Indiana Whistleblower Medicaid Suit and Private Equity Ties
Article
research, healthcare
Published: 10/10/2024
Read Time: 3 min
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When it comes to Private Equity (PE), I sometimes feel like the proverbial hammer where I see a private equity nail in every negative story about the healthcare system.
This story is about a whistleblower suit that "claims that several insurance companies and hospital systems defrauded Indiana's Medicaid program by improperly billing them for patient care and walked away with more than $700 million."
Being a PE hammer, I looked for a PE nail. PE wasn't mentioned in the story. I decided to look into Ascension Healthcare which was named in the suit. When I read the following, I thought I was wrong. No PE story here:
"Ascension is a large private US healthcare system with 142,000 employees, 142 hospitals, and 40 senior living facilities operating in 19 states and is the largest [US] nonprofit and largest Catholic health system."
A Catholic health system couldn't be further from the ethos of Private Equity right? No PE nail here. I was wrong.... Or was I?
I only needed to dig a little further to find my Private Equity nail:
"[Ascension] also operates a conglomerate of for-profit firms, including subsidiaries involved in private equity, venture capital, insurance, medical software, and pharmacy delivery.
Ascension has faced a number of investigations and controversies. A 2022 New York Times investigation found Ascension hospitals instigated a staffing crisis because of profiteering, leading nurses and doctors to file hundreds of complaints about possible preventable deaths." source: Wikipedia
When Private Equity has penetrated a large, Catholic non-profit hospital network there is good reason to have grave concern for our healthcare system.
Key takeaways:
"According to the lawsuit, ...state Medicaid officials told him and his team to "significantly curtail its efforts" to use information from the contractor to "recoup improper Medicaid overpayments.""
"The lawsuit accuses those Medicaid officials of "bowing to political pressure exerted by the health insurers' and the hospitals' lobby.""
"All this comes about a year after the state announced a nearly $1 billion projected Medicaid budget shortfall."
"The state blamed how families of medically complex children got reimbursed for care as part of the reason for that budget deficit."
"We've been told it's on all of us to make sure we are playing by the rules when it comes to Medicaid and it's a little bit hard to swallow as a parent when it feels like allegedly families, we're being held to a different amount of accountability and responsibility then ... these large insurance companies and hospital systems are," said Jennifer Dewitt with Indiana Families United for Care."