened doors that allowed investigators to get an inside look at TeamHealth’s operations, and by extension, their owner – private-equity behemoth Blackstone. The firm, as it turns out, is under heavy scrutiny for drowning patients in surprise medical bills and cutting their doctors’ pay – even amid the COVID-19 pandemic.

As it turns out, TeamHealth has been ballooning Blackstone’s profits by marking up medical bills up to 7.7 times more than their actual cost at the expense of patients (and their integrity). The result for the period in question led to $248.4M in actual costs, $1.6B billed but not collected, and a cool $26.1M in profit. Some of TeamHealth’s physicians have said that they’re uncomfortable with the organization’s business practices. This is concerning on its own. Every physician should be uncomfortable with healthcare fraud, but instead, its met with dangerous passivity.

One ProPublica source said:

“As an emergency medicine physician, I have absolutely no idea to whom or how much is billed in my name. I have no idea what is collected in my name.”

Anonymous TeamHealth ER Physician

And while most ER doctors are not employees of the hospitals they work in, working instead for doctors’ practice groups, they should care about what is done in their name. This is made increasingly difficult, however, as many private investors are now buying out these practice groups to turn them into national staffing firms like…TeamHealth. Organizations like TeamHealth, backed by investors put profits above care – every time. So much so that they are obstinate on surprise billing legislation, wish to settle out-of-network bills through arbitration rather than local rates, sues insurers to get paid at higher rates.

Some TeamHealth location prices are higher than those of 95% of other providers, and 8-9x more than Medicare standard rates. These rates have little to no relationship to how the doctors are paid. Physicians whose names are attached to these inordinately steep bills receive none of the extra funds. Revisiting those high dollar amounts from earlier…that $26.1M profit went directly to TeamHealth’s “management fee”. This means out of the $1.6B that was billed but not collected, any dollar amount recovered by TeamHealth would be given to the corporate parent, aka Blackstone.

This paints a dismal picture of the state of healthcare fraud affairs. The information in this ProPublica piece is compelling, albeit a little misleading. The truth of the matter is that the real healthcare fraud profiteer is…anyone who lets it happen. Blackstone may be getting the fat paycheck, but ER doctors who knowingly allow their names to be attached to fraudulent practices are complicit. The claims adjusters, billers, and coders who mark up the bills for TeamHealth are complicit. This word has been thrown around a lot lately, but it is appropriate for healthcare fraud.

The problem is systemic. Those who profit from is are to blame for it. Those to blame for it profit from it. This doesn’t just apply to billion-dollar schemes. The small-time fraud schemes that earn doctors an extra $100,000 per year are as ethically problematic as those that cost Medicare millions. Investors are a problem, on the macro. Unscrupulous providers are problematic on the micro. Healthcare fraud is the sum of all its parts. This is something we could all benefit from remembering in our pursuit of proper billing, coding, and documenting.

Advize Health LLC is a healthcare advisory and consulting company that provides a breadth of healthcare industry services in the payer, provider, and legal communities. Contact Eric Rubenstein for more information on our Fraud Spotlight series.