Hospitals intentionally inflating COVID cases to collect financial incentives, whistleblower says

02/06/2022 / By Mary Villareal

A whistleblower who works for the United Healthcare of Louisiana’s Inpatient Utilization Management Department revealed that Wuhan coronavirus (COVID-19) cases were being inflated for financial incentives. The whistleblower, Jeanne Stagg, said that she witnessed cases coded as COVID despite the virus not being the “primary diagnosis” for the death of patient.

Stagg said that she tried to raise awareness to her leadership, as well as with the Fraud, Waste and Abuse Department, but she claimed that her concerns fell on deaf ears. She claimed they were not allowed to do medical necessity reviews, so hospitals are given free rein to admit anything they want and code the cases however they want.

In one instance, Stagg said, a person who went in due to multiple gunshot wounds was coded as COVID.

According to Dr. Julie Morial, chief medical officer of the United Healthcare of Louisiana, there are several financial incentives for hospitals to prefer to code patients with COVID-19 hospitalizations, saying that the Medicaid rate for reimbursement of COVID-19 patients is both higher and faster.

Recent actions by public officials have allowed this problem to persist. Stagg said she believes these erroneous codes could be the cause of COVID-19 spikes, which could also influence public health decisions.

The cause of death is primarily determined by the attending physician. In Pennsylvania, a coroner investigates suicides, criminal violence, accidental deaths and those that occur without a physician present. Death certificates, meanwhile, show when there are multiple contributing medical conditions.

While the Centers for Disease Control and Prevention does not dictate how the cause of death is determined, it does provide reporting guidance. Robert Anderson, who heads the Mortality Statistics Branch for the National Center for Health Statistics, said that the determination is solely the responsibility of the coroner or the physician. “They have to make a judgment, and with COVID-19 it’s a medical judgment,” he said.

COVID-19 can also be severe for patients with comorbidities and underlying health conditions like diabetes, pulmonary diseases, cardiovascular diseases and cancer. The death certificates for these COVID patients will also have to reflect these comorbidities. However, for categorizing without duplicating, certifiers such as physicians, coroners and medical examiners will have to assign the predominant cause of death.

In other words, the certifiers select the disease or condition that started the chain of events that lead to death. “When they die, they almost always die because of the virus, not the chronic condition,” said Anderson. (Related: Mayo Clinic: COVID shots will be necessary for at least 100 YEARS.)

Doctors push back against over-inflation accusations

American Medical Association President Susan Bailey pushed back on the accusations. “The suggestion that doctors – in the midst of a public health crisis – are overcounting COVID-19 patients or lying to line their pockets is a malicious, outrageous and completely misguided charge,” she said.

Officially, hospitals are supposed to be paid for COVID treatments the same way they are for any other care. Generally, the more serious the problem, the more hospitals are paid. Treating a ventilator patient, such as one with COVID or any other illness, would mean higher pay to a hospital, compared to treating one who does not require one.

Medicare, which is the government health program for the elderly and disabled, pays 20 percent more than its ordinary reimbursement for COVID patients as a result of the CARES Act, which was passed in the spring.

Rick Pollack, president and CEO of the American Hospital Association, also addressed the “myths” surrounding the add-on payments back in September. He said that while many hospitals are struggling financially, there are not inflating the number of cases, as there are disincentives in doing so, such as penalties or the hospital being kicked out of the Medicare program.