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Largest US Independent Primary Care Network Accused of Medicare Fraud
A Maryland firm that oversees the nation’s largest independent network of primary care medical practices is facing a whistleblower lawsuit alleging it cheated Medicare out of millions of dollars using billing software “rigged” to make patients appear sicker than they were.
“Aledade did whatever it took to make patients appear sicker than they were,” according to the suit.
For example, the suit alleges that Aledade “conflated” anxiety into depression, which could boost payments by $3300 a year per patient. And Aledade decided that patients over 65 years old who said they had more than one drink per day had substance use issues, which could bring in $3680 extra per patient, the suit says.
The whistleblower case was filed by Khushwinder Singh in federal court in Seattle in 2021 but remained under seal until January of this year. Singh, a “senior medical director of risk and wellness product” at Aledade from January 2021 through May 2021, alleges the company fired him after he objected to its “fraudulent course of conduct,” according to the suit. He declined to comment on the suit.
The case is pending, and Aledade has yet to file a legal response in court. Julie Bataille, Aledade’s senior vice president for communications, denied the allegations, saying in an interview that “the whole case is totally baseless and meritless.”
Based in Bethesda, Maryland, Aledade helps manage independent primary care clinics and medical offices in more than 40 states, serving some 2 million people.
Aledade is one of hundreds of groups known as accountable care organizations. ACOs enjoy strong support from federal health officials who hope they can keep people healthier and achieve measurable cost savings.
Aledade was co-founded in 2014 by Farzad Mostashari, a former health information technology chief in the Obama administration, and has welcomed other ex-government health figures into its ranks. In June 2023, President Joe Biden appointed Mandy Cohen, then executive vice president at Aledade, to head the Centers for Disease Control and Prevention in Atlanta.
Aledade has grown rapidly behind hundreds of millions of dollars in venture capital financing and was valued at $3.5 billion in 2023.
Mostashari, Aledade’s chief executive officer, declined to be interviewed on the record.
“As this is an active legal matter, we will not respond to individual allegations in the complaint,” Aledade said in a statement to KFF Health News. “We remain focused on our top priority of delivering high-quality, value-based care with our physician partners and will defend ourselves vigorously if needed in a court of law.”
The lawsuit also names as defendants 19 independent physician practices, many in small cities in Delaware, Kansas, Louisiana, North Carolina, Pennsylvania, and West Virginia. According to the suit, the doctors knowingly used Aledade software to trigger illegal billings, a practice known in the medical industry as “upcoding.” None has filed an answer in court.
More than two dozen whistleblower lawsuits, some dating back more than a decade, have accused Medicare health plans of overcharging the government by billing for medical conditions not supported by patient medical records. These cases have resulted in hundreds of millions of dollars in penalties. In September 2023, Cigna agreed to pay $37 million to settle one such case, for instance.
But the whistleblower suit filed against Aledade appears to be the first to allege upcoding within accountable care organizations, which describe part of their mission as foiling wasteful spending. ACOs including Aledade made headlines recently for helping to expose an alleged massive Medicare fraud involving urinary catheters, for instance.
Finding the ‘Gravy’
Singh’s suit targets Aledade’s use of coding software and guidance to medical practices that joined its network. Some doctors treated patients on standard Medicare through the ACO networks, while others cared for seniors enrolled in Medicare Advantage plans, according to the suit.
Medicare Advantage is a privately run alternative to standard Medicare that has surged in popularity and now cares for more than 30 million people. Aledade has sought to expand its services to Medicare Advantage enrollees.
The lawsuit alleges Aledade encouraged doctors to tack on suspect medical diagnoses that paid extra money. Aledade called it finding “the gravy sitting in the [patient’s] chart,” according to the suit.
The company “instructed” providers to diagnose diabetes with complications, “even if the patient’s diabetes was under control or the complicating factor no longer existed,” according to the suit.
Some medical practices in Delaware, North Carolina, and West Virginia billed the inflated code for more than 90% of their Medicare Advantage patients with diabetes, according to the suit.
The lawsuit also alleges that Aledade “rigged” the software to change a diagnosis of overweight to “morbid obesity,” which could pay about $2500 more per patient. Some providers coded morbid obesity for patients on traditional Medicare at 10 times the national average, according to the suit.
“This fraudulent coding guidance was known as ‘Aledade gospel,’ ” according to the suit, and following it “paid dividends in the form of millions of dollars in increased revenue.”
These tactics “usurped” the clinical judgment of doctors, according to the suit.
‘No Diagnosis Left Behind’
In its statement to KFF Health News, Aledade said its software offers doctors a range of data and guidance that helps them evaluate and treat patients.
“Aledade’s independent physicians remain solely responsible for all medical decision-making for their patients,” the statement read.
The company said it will “continue to advocate for changes to improve Medicare’s risk adjustment process to promote accuracy while also reducing unnecessary administrative burdens.”
In a message to employees and partner practices sent on Feb. 29, Mostashari noted that the Justice Department had declined to take over the False Claims Act case.
“We recently learned that the federal government has declined to join the case U.S. ex rel. Khushwinder Singh v. Aledade, Inc., et al. That’s good news, and a decision we wholeheartedly applaud given the baseless allegations about improper coding practices and wrongful termination brought by a former Aledade employee 3 years ago. We do not yet know how the full legal situation will play out but will defend ourselves vigorously if needed in a court of law,” the statement said.
The Justice Department advised the Seattle court on Jan. 9 that it would not intervene in the case “at this time,” which prompted an order to unseal it, court records show. Under the false claims law, whistleblowers can proceed with the case on their own. The Justice Department does not state a reason for declining a case but has said in other court cases that doing so has no bearing on its merits.
Singh argues in his complaint that many “unsupported” diagnosis codes were added during annual “wellness visits” and that they did not result in the patients receiving any additional medical care.
Aledade maintained Slack channels in which doctors could discuss the financial incentives for adding higher-paying diagnostic codes, according to the suit.
The company also closely monitored how doctors coded as part of an initiative dubbed “no diagnosis left behind,” according to the suit.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism.
A Maryland firm that oversees the nation’s largest independent network of primary care medical practices is facing a whistleblower lawsuit alleging it cheated Medicare out of millions of dollars using billing software “rigged” to make patients appear sicker than they were.
“Aledade did whatever it took to make patients appear sicker than they were,” according to the suit.
For example, the suit alleges that Aledade “conflated” anxiety into depression, which could boost payments by $3300 a year per patient. And Aledade decided that patients over 65 years old who said they had more than one drink per day had substance use issues, which could bring in $3680 extra per patient, the suit says.
The whistleblower case was filed by Khushwinder Singh in federal court in Seattle in 2021 but remained under seal until January of this year. Singh, a “senior medical director of risk and wellness product” at Aledade from January 2021 through May 2021, alleges the company fired him after he objected to its “fraudulent course of conduct,” according to the suit. He declined to comment on the suit.
The case is pending, and Aledade has yet to file a legal response in court. Julie Bataille, Aledade’s senior vice president for communications, denied the allegations, saying in an interview that “the whole case is totally baseless and meritless.”
Based in Bethesda, Maryland, Aledade helps manage independent primary care clinics and medical offices in more than 40 states, serving some 2 million people.
Aledade is one of hundreds of groups known as accountable care organizations. ACOs enjoy strong support from federal health officials who hope they can keep people healthier and achieve measurable cost savings.
Aledade was co-founded in 2014 by Farzad Mostashari, a former health information technology chief in the Obama administration, and has welcomed other ex-government health figures into its ranks. In June 2023, President Joe Biden appointed Mandy Cohen, then executive vice president at Aledade, to head the Centers for Disease Control and Prevention in Atlanta.
Aledade has grown rapidly behind hundreds of millions of dollars in venture capital financing and was valued at $3.5 billion in 2023.
Mostashari, Aledade’s chief executive officer, declined to be interviewed on the record.
“As this is an active legal matter, we will not respond to individual allegations in the complaint,” Aledade said in a statement to KFF Health News. “We remain focused on our top priority of delivering high-quality, value-based care with our physician partners and will defend ourselves vigorously if needed in a court of law.”
The lawsuit also names as defendants 19 independent physician practices, many in small cities in Delaware, Kansas, Louisiana, North Carolina, Pennsylvania, and West Virginia. According to the suit, the doctors knowingly used Aledade software to trigger illegal billings, a practice known in the medical industry as “upcoding.” None has filed an answer in court.
More than two dozen whistleblower lawsuits, some dating back more than a decade, have accused Medicare health plans of overcharging the government by billing for medical conditions not supported by patient medical records. These cases have resulted in hundreds of millions of dollars in penalties. In September 2023, Cigna agreed to pay $37 million to settle one such case, for instance.
But the whistleblower suit filed against Aledade appears to be the first to allege upcoding within accountable care organizations, which describe part of their mission as foiling wasteful spending. ACOs including Aledade made headlines recently for helping to expose an alleged massive Medicare fraud involving urinary catheters, for instance.
Finding the ‘Gravy’
Singh’s suit targets Aledade’s use of coding software and guidance to medical practices that joined its network. Some doctors treated patients on standard Medicare through the ACO networks, while others cared for seniors enrolled in Medicare Advantage plans, according to the suit.
Medicare Advantage is a privately run alternative to standard Medicare that has surged in popularity and now cares for more than 30 million people. Aledade has sought to expand its services to Medicare Advantage enrollees.
The lawsuit alleges Aledade encouraged doctors to tack on suspect medical diagnoses that paid extra money. Aledade called it finding “the gravy sitting in the [patient’s] chart,” according to the suit.
The company “instructed” providers to diagnose diabetes with complications, “even if the patient’s diabetes was under control or the complicating factor no longer existed,” according to the suit.
Some medical practices in Delaware, North Carolina, and West Virginia billed the inflated code for more than 90% of their Medicare Advantage patients with diabetes, according to the suit.
The lawsuit also alleges that Aledade “rigged” the software to change a diagnosis of overweight to “morbid obesity,” which could pay about $2500 more per patient. Some providers coded morbid obesity for patients on traditional Medicare at 10 times the national average, according to the suit.
“This fraudulent coding guidance was known as ‘Aledade gospel,’ ” according to the suit, and following it “paid dividends in the form of millions of dollars in increased revenue.”
These tactics “usurped” the clinical judgment of doctors, according to the suit.
‘No Diagnosis Left Behind’
In its statement to KFF Health News, Aledade said its software offers doctors a range of data and guidance that helps them evaluate and treat patients.
“Aledade’s independent physicians remain solely responsible for all medical decision-making for their patients,” the statement read.
The company said it will “continue to advocate for changes to improve Medicare’s risk adjustment process to promote accuracy while also reducing unnecessary administrative burdens.”
In a message to employees and partner practices sent on Feb. 29, Mostashari noted that the Justice Department had declined to take over the False Claims Act case.
“We recently learned that the federal government has declined to join the case U.S. ex rel. Khushwinder Singh v. Aledade, Inc., et al. That’s good news, and a decision we wholeheartedly applaud given the baseless allegations about improper coding practices and wrongful termination brought by a former Aledade employee 3 years ago. We do not yet know how the full legal situation will play out but will defend ourselves vigorously if needed in a court of law,” the statement said.
The Justice Department advised the Seattle court on Jan. 9 that it would not intervene in the case “at this time,” which prompted an order to unseal it, court records show. Under the false claims law, whistleblowers can proceed with the case on their own. The Justice Department does not state a reason for declining a case but has said in other court cases that doing so has no bearing on its merits.
Singh argues in his complaint that many “unsupported” diagnosis codes were added during annual “wellness visits” and that they did not result in the patients receiving any additional medical care.
Aledade maintained Slack channels in which doctors could discuss the financial incentives for adding higher-paying diagnostic codes, according to the suit.
The company also closely monitored how doctors coded as part of an initiative dubbed “no diagnosis left behind,” according to the suit.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism.
A Maryland firm that oversees the nation’s largest independent network of primary care medical practices is facing a whistleblower lawsuit alleging it cheated Medicare out of millions of dollars using billing software “rigged” to make patients appear sicker than they were.
“Aledade did whatever it took to make patients appear sicker than they were,” according to the suit.
For example, the suit alleges that Aledade “conflated” anxiety into depression, which could boost payments by $3300 a year per patient. And Aledade decided that patients over 65 years old who said they had more than one drink per day had substance use issues, which could bring in $3680 extra per patient, the suit says.
The whistleblower case was filed by Khushwinder Singh in federal court in Seattle in 2021 but remained under seal until January of this year. Singh, a “senior medical director of risk and wellness product” at Aledade from January 2021 through May 2021, alleges the company fired him after he objected to its “fraudulent course of conduct,” according to the suit. He declined to comment on the suit.
The case is pending, and Aledade has yet to file a legal response in court. Julie Bataille, Aledade’s senior vice president for communications, denied the allegations, saying in an interview that “the whole case is totally baseless and meritless.”
Based in Bethesda, Maryland, Aledade helps manage independent primary care clinics and medical offices in more than 40 states, serving some 2 million people.
Aledade is one of hundreds of groups known as accountable care organizations. ACOs enjoy strong support from federal health officials who hope they can keep people healthier and achieve measurable cost savings.
Aledade was co-founded in 2014 by Farzad Mostashari, a former health information technology chief in the Obama administration, and has welcomed other ex-government health figures into its ranks. In June 2023, President Joe Biden appointed Mandy Cohen, then executive vice president at Aledade, to head the Centers for Disease Control and Prevention in Atlanta.
Aledade has grown rapidly behind hundreds of millions of dollars in venture capital financing and was valued at $3.5 billion in 2023.
Mostashari, Aledade’s chief executive officer, declined to be interviewed on the record.
“As this is an active legal matter, we will not respond to individual allegations in the complaint,” Aledade said in a statement to KFF Health News. “We remain focused on our top priority of delivering high-quality, value-based care with our physician partners and will defend ourselves vigorously if needed in a court of law.”
The lawsuit also names as defendants 19 independent physician practices, many in small cities in Delaware, Kansas, Louisiana, North Carolina, Pennsylvania, and West Virginia. According to the suit, the doctors knowingly used Aledade software to trigger illegal billings, a practice known in the medical industry as “upcoding.” None has filed an answer in court.
More than two dozen whistleblower lawsuits, some dating back more than a decade, have accused Medicare health plans of overcharging the government by billing for medical conditions not supported by patient medical records. These cases have resulted in hundreds of millions of dollars in penalties. In September 2023, Cigna agreed to pay $37 million to settle one such case, for instance.
But the whistleblower suit filed against Aledade appears to be the first to allege upcoding within accountable care organizations, which describe part of their mission as foiling wasteful spending. ACOs including Aledade made headlines recently for helping to expose an alleged massive Medicare fraud involving urinary catheters, for instance.
Finding the ‘Gravy’
Singh’s suit targets Aledade’s use of coding software and guidance to medical practices that joined its network. Some doctors treated patients on standard Medicare through the ACO networks, while others cared for seniors enrolled in Medicare Advantage plans, according to the suit.
Medicare Advantage is a privately run alternative to standard Medicare that has surged in popularity and now cares for more than 30 million people. Aledade has sought to expand its services to Medicare Advantage enrollees.
The lawsuit alleges Aledade encouraged doctors to tack on suspect medical diagnoses that paid extra money. Aledade called it finding “the gravy sitting in the [patient’s] chart,” according to the suit.
The company “instructed” providers to diagnose diabetes with complications, “even if the patient’s diabetes was under control or the complicating factor no longer existed,” according to the suit.
Some medical practices in Delaware, North Carolina, and West Virginia billed the inflated code for more than 90% of their Medicare Advantage patients with diabetes, according to the suit.
The lawsuit also alleges that Aledade “rigged” the software to change a diagnosis of overweight to “morbid obesity,” which could pay about $2500 more per patient. Some providers coded morbid obesity for patients on traditional Medicare at 10 times the national average, according to the suit.
“This fraudulent coding guidance was known as ‘Aledade gospel,’ ” according to the suit, and following it “paid dividends in the form of millions of dollars in increased revenue.”
These tactics “usurped” the clinical judgment of doctors, according to the suit.
‘No Diagnosis Left Behind’
In its statement to KFF Health News, Aledade said its software offers doctors a range of data and guidance that helps them evaluate and treat patients.
“Aledade’s independent physicians remain solely responsible for all medical decision-making for their patients,” the statement read.
The company said it will “continue to advocate for changes to improve Medicare’s risk adjustment process to promote accuracy while also reducing unnecessary administrative burdens.”
In a message to employees and partner practices sent on Feb. 29, Mostashari noted that the Justice Department had declined to take over the False Claims Act case.
“We recently learned that the federal government has declined to join the case U.S. ex rel. Khushwinder Singh v. Aledade, Inc., et al. That’s good news, and a decision we wholeheartedly applaud given the baseless allegations about improper coding practices and wrongful termination brought by a former Aledade employee 3 years ago. We do not yet know how the full legal situation will play out but will defend ourselves vigorously if needed in a court of law,” the statement said.
The Justice Department advised the Seattle court on Jan. 9 that it would not intervene in the case “at this time,” which prompted an order to unseal it, court records show. Under the false claims law, whistleblowers can proceed with the case on their own. The Justice Department does not state a reason for declining a case but has said in other court cases that doing so has no bearing on its merits.
Singh argues in his complaint that many “unsupported” diagnosis codes were added during annual “wellness visits” and that they did not result in the patients receiving any additional medical care.
Aledade maintained Slack channels in which doctors could discuss the financial incentives for adding higher-paying diagnostic codes, according to the suit.
The company also closely monitored how doctors coded as part of an initiative dubbed “no diagnosis left behind,” according to the suit.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism.
Lose weight, gain huge debt: N.Y. provider has sued more than 300 patients who had bariatric surgery
Seven months after Lahavah Wallace’s weight-loss operation, a New York bariatric surgery practice sued her, accusing her of “intentionally” failing to pay nearly $18,000 of her bill.
Long Island Minimally Invasive Surgery, which does business as the New York Bariatric Group, went on to accuse Ms. Wallace of “embezzlement,” alleging she kept insurance payments that should have been turned over to the practice.
Ms. Wallace denies the allegations, which the bariatric practice has leveled against patients in hundreds of debt-collection lawsuits filed over the past 4 years, court records in New York state show.
In about 60 cases, the lawsuits demanded $100,000 or more from patients. Some patients were found liable for tens of thousands of dollars in interest charges or wound up shackled with debt that could take a decade or more to shake. Others are facing the likely prospect of six-figure financial penalties, court records show.
Backed by a major private equity firm, the bariatric practice spends millions each year on advertisements featuring patients who have dropped 100 pounds or more after bariatric procedures, sometimes having had a portion of their stomachs removed. The ads have run on TV, online, and on New York City subway posters.
The online ads, often showcasing the slogan “Stop obesity for life,” appealed to Ms. Wallace, who lives in Brooklyn and works as a legal assistant for the state of New York. She said she turned over checks from her insurer to the bariatric group and was stunned when the medical practice hauled her into court citing an “out-of-network payment agreement” she had signed before her surgery.
“I really didn’t know what I was signing,” Ms. Wallace told KFF Health News. “I didn’t pay enough attention.”
Shawn Garber, MD, a bariatric surgeon who founded the practice in 2000 on Long Island and serves as its CEO, said that “prior to rendering services” his office staff advises patients of the costs and their responsibility to pay the bill.
The bariatric group has cited these out-of-network payment agreements in at least 300 lawsuits filed against patients from January 2019 to 2022 demanding nearly $19 million to cover medical bills, interest charges, and attorney’s fees, a KFF Health News review of New York state court records found.
Danny De Voe, a partner at Sahn Ward Braff Koblenz law firm in Uniondale, N.Y., who filed many of those suits, declined to comment, citing attorney-client privilege.
In most cases, the medical practice had agreed to accept an insurance company’s out-of-network rate as full payment for its services – with caveats, according to court filings.
In the agreements they signed, patients promised to pay any coinsurance, meeting any deductible, and pass on to the medical practice any reimbursement checks they received from their health plans within 7 days.
KFF Health News found – while legal fees and other costs can layer on thousands more.
Elisabeth Benjamin, a lawyer with the Community Service Society of New York, said conflicts can arise when insurers send checks to pay for out-of-network medical services to patients rather than reimbursing a medical provider directly.
“We would prefer to see regulators step in and stop that practice,” she said, adding it “causes tension between providers and patients.”
That’s certainly true for Ms. Wallace. The surgery practice sued her in August 2022demanding $17,981 in fees it said remained unpaid after her January 2022 laparoscopic sleeve gastrectomy, an operation in which much of the stomach is removed to assist weight loss.
The lawsuit also tacked on a demand for $5,993 in attorney’s fees, court records show.
The suit alleges Ms. Wallace signed the contract even though she “had no intention” of paying her bills. The complaint goes on to accuse her of “committing embezzlement” by “willfully, intentionally, deliberately and maliciously” depositing checks from her health plan into her personal account.
The suit doesn’t include details to substantiate these claims, and Ms. Wallace said in her court response they are not true. Ms. Wallace said she turned over checks for the charges.
“They billed the insurance for everything they possibly could,” Ms. Wallace said.
In September, Ms. Wallace filed for bankruptcy, hoping to discharge the bariatric care debt along with about $4,700 in unrelated credit card charges.
The medical practice fired back in November by filing an “adversary complaint” in her Brooklyn bankruptcy court proceeding that argues her medical debt should not be forgiven because Ms. Wallace committed fraud.
The adversary complaint, which is pending in the bankruptcy case, accuses Ms. Wallace of “fraudulently” inducing the surgery center to perform “elective medical procedures” without requiring payment up front.
Both the harsh wording and claims of wrongdoing have infuriated Ms. Wallace and her attorney, Jacob Silver, of Brooklyn.
Mr. Silver wants the medical practice to turn over records of the payments received from Ms. Wallace. “There is no fraud here,” he said. “This is frivolous. We are taking a no-settlement position.”
Gaining debt
Few patients sued by the bariatric practice mount a defense in court and those who do fight often lose, court records show.
The medical practice won default judgments totaling nearly $6 million in about 90 of the 300 cases in the sample reviewed by KFF Health News. Default judgments are entered when the defendant fails to respond.
Many cases either are pending, or it is not clear from court filings how they were resolved.
Some patients tried to argue that the fees were too high or that they didn’t understand going in how much they could owe. One woman, trying to push back against a demand for more than $100,000, said in a legal filing that she “was given numerous papers to sign without anyone of the staff members explaining to me what it actually meant.” Another patient, who was sued for more than $40,000, wrote: “I don’t have the means to pay this bill.”
Among the cases described in court records:
- A Westchester County, N.Y., woman was sued for $102,556 and settled for $72,000 in May 2021. She agreed to pay $7,500 upon signing the settlement and $500 a month from September 2021 to May 2032.
- A Peekskill, N.Y., woman in a December 2019 judgment was held liable for $384,092, which included $94,047 in interest.
- A Newburgh, N.Y., man was sued in 2021 for $252,309 in medical bills, 12% interest, and $84,103 in attorneys’ fees. The case is pending.
Robert Cohen, a longtime attorney for the bariatric practice, testified in a November 2021 hearing that the lawyers take “a contingency fee of one-third of our recovery” in these cases. In that case, Mr. Cohen had requested $13,578 based on his contingency fee arrangement. He testified that he spent 7.3 hours on the case and that his customary billing rate was $475 per hour, which came to $3,467.50. The judge awarded the lower amount, according to a transcript of the hearing.
Teresa LaMasters, MD, president of the American Society for Metabolic and Bariatric Surgery, said suing patients for large sums “is not a common practice” among bariatric surgeons.
“This is not what the vast majority in the field would espouse,” she said.
But Dr. Garber, the NYBG’s chief executive, suggested patients deserve blame.
“These lawsuits stem from these patients stealing the insurance money rather than forwarding it onto NYBG as they are morally and contractually obligated to do,” Dr. Garber wrote in an email to KFF Health News.
Dr. Garber added: “The issue is not with what we bill, but rather with the fact that the insurance companies refuse to send payment directly to us.”
‘A kooky system’
Defense attorneys argue that many patients don’t fully comprehend the perils of failing to pay on time – for whatever reason.
In a few cases, patients admitted pocketing checks they were obligated to turn over to the medical practice. But for the most part, court records don’t specify how many such checks were issued and for what amounts – or whether the patient improperly cashed them.
“It’s a kooky system,” said Paul Brite, an attorney who has faced off against the bariatric practice in court.
“You sign these documents that could cost you tons of money. It shouldn’t be that way,” he said. “This can ruin their financial life.”
New York lawmakers have acted to limit the damage from medical debt, including “surprise bills.”
In November, Democratic Gov. Kathy Hochul signed legislation that prohibits health care providers from slapping liens on a primary residence or garnishing wages.
But contracts with onerous repayment terms represent an “evolving area of law” and an alarming “new twist” on concerns over medical debt, said Ms. Benjamin, the community service society lawyer.
She said contract “accelerator clauses” that trigger severe penalties if patients miss payments should not be permitted for medical debt.
“If you default, the full amount is due,” she said. “This is really a bummer.”
‘Fair market value’
The debt collection lawsuits argue that weight-loss patients had agreed to pay “fair market value” for services – and the doctors are only trying to secure money they are due.
But some prices far exceed typical insurance payments for obesity treatments across the country, according to a medical billing data registry. Surgeons performed about 200,000 bariatric operations in 2020, according to the bariatric surgery society.
Ms. Wallace, the Brooklyn legal assistant, was billed $60,500 for her lap sleeve gastrectomy, though how much her insurance actually paid remains to be hashed out in court.
Michael Arrigo, a California medical billing expert at No World Borders, called the prices “outrageous” and “unreasonable and, in fact, likely unconscionable.”
“I disagree that these are fair market charges,” he said.
Dr. LaMasters called the gastrectomy price billed to Ms. Wallace “really expensive” and “a severe outlier.” While charges vary by region, she quoted a typical price of around $22,000.
Dr. Garber said NYBG “bills at usual and customary rates” determined by Fair Health, a New York City-based repository of insurance claims data. Fair Health “sets these rates based upon the acceptable price for our geographic location,” he said.
But Rachel Kent, Fair Health’s senior director of marketing, told KFF Health News that the group “does not set rates, nor determine or take any position on what constitutes ‘usual and customary rates.’ ” Instead, it reports the prices providers are charging in a given area.
Overall, Fair Health data shows huge price variations even in adjacent ZIP codes in the metro area. In Long Island’s Roslyn Heights neighborhood, where NYBG is based, Fair Health lists the out-of-network price charged by providers in the area as $60,500, the figure Ms. Wallace was billed.
But in several other New York City–area ZIP codes the price charged for the gastrectomy procedure hovers around $20,000, according to the data bank. The price in Manhattan is $17,500, for instance, according to Fair Health.
Nationwide, the average cost in 2021 for bariatric surgery done in a hospital was $32,868, according to a KFF analysis of health insurance claims.
Private equity arrives
Dr. Garber said in a court affidavit in May 2022 that he founded the bariatric practice “with a singular focus: providing safe, effective care to patients suffering from obesity and its resulting complications.”
Under his leadership, the practice has “developed into New York’s elite institution for obesity treatment,” Dr. Garber said. He said the group’s surgeons are “highly sought after to train other bariatric surgeons throughout the country and are active in the development of new, cutting-edge bariatric surgery techniques.”
In 2017, Dr. Garber and partners agreed on a business plan to help spur growth and “attract private equity investment,” according to the affidavit.
They formed a separate company to handle the bariatric practice’s business side. Known as management services organizations, such companies provide a way for private equity investors to circumvent laws in some states that prohibit nonphysicians from owning a stake in a medical practice.
In August 2019, the private equity firm Sentinel Capital Partners bought 65% of the MSO for $156.5 million, according to Dr. Garber’s affidavit. The management company is now known as New You Bariatric Group. The private equity firm did not respond to requests for comment.
Dr. Garber, in a September 2021 American Society for Metabolic and Bariatric Surgery webinar viewable online, said the weight-loss practice spends $6 million a year on media and marketing directly to patients – and is on a roll. Nationally, bariatric surgery is growing 6% annually, he said. NYBG boasts two dozen offices in the tri-state area of New York, New Jersey, and Connecticut and is poised to expand into more states.
“Since private equity, we’ve been growing at 30%-40% year over year,” Dr. Garber said.
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.
Seven months after Lahavah Wallace’s weight-loss operation, a New York bariatric surgery practice sued her, accusing her of “intentionally” failing to pay nearly $18,000 of her bill.
Long Island Minimally Invasive Surgery, which does business as the New York Bariatric Group, went on to accuse Ms. Wallace of “embezzlement,” alleging she kept insurance payments that should have been turned over to the practice.
Ms. Wallace denies the allegations, which the bariatric practice has leveled against patients in hundreds of debt-collection lawsuits filed over the past 4 years, court records in New York state show.
In about 60 cases, the lawsuits demanded $100,000 or more from patients. Some patients were found liable for tens of thousands of dollars in interest charges or wound up shackled with debt that could take a decade or more to shake. Others are facing the likely prospect of six-figure financial penalties, court records show.
Backed by a major private equity firm, the bariatric practice spends millions each year on advertisements featuring patients who have dropped 100 pounds or more after bariatric procedures, sometimes having had a portion of their stomachs removed. The ads have run on TV, online, and on New York City subway posters.
The online ads, often showcasing the slogan “Stop obesity for life,” appealed to Ms. Wallace, who lives in Brooklyn and works as a legal assistant for the state of New York. She said she turned over checks from her insurer to the bariatric group and was stunned when the medical practice hauled her into court citing an “out-of-network payment agreement” she had signed before her surgery.
“I really didn’t know what I was signing,” Ms. Wallace told KFF Health News. “I didn’t pay enough attention.”
Shawn Garber, MD, a bariatric surgeon who founded the practice in 2000 on Long Island and serves as its CEO, said that “prior to rendering services” his office staff advises patients of the costs and their responsibility to pay the bill.
The bariatric group has cited these out-of-network payment agreements in at least 300 lawsuits filed against patients from January 2019 to 2022 demanding nearly $19 million to cover medical bills, interest charges, and attorney’s fees, a KFF Health News review of New York state court records found.
Danny De Voe, a partner at Sahn Ward Braff Koblenz law firm in Uniondale, N.Y., who filed many of those suits, declined to comment, citing attorney-client privilege.
In most cases, the medical practice had agreed to accept an insurance company’s out-of-network rate as full payment for its services – with caveats, according to court filings.
In the agreements they signed, patients promised to pay any coinsurance, meeting any deductible, and pass on to the medical practice any reimbursement checks they received from their health plans within 7 days.
KFF Health News found – while legal fees and other costs can layer on thousands more.
Elisabeth Benjamin, a lawyer with the Community Service Society of New York, said conflicts can arise when insurers send checks to pay for out-of-network medical services to patients rather than reimbursing a medical provider directly.
“We would prefer to see regulators step in and stop that practice,” she said, adding it “causes tension between providers and patients.”
That’s certainly true for Ms. Wallace. The surgery practice sued her in August 2022demanding $17,981 in fees it said remained unpaid after her January 2022 laparoscopic sleeve gastrectomy, an operation in which much of the stomach is removed to assist weight loss.
The lawsuit also tacked on a demand for $5,993 in attorney’s fees, court records show.
The suit alleges Ms. Wallace signed the contract even though she “had no intention” of paying her bills. The complaint goes on to accuse her of “committing embezzlement” by “willfully, intentionally, deliberately and maliciously” depositing checks from her health plan into her personal account.
The suit doesn’t include details to substantiate these claims, and Ms. Wallace said in her court response they are not true. Ms. Wallace said she turned over checks for the charges.
“They billed the insurance for everything they possibly could,” Ms. Wallace said.
In September, Ms. Wallace filed for bankruptcy, hoping to discharge the bariatric care debt along with about $4,700 in unrelated credit card charges.
The medical practice fired back in November by filing an “adversary complaint” in her Brooklyn bankruptcy court proceeding that argues her medical debt should not be forgiven because Ms. Wallace committed fraud.
The adversary complaint, which is pending in the bankruptcy case, accuses Ms. Wallace of “fraudulently” inducing the surgery center to perform “elective medical procedures” without requiring payment up front.
Both the harsh wording and claims of wrongdoing have infuriated Ms. Wallace and her attorney, Jacob Silver, of Brooklyn.
Mr. Silver wants the medical practice to turn over records of the payments received from Ms. Wallace. “There is no fraud here,” he said. “This is frivolous. We are taking a no-settlement position.”
Gaining debt
Few patients sued by the bariatric practice mount a defense in court and those who do fight often lose, court records show.
The medical practice won default judgments totaling nearly $6 million in about 90 of the 300 cases in the sample reviewed by KFF Health News. Default judgments are entered when the defendant fails to respond.
Many cases either are pending, or it is not clear from court filings how they were resolved.
Some patients tried to argue that the fees were too high or that they didn’t understand going in how much they could owe. One woman, trying to push back against a demand for more than $100,000, said in a legal filing that she “was given numerous papers to sign without anyone of the staff members explaining to me what it actually meant.” Another patient, who was sued for more than $40,000, wrote: “I don’t have the means to pay this bill.”
Among the cases described in court records:
- A Westchester County, N.Y., woman was sued for $102,556 and settled for $72,000 in May 2021. She agreed to pay $7,500 upon signing the settlement and $500 a month from September 2021 to May 2032.
- A Peekskill, N.Y., woman in a December 2019 judgment was held liable for $384,092, which included $94,047 in interest.
- A Newburgh, N.Y., man was sued in 2021 for $252,309 in medical bills, 12% interest, and $84,103 in attorneys’ fees. The case is pending.
Robert Cohen, a longtime attorney for the bariatric practice, testified in a November 2021 hearing that the lawyers take “a contingency fee of one-third of our recovery” in these cases. In that case, Mr. Cohen had requested $13,578 based on his contingency fee arrangement. He testified that he spent 7.3 hours on the case and that his customary billing rate was $475 per hour, which came to $3,467.50. The judge awarded the lower amount, according to a transcript of the hearing.
Teresa LaMasters, MD, president of the American Society for Metabolic and Bariatric Surgery, said suing patients for large sums “is not a common practice” among bariatric surgeons.
“This is not what the vast majority in the field would espouse,” she said.
But Dr. Garber, the NYBG’s chief executive, suggested patients deserve blame.
“These lawsuits stem from these patients stealing the insurance money rather than forwarding it onto NYBG as they are morally and contractually obligated to do,” Dr. Garber wrote in an email to KFF Health News.
Dr. Garber added: “The issue is not with what we bill, but rather with the fact that the insurance companies refuse to send payment directly to us.”
‘A kooky system’
Defense attorneys argue that many patients don’t fully comprehend the perils of failing to pay on time – for whatever reason.
In a few cases, patients admitted pocketing checks they were obligated to turn over to the medical practice. But for the most part, court records don’t specify how many such checks were issued and for what amounts – or whether the patient improperly cashed them.
“It’s a kooky system,” said Paul Brite, an attorney who has faced off against the bariatric practice in court.
“You sign these documents that could cost you tons of money. It shouldn’t be that way,” he said. “This can ruin their financial life.”
New York lawmakers have acted to limit the damage from medical debt, including “surprise bills.”
In November, Democratic Gov. Kathy Hochul signed legislation that prohibits health care providers from slapping liens on a primary residence or garnishing wages.
But contracts with onerous repayment terms represent an “evolving area of law” and an alarming “new twist” on concerns over medical debt, said Ms. Benjamin, the community service society lawyer.
She said contract “accelerator clauses” that trigger severe penalties if patients miss payments should not be permitted for medical debt.
“If you default, the full amount is due,” she said. “This is really a bummer.”
‘Fair market value’
The debt collection lawsuits argue that weight-loss patients had agreed to pay “fair market value” for services – and the doctors are only trying to secure money they are due.
But some prices far exceed typical insurance payments for obesity treatments across the country, according to a medical billing data registry. Surgeons performed about 200,000 bariatric operations in 2020, according to the bariatric surgery society.
Ms. Wallace, the Brooklyn legal assistant, was billed $60,500 for her lap sleeve gastrectomy, though how much her insurance actually paid remains to be hashed out in court.
Michael Arrigo, a California medical billing expert at No World Borders, called the prices “outrageous” and “unreasonable and, in fact, likely unconscionable.”
“I disagree that these are fair market charges,” he said.
Dr. LaMasters called the gastrectomy price billed to Ms. Wallace “really expensive” and “a severe outlier.” While charges vary by region, she quoted a typical price of around $22,000.
Dr. Garber said NYBG “bills at usual and customary rates” determined by Fair Health, a New York City-based repository of insurance claims data. Fair Health “sets these rates based upon the acceptable price for our geographic location,” he said.
But Rachel Kent, Fair Health’s senior director of marketing, told KFF Health News that the group “does not set rates, nor determine or take any position on what constitutes ‘usual and customary rates.’ ” Instead, it reports the prices providers are charging in a given area.
Overall, Fair Health data shows huge price variations even in adjacent ZIP codes in the metro area. In Long Island’s Roslyn Heights neighborhood, where NYBG is based, Fair Health lists the out-of-network price charged by providers in the area as $60,500, the figure Ms. Wallace was billed.
But in several other New York City–area ZIP codes the price charged for the gastrectomy procedure hovers around $20,000, according to the data bank. The price in Manhattan is $17,500, for instance, according to Fair Health.
Nationwide, the average cost in 2021 for bariatric surgery done in a hospital was $32,868, according to a KFF analysis of health insurance claims.
Private equity arrives
Dr. Garber said in a court affidavit in May 2022 that he founded the bariatric practice “with a singular focus: providing safe, effective care to patients suffering from obesity and its resulting complications.”
Under his leadership, the practice has “developed into New York’s elite institution for obesity treatment,” Dr. Garber said. He said the group’s surgeons are “highly sought after to train other bariatric surgeons throughout the country and are active in the development of new, cutting-edge bariatric surgery techniques.”
In 2017, Dr. Garber and partners agreed on a business plan to help spur growth and “attract private equity investment,” according to the affidavit.
They formed a separate company to handle the bariatric practice’s business side. Known as management services organizations, such companies provide a way for private equity investors to circumvent laws in some states that prohibit nonphysicians from owning a stake in a medical practice.
In August 2019, the private equity firm Sentinel Capital Partners bought 65% of the MSO for $156.5 million, according to Dr. Garber’s affidavit. The management company is now known as New You Bariatric Group. The private equity firm did not respond to requests for comment.
Dr. Garber, in a September 2021 American Society for Metabolic and Bariatric Surgery webinar viewable online, said the weight-loss practice spends $6 million a year on media and marketing directly to patients – and is on a roll. Nationally, bariatric surgery is growing 6% annually, he said. NYBG boasts two dozen offices in the tri-state area of New York, New Jersey, and Connecticut and is poised to expand into more states.
“Since private equity, we’ve been growing at 30%-40% year over year,” Dr. Garber said.
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.
Seven months after Lahavah Wallace’s weight-loss operation, a New York bariatric surgery practice sued her, accusing her of “intentionally” failing to pay nearly $18,000 of her bill.
Long Island Minimally Invasive Surgery, which does business as the New York Bariatric Group, went on to accuse Ms. Wallace of “embezzlement,” alleging she kept insurance payments that should have been turned over to the practice.
Ms. Wallace denies the allegations, which the bariatric practice has leveled against patients in hundreds of debt-collection lawsuits filed over the past 4 years, court records in New York state show.
In about 60 cases, the lawsuits demanded $100,000 or more from patients. Some patients were found liable for tens of thousands of dollars in interest charges or wound up shackled with debt that could take a decade or more to shake. Others are facing the likely prospect of six-figure financial penalties, court records show.
Backed by a major private equity firm, the bariatric practice spends millions each year on advertisements featuring patients who have dropped 100 pounds or more after bariatric procedures, sometimes having had a portion of their stomachs removed. The ads have run on TV, online, and on New York City subway posters.
The online ads, often showcasing the slogan “Stop obesity for life,” appealed to Ms. Wallace, who lives in Brooklyn and works as a legal assistant for the state of New York. She said she turned over checks from her insurer to the bariatric group and was stunned when the medical practice hauled her into court citing an “out-of-network payment agreement” she had signed before her surgery.
“I really didn’t know what I was signing,” Ms. Wallace told KFF Health News. “I didn’t pay enough attention.”
Shawn Garber, MD, a bariatric surgeon who founded the practice in 2000 on Long Island and serves as its CEO, said that “prior to rendering services” his office staff advises patients of the costs and their responsibility to pay the bill.
The bariatric group has cited these out-of-network payment agreements in at least 300 lawsuits filed against patients from January 2019 to 2022 demanding nearly $19 million to cover medical bills, interest charges, and attorney’s fees, a KFF Health News review of New York state court records found.
Danny De Voe, a partner at Sahn Ward Braff Koblenz law firm in Uniondale, N.Y., who filed many of those suits, declined to comment, citing attorney-client privilege.
In most cases, the medical practice had agreed to accept an insurance company’s out-of-network rate as full payment for its services – with caveats, according to court filings.
In the agreements they signed, patients promised to pay any coinsurance, meeting any deductible, and pass on to the medical practice any reimbursement checks they received from their health plans within 7 days.
KFF Health News found – while legal fees and other costs can layer on thousands more.
Elisabeth Benjamin, a lawyer with the Community Service Society of New York, said conflicts can arise when insurers send checks to pay for out-of-network medical services to patients rather than reimbursing a medical provider directly.
“We would prefer to see regulators step in and stop that practice,” she said, adding it “causes tension between providers and patients.”
That’s certainly true for Ms. Wallace. The surgery practice sued her in August 2022demanding $17,981 in fees it said remained unpaid after her January 2022 laparoscopic sleeve gastrectomy, an operation in which much of the stomach is removed to assist weight loss.
The lawsuit also tacked on a demand for $5,993 in attorney’s fees, court records show.
The suit alleges Ms. Wallace signed the contract even though she “had no intention” of paying her bills. The complaint goes on to accuse her of “committing embezzlement” by “willfully, intentionally, deliberately and maliciously” depositing checks from her health plan into her personal account.
The suit doesn’t include details to substantiate these claims, and Ms. Wallace said in her court response they are not true. Ms. Wallace said she turned over checks for the charges.
“They billed the insurance for everything they possibly could,” Ms. Wallace said.
In September, Ms. Wallace filed for bankruptcy, hoping to discharge the bariatric care debt along with about $4,700 in unrelated credit card charges.
The medical practice fired back in November by filing an “adversary complaint” in her Brooklyn bankruptcy court proceeding that argues her medical debt should not be forgiven because Ms. Wallace committed fraud.
The adversary complaint, which is pending in the bankruptcy case, accuses Ms. Wallace of “fraudulently” inducing the surgery center to perform “elective medical procedures” without requiring payment up front.
Both the harsh wording and claims of wrongdoing have infuriated Ms. Wallace and her attorney, Jacob Silver, of Brooklyn.
Mr. Silver wants the medical practice to turn over records of the payments received from Ms. Wallace. “There is no fraud here,” he said. “This is frivolous. We are taking a no-settlement position.”
Gaining debt
Few patients sued by the bariatric practice mount a defense in court and those who do fight often lose, court records show.
The medical practice won default judgments totaling nearly $6 million in about 90 of the 300 cases in the sample reviewed by KFF Health News. Default judgments are entered when the defendant fails to respond.
Many cases either are pending, or it is not clear from court filings how they were resolved.
Some patients tried to argue that the fees were too high or that they didn’t understand going in how much they could owe. One woman, trying to push back against a demand for more than $100,000, said in a legal filing that she “was given numerous papers to sign without anyone of the staff members explaining to me what it actually meant.” Another patient, who was sued for more than $40,000, wrote: “I don’t have the means to pay this bill.”
Among the cases described in court records:
- A Westchester County, N.Y., woman was sued for $102,556 and settled for $72,000 in May 2021. She agreed to pay $7,500 upon signing the settlement and $500 a month from September 2021 to May 2032.
- A Peekskill, N.Y., woman in a December 2019 judgment was held liable for $384,092, which included $94,047 in interest.
- A Newburgh, N.Y., man was sued in 2021 for $252,309 in medical bills, 12% interest, and $84,103 in attorneys’ fees. The case is pending.
Robert Cohen, a longtime attorney for the bariatric practice, testified in a November 2021 hearing that the lawyers take “a contingency fee of one-third of our recovery” in these cases. In that case, Mr. Cohen had requested $13,578 based on his contingency fee arrangement. He testified that he spent 7.3 hours on the case and that his customary billing rate was $475 per hour, which came to $3,467.50. The judge awarded the lower amount, according to a transcript of the hearing.
Teresa LaMasters, MD, president of the American Society for Metabolic and Bariatric Surgery, said suing patients for large sums “is not a common practice” among bariatric surgeons.
“This is not what the vast majority in the field would espouse,” she said.
But Dr. Garber, the NYBG’s chief executive, suggested patients deserve blame.
“These lawsuits stem from these patients stealing the insurance money rather than forwarding it onto NYBG as they are morally and contractually obligated to do,” Dr. Garber wrote in an email to KFF Health News.
Dr. Garber added: “The issue is not with what we bill, but rather with the fact that the insurance companies refuse to send payment directly to us.”
‘A kooky system’
Defense attorneys argue that many patients don’t fully comprehend the perils of failing to pay on time – for whatever reason.
In a few cases, patients admitted pocketing checks they were obligated to turn over to the medical practice. But for the most part, court records don’t specify how many such checks were issued and for what amounts – or whether the patient improperly cashed them.
“It’s a kooky system,” said Paul Brite, an attorney who has faced off against the bariatric practice in court.
“You sign these documents that could cost you tons of money. It shouldn’t be that way,” he said. “This can ruin their financial life.”
New York lawmakers have acted to limit the damage from medical debt, including “surprise bills.”
In November, Democratic Gov. Kathy Hochul signed legislation that prohibits health care providers from slapping liens on a primary residence or garnishing wages.
But contracts with onerous repayment terms represent an “evolving area of law” and an alarming “new twist” on concerns over medical debt, said Ms. Benjamin, the community service society lawyer.
She said contract “accelerator clauses” that trigger severe penalties if patients miss payments should not be permitted for medical debt.
“If you default, the full amount is due,” she said. “This is really a bummer.”
‘Fair market value’
The debt collection lawsuits argue that weight-loss patients had agreed to pay “fair market value” for services – and the doctors are only trying to secure money they are due.
But some prices far exceed typical insurance payments for obesity treatments across the country, according to a medical billing data registry. Surgeons performed about 200,000 bariatric operations in 2020, according to the bariatric surgery society.
Ms. Wallace, the Brooklyn legal assistant, was billed $60,500 for her lap sleeve gastrectomy, though how much her insurance actually paid remains to be hashed out in court.
Michael Arrigo, a California medical billing expert at No World Borders, called the prices “outrageous” and “unreasonable and, in fact, likely unconscionable.”
“I disagree that these are fair market charges,” he said.
Dr. LaMasters called the gastrectomy price billed to Ms. Wallace “really expensive” and “a severe outlier.” While charges vary by region, she quoted a typical price of around $22,000.
Dr. Garber said NYBG “bills at usual and customary rates” determined by Fair Health, a New York City-based repository of insurance claims data. Fair Health “sets these rates based upon the acceptable price for our geographic location,” he said.
But Rachel Kent, Fair Health’s senior director of marketing, told KFF Health News that the group “does not set rates, nor determine or take any position on what constitutes ‘usual and customary rates.’ ” Instead, it reports the prices providers are charging in a given area.
Overall, Fair Health data shows huge price variations even in adjacent ZIP codes in the metro area. In Long Island’s Roslyn Heights neighborhood, where NYBG is based, Fair Health lists the out-of-network price charged by providers in the area as $60,500, the figure Ms. Wallace was billed.
But in several other New York City–area ZIP codes the price charged for the gastrectomy procedure hovers around $20,000, according to the data bank. The price in Manhattan is $17,500, for instance, according to Fair Health.
Nationwide, the average cost in 2021 for bariatric surgery done in a hospital was $32,868, according to a KFF analysis of health insurance claims.
Private equity arrives
Dr. Garber said in a court affidavit in May 2022 that he founded the bariatric practice “with a singular focus: providing safe, effective care to patients suffering from obesity and its resulting complications.”
Under his leadership, the practice has “developed into New York’s elite institution for obesity treatment,” Dr. Garber said. He said the group’s surgeons are “highly sought after to train other bariatric surgeons throughout the country and are active in the development of new, cutting-edge bariatric surgery techniques.”
In 2017, Dr. Garber and partners agreed on a business plan to help spur growth and “attract private equity investment,” according to the affidavit.
They formed a separate company to handle the bariatric practice’s business side. Known as management services organizations, such companies provide a way for private equity investors to circumvent laws in some states that prohibit nonphysicians from owning a stake in a medical practice.
In August 2019, the private equity firm Sentinel Capital Partners bought 65% of the MSO for $156.5 million, according to Dr. Garber’s affidavit. The management company is now known as New You Bariatric Group. The private equity firm did not respond to requests for comment.
Dr. Garber, in a September 2021 American Society for Metabolic and Bariatric Surgery webinar viewable online, said the weight-loss practice spends $6 million a year on media and marketing directly to patients – and is on a roll. Nationally, bariatric surgery is growing 6% annually, he said. NYBG boasts two dozen offices in the tri-state area of New York, New Jersey, and Connecticut and is poised to expand into more states.
“Since private equity, we’ve been growing at 30%-40% year over year,” Dr. Garber said.
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.
Death by a thousand clicks
Where electronic health records went wrong.
The pain radiated from the top of Annette Monachelli’s head, and it got worse when she changed positions. It didn’t feel like her usual migraine. The 47-year-old Vermont attorney turned innkeeper visited her local doctor at the Stowe Family Practice twice about the problem in late November 2012, but got little relief.
Two months later, Monachelli was dead of an aneurysm, a condition that, despite the symptoms and the appointments, had never been tested for or diagnosed until she turned up in the emergency room days before her death.
Monachelli’s husband sued Stowe, the federally qualified health center the physician worked for. Owen Foster, a newly hired assistant U.S. attorney with the District of Vermont, was assigned to defend the government. Though it looked to be a standard medical malpractice case, Foster was on the cusp of discovering something much bigger – what his boss, U.S. Attorney Christina Nolan, calls the “frontier of health care fraud” – and prosecuting a first-of-its-kind case that landed the largest-ever financial recovery in Vermont’s history.
Foster began with Monachelli’s medical records, which offered a puzzle. Her doctor had considered the possibility of an aneurysm and, to rule it out, had ordered a head scan through the clinic’s software system, the government alleged in court filings. The test, in theory, would have caught the bleeding in Monachelli’s brain. But the order never made it to the lab; it had never been transmitted.
The software in question was an electronic health records system, or EHR, made by eClinicalWorks (eCW), one of the leading sellers of record-keeping software for physicians in America, currently used by 850,000 health professionals in the U.S. It didn’t take long for Foster to assemble a dossier of troubling reports – Better Business Bureau complaints, issues flagged on an eCW user board, and legal cases filed around the country – suggesting the company’s technology didn’t work quite the way it said it did.
Until this point, Foster, like most Americans, knew next to nothing about electronic medical records, but he was quickly amassing clues that eCW’s software had major problems – some of which put patients, like Annette Monachelli, at risk.
Damning evidence came from a whistleblower claim filed in 2011 against the company. Brendan Delaney, a British cop turned EHR expert, was hired in 2010 by New York City to work on the eCW implementation at Rikers Island, a jail complex that then had more than 100,000 inmates. But soon after he was hired, Delaney noticed scores of troubling problems with the system, which became the basis for his lawsuit. The patient medication lists weren’t reliable; prescribed drugs would not show up, while discontinued drugs would appear as current, according to the complaint. The EHR would sometimes display one patient’s medication profile accompanied by the physician’s note for a different patient, making it easy to misdiagnose or prescribe a drug to the wrong individual. Prescriptions, some 30,000 of them in 2010, lacked proper start and stop dates, introducing the opportunity for under- or overmedication. The eCW system did not reliably track lab results, concluded Delaney, who tallied 1,884 tests for which they had never gotten outcomes.
The District of Vermont launched an official federal investigation in 2015.
The eCW spaghetti code was so buggy that when one glitch got fixed, another would develop, the government found. The user interface offered a few ways to order a lab test or diagnostic image, for example, but not all of them seemed to function. The software would detect and warn users of dangerous drug interactions, but unbeknownst to physicians, the alerts stopped if the drug order was customized. “It would be like if I was driving with the radio on and the windshield wipers going and when I hit the turn signal, the brakes suddenly didn’t work,” said Foster.
The eCW system also failed to use the standard drug codes and, in some instances, lab and diagnosis codes as well, the government alleged.
The case never got to a jury. In May 2017, eCW paid a $155 million settlement to the government over alleged “false claims” and kickbacks – one physician made tens of thousands of dollars – to clients who promoted its product. Despite the record settlement, the company denied wrongdoing; eCW did not respond to numerous requests for comment.
If there is a kicker to this tale, it is this: The U.S. government bankrolled the adoption of this software – and continues to pay for it. Or we should say: You do.
Which brings us to the strange, sad, and aggravating story that unfolds below. It is not about one lawsuit or a piece of sloppy technology. Rather, it’s about a trouble-prone industry that intersects, in the most personal way, with every one of our lives. It’s about a $3.7 trillion health care system idling at the crossroads of progress. And it’s about a slew of unintended consequences – the surprising casualties of a big idea whose time had seemingly come.
The virtual magic bullet
Electronic health records were supposed to do a lot: make medicine safer, bring higher-quality care, empower patients, and yes, even save money. Boosters heralded an age when researchers could harness the big data within to reveal the most effective treatments for disease and sharply reduce medical errors. Patients, in turn, would have truly portable health records, being able to share their medical histories in a flash with doctors and hospitals anywhere in the country – essential when life-and-death decisions are being made in the ER.
But 10 years after President Barack Obama signed a law to accelerate the digitization of medical records – with the federal government, so far, sinking $36 billion into the effort – America has little to show for its investment. KHN and Fortune spoke with more than 100 physicians, patients, IT experts and administrators, health policy leaders, attorneys, top government officials and representatives at more than a half-dozen EHR vendors, including the CEOs of two of the companies. The interviews reveal a tragic missed opportunity: Rather than an electronic ecosystem of information, the nation’s thousands of EHRs largely remain a sprawling, disconnected patchwork. Moreover, the effort has handcuffed health providers to technology they mostly can’t stand and has enriched and empowered the $13-billion-a-year industry that sells it.
By one measure, certainly, the effort has achieved what it set out to do: Today, 96% of hospitals have adopted EHRs, up from just 9% in 2008. But on most other counts, the newly installed technology has fallen well short. Physicians complain about clumsy, unintuitive systems and the number of hours spent clicking, typing and trying to navigate them – which is more than the hours they spend with patients. Unlike, say, with the global network of ATMs, the proprietary EHR systems made by more than 700 vendors routinely don’t talk to one another, meaning that doctors still resort to transferring medical data via fax and CD-ROM. Patients, meanwhile, still struggle to access their own records – and, sometimes, just plain can’t.
Instead of reducing costs, many say, EHRs, which were originally optimized for billing rather than for patient care, have instead made it easier to engage in “upcoding” or bill inflation (though some say the systems also make such fraud easier to catch).
More gravely still, a months-long joint investigation by KHN and Fortune has found that instead of streamlining medicine, the government’s EHR initiative has created a host of largely unacknowledged patient safety risks. Our investigation found that alarming reports of patient deaths, serious injuries and near misses – thousands of them – tied to software glitches, user errors or other flaws have piled up, largely unseen, in various government-funded and private repositories.
Compounding the problem are entrenched secrecy policies that continue to keep software failures out of public view. EHR vendors often impose contractual “gag clauses” that discourage buyers from speaking out about safety issues and disastrous software installations – though some customers have taken to the courts to air their grievances. Plaintiffs, moreover, say hospitals often fight to withhold records from injured patients or their families. Indeed, two doctors who spoke candidly about the problems they faced with EHRs later asked that their names not be used, adding that they were forbidden by their health care organizations to talk. Says Assistant U.S. Attorney Foster, the EHR vendors “are protected by a shield of silence.”
Though the software has reduced some types of clinical mistakes common in the era of handwritten notes, Raj Ratwani, a researcher at MedStar Health in Washington, D.C., has documented new patterns of medical errors tied to EHRs that he believes are both perilous and preventable. “The fact that we’re not able to broadcast that nationally and solve these issues immediately, and that another patient somewhere else may be harmed by the very same issue – that just can’t happen,” he said.
David Blumenthal, who, as Obama’s national coordinator for health information technology, was one of the architects of the EHR initiative, acknowledged to KHN and Fortune that electronic health records “have not fulfilled their potential. I think few would argue they have.”
The former president has likewise singled out the effort as one of his most disappointing, bemoaning in a January 2017 interview with Vox “the fact that there are still just mountains of paperwork ... and the doctors still have to input stuff, and the nurses are spending all their time on all this administrative work. We put a big slug of money into trying to encourage everyone to digitalize, to catch up with the rest of the world ... that’s been harder than we expected.”
Seema Verma, the current chief of the Centers for Medicare & Medicaid Services (CMS), which oversees the EHR effort today, shudders at the billions of dollars spent building software that doesn’t share data – an electronic bridge to nowhere. “Providers developed their own systems that may or may not even have worked well for them,” she told KHN and Fortune in an interview last month, “but we didn’t think about how all these systems connect with one another. That was the real missing piece.”
Perhaps none of the initiative’s former boosters is quite as frustrated as former Vice President Joe Biden. At a 2017 meeting with health care leaders in Washington, he railed against the infuriating challenge of getting his son Beau’s medical records from one hospital to another. “I was stunned when my son for a year was battling stage 4 glioblastoma,” said Biden. “I couldn’t get his records. I’m the vice president of the United States of America. ... It was an absolute nightmare. It was ridiculous, absolutely ridiculous, that we’re in that circumstance.”
A bridge to nowhere
As Biden would tell you, the original concept was a smart one. The wave of digitization had swept up virtually every industry, bringing both disruption and, in most cases, greater efficiency. And perhaps none of these industries was more deserving of digital liberation than medicine, where life-measuring and potentially lifesaving data was locked away in paper crypts – stack upon stack of file folders at doctors’ offices across the country.
Stowed in steel cabinets, the records were next to useless. Nobody – particularly at the dawn of the age of the iPhone – thought it was a good idea to leave them that way. The problem, say critics, was in the way that policymakers set about to transform them.
“Every single idea was well-meaning and potentially of societal benefit, but the combined burden of all of them hitting clinicians simultaneously made office practice basically impossible,” said John Halamka, chief information officer at Beth Israel Deaconess Medical Center, who served on the EHR standards committees under both President George W. Bush and President Obama. “In America, we have 11 minutes to see a patient, and, you know, you’re going to be empathetic, make eye contact, enter about 100 pieces of data, and never commit malpractice. It’s not possible!”
KHN and Fortune examined more than two dozen medical negligence cases that have alleged that EHRs either contributed to injuries, had been improperly altered, or were withheld from patients to conceal substandard care. In such cases, the suits typically settle prior to trial with strict confidentiality pledges, so it’s often not possible to determine the merits of the allegations. EHR vendors also frequently have contract stipulations, known as “hold harmless clauses,” that protect them from liability if hospitals are later sued for medical errors – even if they relate to an issue with the technology.
But lawsuits, like that filed by Fabian Ronisky, which do emerge from this veil, are quite telling.
Ronisky, according to his complaint, arrived by ambulance at Providence Saint John’s Health Center in Santa Monica on the afternoon of March 2, 2015. For two days, the young lawyer had been suffering from severe headaches while a disorienting fever left him struggling to tell the 911 operator his address.
Suspecting meningitis, a doctor at the hospital performed a spinal tap, and the next day an infectious disease specialist typed in an order for a critical lab test – a check of the spinal fluid for viruses, including herpes simplex – into the hospital’s EHR.
The multimillion-dollar system, manufactured by Epic Systems Corp. and considered by some to be the Cadillac of medical software, had been installed at the hospital about four months earlier. Although the order appeared on Epic’s screen, it was not sent to the lab. It turned out, Epic’s software didn’t fully “interface” with the lab’s software, according to a lawsuit Ronisky filed in February 2017 in Los Angeles County Superior Court. His results and diagnosis were delayed – by days, he claimed – during which time he suffered irreversible brain damage from herpes encephalitis. The suit alleged the mishap delayed doctors from giving Ronisky a drug called acyclovir that might have minimized damage to his brain.
Epic denied any liability or defects in its software; the company said the doctor failed to push the right button to send the order and that the hospital, not Epic, had configured the interface with the lab. Epic, among the nation’s largest manufacturers of computerized health records and the leading provider to most of America’s most elite medical centers, quietly paid $1 million to settle the suit in July 2018, according to court records. The hospital and two doctors paid a total of $7.5 million, and a case against a third doctor is pending trial. Ronisky, 34, who is fighting to rebuild his life, declined to comment.
Incidents like that which happened to Ronisky – or to Annette Monachelli, for that matter – are surprisingly common, data show. And the back-and-forth about where the fault lies in such cases is actually part of the problem: The systems are often so confusing (and training on them seldom sufficient) that errors frequently fall into a nether zone of responsibility. It can be hard to tell where human error begins and the technological shortcomings end.
EHRs promised to put all of a patient’s records in one place, but often that’s the problem. Critical or time-sensitive information routinely gets buried in an endless scroll of data, where in the rush of medical decision-making – and amid the maze of pulldown menus – it can be missed.
Thirteen-year-old Brooke Dilliplaine, who was severely allergic to dairy, was given a probiotic containing milk. The two doses sent her into “complete respiratory distress” and resulted in a collapsed lung, according to a lawsuit filed by her mother. Rory Staunton, 12, scraped his arm in gym class and then died of sepsis after ER doctors discharged the boy on the basis of lab results in the EHR that weren’t complete. And then there’s the case of Thomas Eric Duncan. The 42-year-old man was sent home in 2014 from a Dallas hospital infected with Ebola virus. Though a nurse had entered in the EHR his recent travel to Liberia, where an Ebola epidemic was then in full swing, the doctor never saw it. Duncan died a week later.
Many such cases end up in court. Typically, doctors and nurses blame faulty technology in the medical-records systems. The EHR vendors blame human error. And meanwhile, the cases mount.
Quantros, a private health care analytics firm, said it has logged 18,000 EHR-related safety events from 2007 through 2018, 3 percent of which resulted in patient harm, including seven deaths – a figure that a Quantros director said is “drastically underreported.”
A 2016 study by The Leapfrog Group, a patient-safety watchdog based in Washington, D.C., found that the medication-ordering function of hospital EHRs – a feature required by the government for certification but often configured differently in each system – failed to flag potentially harmful drug orders in 39 percent of cases in a test simulation. In 13 percent of those cases, the mistake could have been fatal
The Pew Charitable Trusts has, for the past few years, run an EHR safety project, taking aim at issues like usability and patient matching – the process of linking the correct medical record to the correct patient – a seemingly basic task at which the systems, even when made by the same EHR vendor, often fail. At some institutions, according to Pew, such matching was accurate only 50 percent of the time. Patients have discovered mistakes as well: A January survey by the Kaiser Family Foundation found that 1 in 5 patients spotted an error in their electronic medical records. (Kaiser Health News is an editorially independent program of the foundation.)
The Joint Commission, which certifies hospitals, has sounded alarms about a number of issues, including false alarms – which account for between 85 and 99 percent of EHR and medical device alerts. (One study by researchers at Oregon Health & Science University estimated that the average clinician working in the intensive care unit may be exposed to up to 7,000 passive alerts per day.) Such over-warning can be dangerous. From 2014 to 2018, the commission tallied 170 mostly voluntary reports of patient harm related to alarm management and alert fatigue – the phenomenon in which health workers, so overloaded with unnecessary warnings, ignore the occasional meaningful one. Of those 170 incidents, 101 resulted in patient deaths.
The Pennsylvania Patient Safety Authority, an independent state agency that collects information about adverse events and incidents, counted 775 “laboratory-test problems” related to health IT from January 2016 to December 2017.
To be sure, medical errors happened en masse in the age of paper medicine, when hospital staffers misinterpreted a physician’s scrawl or read the wrong chart to deadly consequence, for instance. But what is perhaps telling is how many doctors today opt for manual workarounds to their EHRs. Aaron Zachary Hettinger, an emergency medicine physician with MedStar Health in Washington, D.C., said that when he and fellow clinicians need to share critical patient information, they write it on a whiteboard or on a paper towel and leave it on their colleagues’ computer keyboards.
While the Food and Drug Administration doesn’t mandate reporting of EHR safety events – as it does for regulated medical devices – concerned posts have nonetheless proliferated in the FDA MAUDE database of adverse events, which now serves as an ad hoc bulletin board of warnings about the various systems.
Further complicating the picture is that health providers nearly always tailor their one-size-fits-all EHR systems to their own specifications. Such customization makes every one unique and often hard to compare with others – which, in turn, makes the source of mistakes difficult to determine.
Dr. Martin Makary, a surgical oncologist at Johns Hopkins and the co-author of a much-cited 2016 study that identified medical errors as the third-leading cause of death in America, credits EHRs for some safety improvements – including recent changes that have helped put electronic brakes on the opioid epidemic. But, he said, “we’ve swapped one set of problems for another. We used to struggle with handwriting and missing information. We now struggle with a lack of visual cues to know we’re writing and ordering on the correct patient.”
Dr. Joseph Schneider, a pediatrician at UT Southwestern Medical Center, compares the transition we’ve made, from paper records to electronic ones, to moving from horses to automobiles. But in this analogy, he added, “our cars have advanced to about the 1960s. They still don’t have seat belts or air bags.”
Schneider recalled one episode when his colleagues couldn’t understand why chunks of their notes would inexplicably disappear. They figured out the problem weeks later after intense study: Physicians had been inputting squiggly brackets – {} – the use of which, unbeknownst to even vendor representatives, deleted the text between them. (The EHR maker initially blamed the doctors, said Schneider.)
A broad coalition of actors, from National Nurses United to the Texas Medical Association to leaders within the FDA, has long called for oversight on electronic-record safety issues. Among the most outspoken is Ratwani, who directs MedStar Health’s National Center on Human Factors in Healthcare, a 30-person institute focused on optimizing the safety and usability of medical technology. Ratwani spent his early career in the defense industry, studying things like the intuitiveness of information displays. When he got to MedStar in 2012, he was stunned by “the types of [digital] interfaces being used” in health care, he said.
In a study published last year in the journal Health Affairs, Ratwani and colleagues studied medication errors at three pediatric hospitals from 2012 to 2017. They discovered that 3,243 of them were owing in part to EHR “usability issues.” Roughly 1 in 5 of these could have resulted in patient harm, the researchers found. “Poor interface design and poor implementations can lead to errors and sometimes death, and that is just unbelievably bad as well as completely fixable,” he said. “We should not have patients harmed this way.”
Using eye-tracking technology, Ratwani has demonstrated on video just how easy it is to make mistakes when performing basic tasks on the nation’s two leading EHR systems. When emergency room doctors went to order Tylenol, for example, they saw a drop-down menu listing 86 options, many of which were irrelevant for the specified patient. They had to read the list carefully, so as not to click the wrong dosage or form – though many do that too: In roughly 1 out of 1,000 orders, physicians accidentally select the suppository (designated “PR”) rather than the tablet dose (“OR”), according to one estimate. That’s not an error that will harm a patient – though other medication mix-ups can and do.
Earlier this year, MedStar’s human-factors center launched a website and public awareness campaign with the American Medical Association to draw attention to such rampant mistakes – they use the letters “EHR” as an initialism for “Errors Happen Regularly” – and to petition Congress for action. Ratwani is pushing for a central database to track such errors and adverse events.
Others have turned to social media to vent. Dr. Mark Friedberg, a health-policy researcher with the Rand Corp. who is also a practicing primary care physician, champions the Twitter hashtag #EHRbuglist to encourage fellow health care workers to air their pain points. And last month, a scathing Epic parody account cropped up on Twitter, earning more than 8,000 followers in its first five days. Its maiden tweet, written in the mock voice of an Epic overlord, read: “I once saw a doctor make eye contact with a patient. This horror must stop.”
As much as EHR systems are blamed for sins of commission, it is often the sins of omission that trip up users even more.
Consider the case of Lynne Chauvin, who worked as a medical assistant at Ochsner Health System, in Louisiana. In a still-pending 2015 lawsuit, Chauvin alleges that Epic’s software failed to fire a critical medication warning; Chauvin suffered from conditions that heightened her risk for blood clots, and though that history was documented in her records, she was treated with drugs that restricted blood flow after a heart procedure at the hospital. She developed gangrene, which led to the amputation of her lower legs and forearm. (Ochsner Health System said that while it cannot comment on ongoing litigation, it “remains committed to patient safety which we strongly believe is optimized through the use of electronic health record technology.” Epic declined to comment.)
Echoing the complaints of many doctors, the suit argues that Epic software “is extremely complicated to view and understand,” owing to “significant repetition of data.” Chauvin said that her medical bills have topped $1 million and that she is permanently disabled. Her husband, Richard, has become her primary caregiver and had to retire early from his job with the city of Kenner to care for his wife, according to the suit. Each party declined to comment.
An epidemic of burnout
The numbing repetition, the box-ticking and the endless searching on pulldown menus are all part of what Ratwani called the “cognitive burden” that’s wearing out today’s physicians and driving increasing numbers into early retirement.
In recent years, “physician burnout” has skyrocketed to the top of the agenda in medicine. A 2018 Merritt Hawkins survey found a staggering 78 percent of doctors suffered symptoms of burnout, and in January the Harvard School of Public Health and other institutions deemed it a “public health crisis.”
One of the co-authors of the Harvard study, Ashish Jha, pinned much of the blame on “the growth in poorly designed digital health records ... that [have] required that physicians spend more and more time on tasks that don’t directly benefit patients.”
Few would deny that the swift digitization of America’s medical system has been transformative. With EHRs now nearly universal, the face and feel of medicine has changed. The doctor is now typing away, making more eye contact with the computer screen, perhaps, than with the patient. Patients don’t like that dynamic; for doctors, whose days increasingly begin and end with such fleeting encounters, the effect can be downright deadening.
“You’re sitting in front of a patient, and there are so many things you have to do, and you only have so much time to do it in – seven to 11 minutes, probably – so when do you really listen?” asked John-Henry Pfifferling, a medical anthropologist who counsels physicians suffering from burnout. “If you go into medicine because you care about interacting, and then you’re just a tool, it’s dehumanizing,” said Pfifferling, who has seen many physicians leave medicine over the shift to electronic records. “It’s a disaster,” he said.
Beyond complicating the physician-patient relationship, EHRs have in some ways made practicing medicine harder, said Dr. Hal Baker, a physician and the chief information officer at WellSpan, a Pennsylvania hospital system. “Physicians have to cognitively switch between focusing on the record and focusing on the patient,” he said. He points out how unusual – and potentially dangerous – this is: “Texting while you’re driving is not a good idea. And I have yet to see the CEO who, while running a board meeting, takes minutes, and certainly I’ve never heard of a judge who, during the trial, would also be the court stenographer. But in medicine ... we’ve asked the physician to move from writing in pen to [entering a computer] record, and it’s a pretty complicated interface.”
Even if docs may be at the keyboard during visits, they report having to spend hours more outside that time – at lunch, late at night – in order to finish notes and keep up with electronic paperwork (sending referrals, corresponding with patients, resolving coding issues). That’s right. EHRs didn’t take away paperwork; the systems just moved it online. And there’s a lot of it: 44 percent of the roughly six hours a physician spends on the EHR each day is focused on clerical and administrative tasks, like billing and coding, according to a 2017 Annals of Family Medicine study.
For all that so-called pajama time – the average physician logs 1.4 hours per day on the EHR after work – they don’t get a cent.
Many doctors do recognize the value in the technology: 60 percent of participants in Stanford Medicine’s 2018 National Physician Poll said EHRs had led to improved patient care. At the same time, about as many (59 percent) said EHRs needed a “complete overhaul” and that the systems had detracted from their professional satisfaction (54 percent) as well as from their clinical effectiveness (49 percent).
In preliminary studies, Ratwani has found that doctors have a typical physiological reaction to using an EHR: stress. When he and his team shadow clinicians on the job, they use a range of sensors to monitor the doctors’ heart rate and other vital signs over the course of their shift. The physicians’ heart rates will spike – as high as 160 beats per minute – on two sorts of occasions: when they are interacting with patients and when they’re using the EHR.
4,000
Approximate number of computer clicks an ER doctor makes over the course of a single shift, according to an American Journal of Emergency Medicine study
“Everything is so cumbersome,” said Dr. Karla Dick, a family medicine physician in Arlington, Texas. “It’s slow compared to a paper chart. You’re having to click and zoom in and zoom out to look for stuff.” With all the zooming in and out, she explained, it’s easy to end up in the wrong record. “I can’t tell you how many times I’ve had to cancel an order because I was in the wrong chart.”
Among the daily frustrations for one emergency room physician in Rhode Island is ordering ibuprofen, a seemingly simple task that now requires many rounds of mouse clicking. Every time she prescribes the basic painkiller for a female patient, whether that patient is 9 or 68 years old, the prescription is blocked by a pop-up alert warning her that it may be dangerous to give the drug to a pregnant woman. The physician, whose institution does not allow her to comment on the systems, must then override the warning with yet more clicks. “That’s just the tiniest tip of the iceberg,” she said.
What worries the doctor most is the ease with which diligent, well-meaning physicians can make serious medical errors. She noted that the average ER doc will make 4,000 mouse clicks over the course of a shift, and that the odds of doing anything 4,000 times without an error is small. “The interfaces are just so confusing and clunky,” she added. “They invite error ... it’s not a negligence issue. This is a poor tool issue.”
Many of the EHR makers acknowledge physician burnout is real and say they’re doing what they can to lessen the burden and enhance user experience. Dr. Sam Butler, a pulmonary critical care specialist who started working at Epic in 2001, leads those efforts at the Wisconsin-based company. When doctors get more than 100 messages per week in their in-basket (akin to an email inbox), there’s a higher likelihood of burnout. Butler’s team has also analyzed doctors’ electronic notes – they’re twice as long as they were nine years ago, and three to four times as long as notes in the rest of the world. He said Epic uses such insights to improve the client experience. But coming up with fixes is difficult because doctors “have different viewpoints on everything,” he said. (KHN and Fortune made multiple requests to interview Epic CEO Judy Faulkner, but the company declined to make her available. In a trade interview in February, however, Faulkner said that EHRs were unfairly blamed for physician burnout and cited a study suggesting that there’s little correlation between burnout and EHR satisfaction. Executives at other vendors noted that they’re aware of usability issues and that they’re working on addressing them.)
“It’s not that we’re a bunch of Luddites who don’t know how to use technology,” said the Rhode Island ER doctor. “I have an iPhone and a computer and they work the way they’re supposed to work, and then we’re given these incredibly cumbersome and error-prone tools. This is something the government mandated. There really wasn’t the time to let the cream rise to the top; everyone had to jump in and pick something that worked and spend tens of millions of dollars on a system that is slowly killing us.”
$36 billion and change
The effort to digitize America’s health records got its biggest push in a very low moment: the financial crisis of 2008. In early December of that year, Obama, barely four weeks after his election, pitched an ambitious economic recovery plan. “We will make sure that every doctor’s office and hospital in this country is using cutting-edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes and help save billions of dollars each year,” he said in a radio address.
The idea had already been a fashionable one in Washington. Former House Speaker Newt Gingrich was fond of saying it was easier to track a FedEx package than one’s medical records. Obama’s predecessor, President George W. Bush, had also pursued the idea of wiring up the country’s health system. He didn’t commit much money, but Bush did create an agency to do the job: the Office of the National Coordinator (ONC).
In the depths of recession, the EHR conceit looked like a shovel-ready project that only the paper lobby could hate. In February 2009, legislators passed the HITECH Act, which carved out a hefty chunk of the massive stimulus package for health information technology. The goal was not just to get hospitals and doctors to buy EHRs, but rather to get them using them in a way that would drive better care. So lawmakers devised a carrot-and-stick approach: Physicians would qualify for federal subsidies (a sum of up to nearly $64,000 over a period of years) only if they were “meaningful users” of a government-certified system. Vendors, for their part, had to develop systems that met the government’s requirements.
They didn’t have much time, though. The need to stimulate the economy, which meant getting providers to adopt EHRs quickly, “presented a tremendous conundrum,” said Farzad Mostashari, who joined the ONC as deputy director in 2009 and became its leader in 2011: The ideal – creating a useful, interoperable, nationwide records system – was “utterly infeasible to get to in a short time frame.”
That didn’t stop the federal planners from pursuing their grand ambitions. Everyone had big ideas for the EHRs. The FDA wanted the systems to track unique device identifiers for medical implants, the Centers for Disease Control and Prevention wanted them to support disease surveillance, CMS wanted them to include quality metrics and so on. “We had all the right ideas that were discussed and hashed out by the committee,” said Mostashari, “but they were all of the right ideas.”
Not everyone agreed, though, that they were the right ideas. Before long, “meaningful use” became pejorative shorthand to many for a burdensome government program – making doctors do things like check a box indicating a patient’s smoking status each and every visit.
The EHR vendor community, then a scrappy $2 billion industry, griped at the litany of requirements but stood to gain so much from the government’s $36 billion injection that it jumped in line. As Rusty Frantz, CEO of EHR vendor NextGen Healthcare, put it: “The industry was like, ‘I’ve got this check dangling in front of me, and I have to check these boxes to get there, and so I’m going to do that.’”
Halamka, who was an enthusiastic backer of the initiative in both the Bush and Obama administrations, blames the pressure for a speedy launch as much as the excessive wish list. “To go from a regulation to a highly usable product that is in the hands of doctors in 18 months, that’s too fast,” he said. “It’s like asking nine women to have a baby in a month.”
Several of those who worked on the project admit the rollout was not as easy or seamless as they’d anticipated, but they contend that was never the point. Aneesh Chopra, appointed by Obama in 2009 as the nation’s first chief technology officer, called the spending a “down payment” on a vision to fundamentally change American medicine – creating a digital infrastructure to support new ways to pay for health services based on their quality and outcomes.
Dr. Bob Kocher, a physician and star investor with venture capital firm Venrock, who served in the Obama administration from 2009 to 2011 as a health and economic policy adviser, not only defends the rollout then but also disputes the notion that the government initiative has been a failure at all. “EHRs have totally lived up to the hype and expectations,” he said, emphasizing that they also serve as a technology foundation to support innovation on everything from patients accessing their medical records on a smartphone to AI-driven medical sleuthing. Others note the systems’ value in aggregating medical data in ways that were never possible with paper – helping, for example, to figure out that contaminated water was poisoning children in Flint, Mich.
But Rusty Frantz heard a far different message about EHRs – and, more important, it was coming from his own customers.
The Stanford-trained engineer, who in 2015 became CEO of NextGen, a $500-million-a-year EHR heavyweight in the physician-office market, learned the hard way about how his product was being viewed. As he stood at the podium at his first meeting with thousands of NextGen customers at Las Vegas’ Mandalay Bay Resort, just four months after getting the job, he told KHN and Fortune, “People were lining up at the microphones to yell at us: ‘We weren’t delivering stable software! The executive team was inaccessible! The service experience was terrible!’ ” (He now refers to the event as “Festivus: the airing of the grievances.”)
Frantz had bounced around the health care industry for much of his career, and from the nearby perch of a medical device company, he watched the EHR incentive bonanza with a mix of envy and slack-jawed awe. “The industry was moving along in a natural Darwinist way, and then along came the stimulus,” said Frantz, who blames the government’s ham-handed approach to regulation. “The software got slammed in, and the software wasn’t implemented in a way that supported care,” he said. “It was installed in a way that supported stimulus. This company, we were complicit in it, too.”
Even that may be a generous description. KHN and Fortune found a trail of lawsuits against the company, stretching from White Sulphur Springs, Mont., to Neillsville, Wis. Mary Rutan Hospital in Bellefontaine, Ohio, sued NextGen (formerly called Quality Systems) in federal court in 2013, arguing that it experienced hundreds of problems with the “materially defective” software the company had installed in 2011.
A consultant hired by the hospital to evaluate the NextGen system, whose 60-page report was submitted to the court, identified “many functional defects” that he said rendered the software “unfit for its intended purpose.” Some patient information was not accurately recorded, which had the potential, the consultant wrote, “to create major patient care risk which could lead to, at a minimum, inconvenience, and at worst, malpractice or even death.” Glitches at Mary Rutan included incidents in which the software would apparently change a patient’s gender at random or lose a doctor’s observations after an exam, the consultant reported. The company, he found, sometimes took months to address issues: One IT ticket, which related to a physician’s notes inexplicably deleting themselves, reportedly took 10 months to resolve. (The consultant also noted that similar problems appeared to be occurring at as many as a dozen other hospitals that had installed NextGen software.)
The Ohio hospital, which paid more than $1.5 million for its EHR system, claimed breach of contract. NextGen responded that it disputed the claims made in the lawsuit and that the matter was resolved in 2015 “with no findings of fact by a court related to the allegations.” The hospital declined to comment.
At the time, as it has been since then, NextGen’s software was certified by the government as meeting the requirements of the stimulus program. By 2016, NextGen had more than 19,000 customers who had received federal subsidies.
NextGen was subpoenaed by the Department of Justice in December 2017, months after becoming the subject of a federal investigation led by the District of Vermont. Frantz tells KHN and Fortune that NextGen is cooperating with the investigation. “This company was not dishonest, but it was not effective four years ago,” he said. Frantz also emphasized that NextGen has “rapidly evolved” during his tenure, earning five industry awards since 2017, and that customers have “responded very positively.”
Glen Tullman, who until 2012 led Allscripts, another leading EHR vendor that benefited royally from the stimulus and that has been sued by numerous unhappy customers, admitted that the industry’s race to market took priority over all else.
“It was a big distraction. That was an unintended consequence of that,” Tullman said. “All the companies were saying, This is a one-time opportunity to expand our share, focus everything there, and then we’ll go back and fix it.” The Justice Department has opened a civil investigation into the company, Securities and Exchange Commission filings show. Allscripts said in an email that it cannot comment on an ongoing investigation, but that the civil investigations by the Department of Justice relate to businesses it acquired after the investigations were opened.
Much of the marketing mayhem occurred because federal officials imposed few controls over firms scrambling to cash in on the stimulus. It was a gold rush – and any system, it seemed, could be marketed as “federally approved.” Doctors could shop for bargain-price software packages at Costco and Walmart’s Sam’s Club – where eClinicalWorks sold a “turnkey” system for $11,925 – and cash in on the government’s adoption incentives.
The top-shelf vendors in 2009 crisscrossed the country on a “stimulus tour” like rock groups, gigging at some 30 cities, where they offered doctors who showed up to hear the pitch “a customized analysis” of how much money they could earn off the government incentives. Following the same playbook used by pharmaceutical companies, EHR sellers courted doctors at fancy dinners in ritzy hotels. One enterprising software firm advertised a “cash for clunkers” deal that paid $3,000 to doctors willing to trade in their current records system for a new one. Athenahealth held “invitation only” dinners at luxury hotels to advise doctors, among other things, how to use the stimulus to get paid more and capture available incentives. Allscripts offered a no-money-down purchase plan to help doctors “maximize the return on your EHR investment.” (An Athenahealth spokesperson said the company’s “dinners were educational in nature and aimed at helping physicians navigate the government program.” Allscripts did not respond directly to questions about its marketing practices, but said it “is proud of the software and services [it provides] to hundreds of thousands of caregivers across the globe.”)
EHRs were supposed to reduce health care costs, at least in part by preventing duplicative tests. But as the federal government opened the stimulus tap, many raised doubts about the promised savings. Advocates bandied about a figure of $80 billion in cost savings even as congressional auditors were debunking it. While the jury’s still out, there’s growing suspicion the digital revolution may potentially raise health care costs by encouraging overbilling and new strains of fraud and abuse.
In September 2012, following press reports suggesting that some doctors and hospitals were using the new technology to improperly boost their fees, a practice known as “upcoding,” then-Health and Human Services chief Kathleen Sebelius and Attorney General Eric Holder warned the industry not to try to “game the system.”
There’s also growing evidence that some doctors and health systems may have overstated their use of the new technology to secure stimulus funds, a potentially enormous fraud against Medicare and Medicaid that likely will take many years to unravel. In June 2017, the HHS inspector general estimated that Medicare officials made more than $729 million in subsidy payments to hospitals and doctors that didn’t deserve them.
Individual states, which administer the Medicaid portion of the program, haven’t fared much better. Audits have uncovered overpayments in 14 of 17 state programs reviewed, totaling more than $66 million, according to inspector general reports.
Last month, Sen. Chuck Grassley, an Iowa Republican who chairs the Senate Finance Committee, sharply criticized CMS for recovering only a tiny fraction of these bogus payments, or what he termed a “spit in the ocean.”
EHR vendors have also been accused of egregious and patient-endangering acts of fraud as they raced to cash in on the stimulus money grab. In addition to the U.S. government’s $155 million False Claims Act settlement with eClinicalWorks noted above, the federal government has reached a second settlement over similar charges against another large vendor, Tampa-based Greenway Health. In February, that company settled with the government for just over $57 million without denying or admitting wrongdoing. “These are cases of corporate greed, companies that prioritized profits over everything else,” said Christina Nolan, the U.S. attorney for the District of Vermont, whose office led the cases. (In a response, Greenway Health did not address the charges or the settlement but said it was “committing itself to being the standard-bearer for quality, compliance, and transparency.”)
Tower of Babel
In early 2017, Seema Verma, then the country’s newly appointed CMS administrator, went on a listening tour. She visited doctors around the country, at big urban practices and tiny rural clinics, and from those front-line physicians she consistently heard one thing: They hated their electronic health records. “Physician burnout is real,” she told KHN and Fortune. The doctors spoke of the difficulty in getting information from other systems and providers, and they complained about the government’s reporting requirements, which they perceived as burdensome and not meaningful.
What she heard then became suddenly personal one summer day in 2017, when her husband, himself a physician, collapsed in the airport on his way home to Indianapolis after a family vacation. For a frantic few hours, the CMS administrator fielded phone calls from first responders and physicians – Did she know his medical history? Did she have information that could save his life? – and made calls to his doctors in Indiana, scrambling to piece together his record, which should have been there in one piece. Her husband survived the episode, but it laid bare the dysfunction and danger inherent in the existing health information ecosystem.
The notion that one EHR should talk to another was a key part of the original vision for the HITECH Act, with the government calling for systems to be eventually interoperable.
What the framers of that vision didn’t count on were the business incentives working against it. A free exchange of information means that patients can be treated anywhere. And though they may not admit it, many health providers are loath to lose their patients to a competing doctor’s office or hospital. There’s a term for that lost revenue: “leakage.” And keeping a tight hold on patients’ medical records is one way to prevent it.
There’s a ton of proprietary value in that data, said Blumenthal, who now heads the Commonwealth Fund, a philanthropy that does health research. Asking hospitals to give it up is “like asking Amazon to share their data with Walmart,” he said.
Blumenthal acknowledged that he failed to grasp these perverse business dynamics and foresee what a challenge getting the systems to talk to one another would be. He added that forcing interoperability goals early on, when 90 percent of the nation’s providers still didn’t have systems or data to exchange, seemed unrealistic. “We had an expression: They had to operate before they could interoperate,” he said.
In the absence of true incentives for systems to communicate, the industry limped along; some providers wired up directly to other select providers or through regional exchanges, but the efforts were spotty. A Cerner-backed interoperability network called CommonWell formed in 2013, but some companies, including dominant Epic, didn’t join. (“Initially, Epic was neither invited nor allowed to join,” said Sumit Rana, senior vice president of R&D at Epic. Jitin Asnaani, executive director of CommonWell countered, “We made repeated invitations to every major EHR ... and numerous public and private invitations to Epic.”)
Epic then supported a separate effort to do much the same.
Last spring, Verma attempted to kick-start the sharing effort and later pledged a war on “information blocking,” threatening penalties for bad actors. She has promised to reduce the documentation burden on physicians and end the gag clauses that protect the EHR industry. Regarding the first effort at least, “there was consensus that this needed to happen and that it would take the government to push this forward,” she said. In one sign of progress last summer, the dueling sharing initiatives of Epic and Cerner, the two largest players in the industry, began to share with each other – though the effort is fledgling.
When it comes to patients, though, the real sharing too often stops. Despite federal requirements that providers give patients their medical records in a timely fashion, in their chosen format and at low cost (the government recommends a flat fee of $6.50 or less), patients struggle mightily to get them. A 2017 study by researchers at Yale found that of America’s 83 top-rated hospitals, only 53 percent offer forms that provide patients with the option to receive their entire medical record. Fewer than half would share records via email. One hospital charged more than $500 to release them.
Sometimes the mere effort to access records leads to court. Jennifer De Angelis, a Tulsa attorney, has frequently sparred with hospitals over releasing her clients’ records. She said they either attempt to charge huge sums for them or force her to obtain a court order before releasing them. De Angelis added that she sometimes suspects the records have been overwritten to cover up medical mistakes.
Consider the case of 5-year-old Uriah R. Roach, who fractured and cut his finger on Oct. 2, 2014, when it was accidentally slammed in a door at school. Five days later, an operation to repair the damage went awry, and he suffered permanent brain damage, apparently owing to an anesthesia problem. The Epic electronic medical file had been accessed more than 76,000 times during the 22 days the boy was in the hospital, and a lawsuit brought by his parents contended that numerous entries had been “corrected, altered, modified and possibly deleted after an unexpected outcome during the induction of anesthesia.” The hospital denied wrongdoing. The case settled in November 2016, and the terms are confidential.
More than a dozen other attorneys interviewed cited similar problems, especially with gaining access to computerized “audit trails.” In several cases, court records show, government lawyers resisted turning over electronic files from federally run hospitals. That happened to Russell Uselton, an Oklahoma lawyer who represented a pregnant teen admitted to the Choctaw Nation Health Care Center in Talihina, Okla. Shelby Carshall, 18, was more than 40 weeks pregnant at the time. Doctors failed to perform a cesarean section, and her baby was born brain-damaged as a result, she alleged in a lawsuit filed in 2017 against the U.S. government. The baby began having seizures at 10 hours old and will “likely never walk, talk, eat, or otherwise live normally,” according to pleadings in the suit. Though the federal government requires hospitals to produce electronic health records to patients and their families, Uselton had to obtain a court order to get the baby’s complete medical files. Government lawyers denied any negligence in the case, which is pending.
“They try to hide anything from you that they can hide from you,” said Uselton. “They make it extremely difficult to get records, so expensive and hard that most lawyers can’t take it on,” he said.
Nor, it seems, can high-ranking federal officials. When Seema Verma’s husband was discharged from the hospital after his summer health scare, he was handed a few papers and a CD-ROM containing some medical images – but missing key tests and monitoring data. Said Verma, “We left that hospital and we still don’t have his information today.” That was nearly two years ago
Kaiser Health News is a nonprofit national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
Where electronic health records went wrong.
Where electronic health records went wrong.
The pain radiated from the top of Annette Monachelli’s head, and it got worse when she changed positions. It didn’t feel like her usual migraine. The 47-year-old Vermont attorney turned innkeeper visited her local doctor at the Stowe Family Practice twice about the problem in late November 2012, but got little relief.
Two months later, Monachelli was dead of an aneurysm, a condition that, despite the symptoms and the appointments, had never been tested for or diagnosed until she turned up in the emergency room days before her death.
Monachelli’s husband sued Stowe, the federally qualified health center the physician worked for. Owen Foster, a newly hired assistant U.S. attorney with the District of Vermont, was assigned to defend the government. Though it looked to be a standard medical malpractice case, Foster was on the cusp of discovering something much bigger – what his boss, U.S. Attorney Christina Nolan, calls the “frontier of health care fraud” – and prosecuting a first-of-its-kind case that landed the largest-ever financial recovery in Vermont’s history.
Foster began with Monachelli’s medical records, which offered a puzzle. Her doctor had considered the possibility of an aneurysm and, to rule it out, had ordered a head scan through the clinic’s software system, the government alleged in court filings. The test, in theory, would have caught the bleeding in Monachelli’s brain. But the order never made it to the lab; it had never been transmitted.
The software in question was an electronic health records system, or EHR, made by eClinicalWorks (eCW), one of the leading sellers of record-keeping software for physicians in America, currently used by 850,000 health professionals in the U.S. It didn’t take long for Foster to assemble a dossier of troubling reports – Better Business Bureau complaints, issues flagged on an eCW user board, and legal cases filed around the country – suggesting the company’s technology didn’t work quite the way it said it did.
Until this point, Foster, like most Americans, knew next to nothing about electronic medical records, but he was quickly amassing clues that eCW’s software had major problems – some of which put patients, like Annette Monachelli, at risk.
Damning evidence came from a whistleblower claim filed in 2011 against the company. Brendan Delaney, a British cop turned EHR expert, was hired in 2010 by New York City to work on the eCW implementation at Rikers Island, a jail complex that then had more than 100,000 inmates. But soon after he was hired, Delaney noticed scores of troubling problems with the system, which became the basis for his lawsuit. The patient medication lists weren’t reliable; prescribed drugs would not show up, while discontinued drugs would appear as current, according to the complaint. The EHR would sometimes display one patient’s medication profile accompanied by the physician’s note for a different patient, making it easy to misdiagnose or prescribe a drug to the wrong individual. Prescriptions, some 30,000 of them in 2010, lacked proper start and stop dates, introducing the opportunity for under- or overmedication. The eCW system did not reliably track lab results, concluded Delaney, who tallied 1,884 tests for which they had never gotten outcomes.
The District of Vermont launched an official federal investigation in 2015.
The eCW spaghetti code was so buggy that when one glitch got fixed, another would develop, the government found. The user interface offered a few ways to order a lab test or diagnostic image, for example, but not all of them seemed to function. The software would detect and warn users of dangerous drug interactions, but unbeknownst to physicians, the alerts stopped if the drug order was customized. “It would be like if I was driving with the radio on and the windshield wipers going and when I hit the turn signal, the brakes suddenly didn’t work,” said Foster.
The eCW system also failed to use the standard drug codes and, in some instances, lab and diagnosis codes as well, the government alleged.
The case never got to a jury. In May 2017, eCW paid a $155 million settlement to the government over alleged “false claims” and kickbacks – one physician made tens of thousands of dollars – to clients who promoted its product. Despite the record settlement, the company denied wrongdoing; eCW did not respond to numerous requests for comment.
If there is a kicker to this tale, it is this: The U.S. government bankrolled the adoption of this software – and continues to pay for it. Or we should say: You do.
Which brings us to the strange, sad, and aggravating story that unfolds below. It is not about one lawsuit or a piece of sloppy technology. Rather, it’s about a trouble-prone industry that intersects, in the most personal way, with every one of our lives. It’s about a $3.7 trillion health care system idling at the crossroads of progress. And it’s about a slew of unintended consequences – the surprising casualties of a big idea whose time had seemingly come.
The virtual magic bullet
Electronic health records were supposed to do a lot: make medicine safer, bring higher-quality care, empower patients, and yes, even save money. Boosters heralded an age when researchers could harness the big data within to reveal the most effective treatments for disease and sharply reduce medical errors. Patients, in turn, would have truly portable health records, being able to share their medical histories in a flash with doctors and hospitals anywhere in the country – essential when life-and-death decisions are being made in the ER.
But 10 years after President Barack Obama signed a law to accelerate the digitization of medical records – with the federal government, so far, sinking $36 billion into the effort – America has little to show for its investment. KHN and Fortune spoke with more than 100 physicians, patients, IT experts and administrators, health policy leaders, attorneys, top government officials and representatives at more than a half-dozen EHR vendors, including the CEOs of two of the companies. The interviews reveal a tragic missed opportunity: Rather than an electronic ecosystem of information, the nation’s thousands of EHRs largely remain a sprawling, disconnected patchwork. Moreover, the effort has handcuffed health providers to technology they mostly can’t stand and has enriched and empowered the $13-billion-a-year industry that sells it.
By one measure, certainly, the effort has achieved what it set out to do: Today, 96% of hospitals have adopted EHRs, up from just 9% in 2008. But on most other counts, the newly installed technology has fallen well short. Physicians complain about clumsy, unintuitive systems and the number of hours spent clicking, typing and trying to navigate them – which is more than the hours they spend with patients. Unlike, say, with the global network of ATMs, the proprietary EHR systems made by more than 700 vendors routinely don’t talk to one another, meaning that doctors still resort to transferring medical data via fax and CD-ROM. Patients, meanwhile, still struggle to access their own records – and, sometimes, just plain can’t.
Instead of reducing costs, many say, EHRs, which were originally optimized for billing rather than for patient care, have instead made it easier to engage in “upcoding” or bill inflation (though some say the systems also make such fraud easier to catch).
More gravely still, a months-long joint investigation by KHN and Fortune has found that instead of streamlining medicine, the government’s EHR initiative has created a host of largely unacknowledged patient safety risks. Our investigation found that alarming reports of patient deaths, serious injuries and near misses – thousands of them – tied to software glitches, user errors or other flaws have piled up, largely unseen, in various government-funded and private repositories.
Compounding the problem are entrenched secrecy policies that continue to keep software failures out of public view. EHR vendors often impose contractual “gag clauses” that discourage buyers from speaking out about safety issues and disastrous software installations – though some customers have taken to the courts to air their grievances. Plaintiffs, moreover, say hospitals often fight to withhold records from injured patients or their families. Indeed, two doctors who spoke candidly about the problems they faced with EHRs later asked that their names not be used, adding that they were forbidden by their health care organizations to talk. Says Assistant U.S. Attorney Foster, the EHR vendors “are protected by a shield of silence.”
Though the software has reduced some types of clinical mistakes common in the era of handwritten notes, Raj Ratwani, a researcher at MedStar Health in Washington, D.C., has documented new patterns of medical errors tied to EHRs that he believes are both perilous and preventable. “The fact that we’re not able to broadcast that nationally and solve these issues immediately, and that another patient somewhere else may be harmed by the very same issue – that just can’t happen,” he said.
David Blumenthal, who, as Obama’s national coordinator for health information technology, was one of the architects of the EHR initiative, acknowledged to KHN and Fortune that electronic health records “have not fulfilled their potential. I think few would argue they have.”
The former president has likewise singled out the effort as one of his most disappointing, bemoaning in a January 2017 interview with Vox “the fact that there are still just mountains of paperwork ... and the doctors still have to input stuff, and the nurses are spending all their time on all this administrative work. We put a big slug of money into trying to encourage everyone to digitalize, to catch up with the rest of the world ... that’s been harder than we expected.”
Seema Verma, the current chief of the Centers for Medicare & Medicaid Services (CMS), which oversees the EHR effort today, shudders at the billions of dollars spent building software that doesn’t share data – an electronic bridge to nowhere. “Providers developed their own systems that may or may not even have worked well for them,” she told KHN and Fortune in an interview last month, “but we didn’t think about how all these systems connect with one another. That was the real missing piece.”
Perhaps none of the initiative’s former boosters is quite as frustrated as former Vice President Joe Biden. At a 2017 meeting with health care leaders in Washington, he railed against the infuriating challenge of getting his son Beau’s medical records from one hospital to another. “I was stunned when my son for a year was battling stage 4 glioblastoma,” said Biden. “I couldn’t get his records. I’m the vice president of the United States of America. ... It was an absolute nightmare. It was ridiculous, absolutely ridiculous, that we’re in that circumstance.”
A bridge to nowhere
As Biden would tell you, the original concept was a smart one. The wave of digitization had swept up virtually every industry, bringing both disruption and, in most cases, greater efficiency. And perhaps none of these industries was more deserving of digital liberation than medicine, where life-measuring and potentially lifesaving data was locked away in paper crypts – stack upon stack of file folders at doctors’ offices across the country.
Stowed in steel cabinets, the records were next to useless. Nobody – particularly at the dawn of the age of the iPhone – thought it was a good idea to leave them that way. The problem, say critics, was in the way that policymakers set about to transform them.
“Every single idea was well-meaning and potentially of societal benefit, but the combined burden of all of them hitting clinicians simultaneously made office practice basically impossible,” said John Halamka, chief information officer at Beth Israel Deaconess Medical Center, who served on the EHR standards committees under both President George W. Bush and President Obama. “In America, we have 11 minutes to see a patient, and, you know, you’re going to be empathetic, make eye contact, enter about 100 pieces of data, and never commit malpractice. It’s not possible!”
KHN and Fortune examined more than two dozen medical negligence cases that have alleged that EHRs either contributed to injuries, had been improperly altered, or were withheld from patients to conceal substandard care. In such cases, the suits typically settle prior to trial with strict confidentiality pledges, so it’s often not possible to determine the merits of the allegations. EHR vendors also frequently have contract stipulations, known as “hold harmless clauses,” that protect them from liability if hospitals are later sued for medical errors – even if they relate to an issue with the technology.
But lawsuits, like that filed by Fabian Ronisky, which do emerge from this veil, are quite telling.
Ronisky, according to his complaint, arrived by ambulance at Providence Saint John’s Health Center in Santa Monica on the afternoon of March 2, 2015. For two days, the young lawyer had been suffering from severe headaches while a disorienting fever left him struggling to tell the 911 operator his address.
Suspecting meningitis, a doctor at the hospital performed a spinal tap, and the next day an infectious disease specialist typed in an order for a critical lab test – a check of the spinal fluid for viruses, including herpes simplex – into the hospital’s EHR.
The multimillion-dollar system, manufactured by Epic Systems Corp. and considered by some to be the Cadillac of medical software, had been installed at the hospital about four months earlier. Although the order appeared on Epic’s screen, it was not sent to the lab. It turned out, Epic’s software didn’t fully “interface” with the lab’s software, according to a lawsuit Ronisky filed in February 2017 in Los Angeles County Superior Court. His results and diagnosis were delayed – by days, he claimed – during which time he suffered irreversible brain damage from herpes encephalitis. The suit alleged the mishap delayed doctors from giving Ronisky a drug called acyclovir that might have minimized damage to his brain.
Epic denied any liability or defects in its software; the company said the doctor failed to push the right button to send the order and that the hospital, not Epic, had configured the interface with the lab. Epic, among the nation’s largest manufacturers of computerized health records and the leading provider to most of America’s most elite medical centers, quietly paid $1 million to settle the suit in July 2018, according to court records. The hospital and two doctors paid a total of $7.5 million, and a case against a third doctor is pending trial. Ronisky, 34, who is fighting to rebuild his life, declined to comment.
Incidents like that which happened to Ronisky – or to Annette Monachelli, for that matter – are surprisingly common, data show. And the back-and-forth about where the fault lies in such cases is actually part of the problem: The systems are often so confusing (and training on them seldom sufficient) that errors frequently fall into a nether zone of responsibility. It can be hard to tell where human error begins and the technological shortcomings end.
EHRs promised to put all of a patient’s records in one place, but often that’s the problem. Critical or time-sensitive information routinely gets buried in an endless scroll of data, where in the rush of medical decision-making – and amid the maze of pulldown menus – it can be missed.
Thirteen-year-old Brooke Dilliplaine, who was severely allergic to dairy, was given a probiotic containing milk. The two doses sent her into “complete respiratory distress” and resulted in a collapsed lung, according to a lawsuit filed by her mother. Rory Staunton, 12, scraped his arm in gym class and then died of sepsis after ER doctors discharged the boy on the basis of lab results in the EHR that weren’t complete. And then there’s the case of Thomas Eric Duncan. The 42-year-old man was sent home in 2014 from a Dallas hospital infected with Ebola virus. Though a nurse had entered in the EHR his recent travel to Liberia, where an Ebola epidemic was then in full swing, the doctor never saw it. Duncan died a week later.
Many such cases end up in court. Typically, doctors and nurses blame faulty technology in the medical-records systems. The EHR vendors blame human error. And meanwhile, the cases mount.
Quantros, a private health care analytics firm, said it has logged 18,000 EHR-related safety events from 2007 through 2018, 3 percent of which resulted in patient harm, including seven deaths – a figure that a Quantros director said is “drastically underreported.”
A 2016 study by The Leapfrog Group, a patient-safety watchdog based in Washington, D.C., found that the medication-ordering function of hospital EHRs – a feature required by the government for certification but often configured differently in each system – failed to flag potentially harmful drug orders in 39 percent of cases in a test simulation. In 13 percent of those cases, the mistake could have been fatal
The Pew Charitable Trusts has, for the past few years, run an EHR safety project, taking aim at issues like usability and patient matching – the process of linking the correct medical record to the correct patient – a seemingly basic task at which the systems, even when made by the same EHR vendor, often fail. At some institutions, according to Pew, such matching was accurate only 50 percent of the time. Patients have discovered mistakes as well: A January survey by the Kaiser Family Foundation found that 1 in 5 patients spotted an error in their electronic medical records. (Kaiser Health News is an editorially independent program of the foundation.)
The Joint Commission, which certifies hospitals, has sounded alarms about a number of issues, including false alarms – which account for between 85 and 99 percent of EHR and medical device alerts. (One study by researchers at Oregon Health & Science University estimated that the average clinician working in the intensive care unit may be exposed to up to 7,000 passive alerts per day.) Such over-warning can be dangerous. From 2014 to 2018, the commission tallied 170 mostly voluntary reports of patient harm related to alarm management and alert fatigue – the phenomenon in which health workers, so overloaded with unnecessary warnings, ignore the occasional meaningful one. Of those 170 incidents, 101 resulted in patient deaths.
The Pennsylvania Patient Safety Authority, an independent state agency that collects information about adverse events and incidents, counted 775 “laboratory-test problems” related to health IT from January 2016 to December 2017.
To be sure, medical errors happened en masse in the age of paper medicine, when hospital staffers misinterpreted a physician’s scrawl or read the wrong chart to deadly consequence, for instance. But what is perhaps telling is how many doctors today opt for manual workarounds to their EHRs. Aaron Zachary Hettinger, an emergency medicine physician with MedStar Health in Washington, D.C., said that when he and fellow clinicians need to share critical patient information, they write it on a whiteboard or on a paper towel and leave it on their colleagues’ computer keyboards.
While the Food and Drug Administration doesn’t mandate reporting of EHR safety events – as it does for regulated medical devices – concerned posts have nonetheless proliferated in the FDA MAUDE database of adverse events, which now serves as an ad hoc bulletin board of warnings about the various systems.
Further complicating the picture is that health providers nearly always tailor their one-size-fits-all EHR systems to their own specifications. Such customization makes every one unique and often hard to compare with others – which, in turn, makes the source of mistakes difficult to determine.
Dr. Martin Makary, a surgical oncologist at Johns Hopkins and the co-author of a much-cited 2016 study that identified medical errors as the third-leading cause of death in America, credits EHRs for some safety improvements – including recent changes that have helped put electronic brakes on the opioid epidemic. But, he said, “we’ve swapped one set of problems for another. We used to struggle with handwriting and missing information. We now struggle with a lack of visual cues to know we’re writing and ordering on the correct patient.”
Dr. Joseph Schneider, a pediatrician at UT Southwestern Medical Center, compares the transition we’ve made, from paper records to electronic ones, to moving from horses to automobiles. But in this analogy, he added, “our cars have advanced to about the 1960s. They still don’t have seat belts or air bags.”
Schneider recalled one episode when his colleagues couldn’t understand why chunks of their notes would inexplicably disappear. They figured out the problem weeks later after intense study: Physicians had been inputting squiggly brackets – {} – the use of which, unbeknownst to even vendor representatives, deleted the text between them. (The EHR maker initially blamed the doctors, said Schneider.)
A broad coalition of actors, from National Nurses United to the Texas Medical Association to leaders within the FDA, has long called for oversight on electronic-record safety issues. Among the most outspoken is Ratwani, who directs MedStar Health’s National Center on Human Factors in Healthcare, a 30-person institute focused on optimizing the safety and usability of medical technology. Ratwani spent his early career in the defense industry, studying things like the intuitiveness of information displays. When he got to MedStar in 2012, he was stunned by “the types of [digital] interfaces being used” in health care, he said.
In a study published last year in the journal Health Affairs, Ratwani and colleagues studied medication errors at three pediatric hospitals from 2012 to 2017. They discovered that 3,243 of them were owing in part to EHR “usability issues.” Roughly 1 in 5 of these could have resulted in patient harm, the researchers found. “Poor interface design and poor implementations can lead to errors and sometimes death, and that is just unbelievably bad as well as completely fixable,” he said. “We should not have patients harmed this way.”
Using eye-tracking technology, Ratwani has demonstrated on video just how easy it is to make mistakes when performing basic tasks on the nation’s two leading EHR systems. When emergency room doctors went to order Tylenol, for example, they saw a drop-down menu listing 86 options, many of which were irrelevant for the specified patient. They had to read the list carefully, so as not to click the wrong dosage or form – though many do that too: In roughly 1 out of 1,000 orders, physicians accidentally select the suppository (designated “PR”) rather than the tablet dose (“OR”), according to one estimate. That’s not an error that will harm a patient – though other medication mix-ups can and do.
Earlier this year, MedStar’s human-factors center launched a website and public awareness campaign with the American Medical Association to draw attention to such rampant mistakes – they use the letters “EHR” as an initialism for “Errors Happen Regularly” – and to petition Congress for action. Ratwani is pushing for a central database to track such errors and adverse events.
Others have turned to social media to vent. Dr. Mark Friedberg, a health-policy researcher with the Rand Corp. who is also a practicing primary care physician, champions the Twitter hashtag #EHRbuglist to encourage fellow health care workers to air their pain points. And last month, a scathing Epic parody account cropped up on Twitter, earning more than 8,000 followers in its first five days. Its maiden tweet, written in the mock voice of an Epic overlord, read: “I once saw a doctor make eye contact with a patient. This horror must stop.”
As much as EHR systems are blamed for sins of commission, it is often the sins of omission that trip up users even more.
Consider the case of Lynne Chauvin, who worked as a medical assistant at Ochsner Health System, in Louisiana. In a still-pending 2015 lawsuit, Chauvin alleges that Epic’s software failed to fire a critical medication warning; Chauvin suffered from conditions that heightened her risk for blood clots, and though that history was documented in her records, she was treated with drugs that restricted blood flow after a heart procedure at the hospital. She developed gangrene, which led to the amputation of her lower legs and forearm. (Ochsner Health System said that while it cannot comment on ongoing litigation, it “remains committed to patient safety which we strongly believe is optimized through the use of electronic health record technology.” Epic declined to comment.)
Echoing the complaints of many doctors, the suit argues that Epic software “is extremely complicated to view and understand,” owing to “significant repetition of data.” Chauvin said that her medical bills have topped $1 million and that she is permanently disabled. Her husband, Richard, has become her primary caregiver and had to retire early from his job with the city of Kenner to care for his wife, according to the suit. Each party declined to comment.
An epidemic of burnout
The numbing repetition, the box-ticking and the endless searching on pulldown menus are all part of what Ratwani called the “cognitive burden” that’s wearing out today’s physicians and driving increasing numbers into early retirement.
In recent years, “physician burnout” has skyrocketed to the top of the agenda in medicine. A 2018 Merritt Hawkins survey found a staggering 78 percent of doctors suffered symptoms of burnout, and in January the Harvard School of Public Health and other institutions deemed it a “public health crisis.”
One of the co-authors of the Harvard study, Ashish Jha, pinned much of the blame on “the growth in poorly designed digital health records ... that [have] required that physicians spend more and more time on tasks that don’t directly benefit patients.”
Few would deny that the swift digitization of America’s medical system has been transformative. With EHRs now nearly universal, the face and feel of medicine has changed. The doctor is now typing away, making more eye contact with the computer screen, perhaps, than with the patient. Patients don’t like that dynamic; for doctors, whose days increasingly begin and end with such fleeting encounters, the effect can be downright deadening.
“You’re sitting in front of a patient, and there are so many things you have to do, and you only have so much time to do it in – seven to 11 minutes, probably – so when do you really listen?” asked John-Henry Pfifferling, a medical anthropologist who counsels physicians suffering from burnout. “If you go into medicine because you care about interacting, and then you’re just a tool, it’s dehumanizing,” said Pfifferling, who has seen many physicians leave medicine over the shift to electronic records. “It’s a disaster,” he said.
Beyond complicating the physician-patient relationship, EHRs have in some ways made practicing medicine harder, said Dr. Hal Baker, a physician and the chief information officer at WellSpan, a Pennsylvania hospital system. “Physicians have to cognitively switch between focusing on the record and focusing on the patient,” he said. He points out how unusual – and potentially dangerous – this is: “Texting while you’re driving is not a good idea. And I have yet to see the CEO who, while running a board meeting, takes minutes, and certainly I’ve never heard of a judge who, during the trial, would also be the court stenographer. But in medicine ... we’ve asked the physician to move from writing in pen to [entering a computer] record, and it’s a pretty complicated interface.”
Even if docs may be at the keyboard during visits, they report having to spend hours more outside that time – at lunch, late at night – in order to finish notes and keep up with electronic paperwork (sending referrals, corresponding with patients, resolving coding issues). That’s right. EHRs didn’t take away paperwork; the systems just moved it online. And there’s a lot of it: 44 percent of the roughly six hours a physician spends on the EHR each day is focused on clerical and administrative tasks, like billing and coding, according to a 2017 Annals of Family Medicine study.
For all that so-called pajama time – the average physician logs 1.4 hours per day on the EHR after work – they don’t get a cent.
Many doctors do recognize the value in the technology: 60 percent of participants in Stanford Medicine’s 2018 National Physician Poll said EHRs had led to improved patient care. At the same time, about as many (59 percent) said EHRs needed a “complete overhaul” and that the systems had detracted from their professional satisfaction (54 percent) as well as from their clinical effectiveness (49 percent).
In preliminary studies, Ratwani has found that doctors have a typical physiological reaction to using an EHR: stress. When he and his team shadow clinicians on the job, they use a range of sensors to monitor the doctors’ heart rate and other vital signs over the course of their shift. The physicians’ heart rates will spike – as high as 160 beats per minute – on two sorts of occasions: when they are interacting with patients and when they’re using the EHR.
4,000
Approximate number of computer clicks an ER doctor makes over the course of a single shift, according to an American Journal of Emergency Medicine study
“Everything is so cumbersome,” said Dr. Karla Dick, a family medicine physician in Arlington, Texas. “It’s slow compared to a paper chart. You’re having to click and zoom in and zoom out to look for stuff.” With all the zooming in and out, she explained, it’s easy to end up in the wrong record. “I can’t tell you how many times I’ve had to cancel an order because I was in the wrong chart.”
Among the daily frustrations for one emergency room physician in Rhode Island is ordering ibuprofen, a seemingly simple task that now requires many rounds of mouse clicking. Every time she prescribes the basic painkiller for a female patient, whether that patient is 9 or 68 years old, the prescription is blocked by a pop-up alert warning her that it may be dangerous to give the drug to a pregnant woman. The physician, whose institution does not allow her to comment on the systems, must then override the warning with yet more clicks. “That’s just the tiniest tip of the iceberg,” she said.
What worries the doctor most is the ease with which diligent, well-meaning physicians can make serious medical errors. She noted that the average ER doc will make 4,000 mouse clicks over the course of a shift, and that the odds of doing anything 4,000 times without an error is small. “The interfaces are just so confusing and clunky,” she added. “They invite error ... it’s not a negligence issue. This is a poor tool issue.”
Many of the EHR makers acknowledge physician burnout is real and say they’re doing what they can to lessen the burden and enhance user experience. Dr. Sam Butler, a pulmonary critical care specialist who started working at Epic in 2001, leads those efforts at the Wisconsin-based company. When doctors get more than 100 messages per week in their in-basket (akin to an email inbox), there’s a higher likelihood of burnout. Butler’s team has also analyzed doctors’ electronic notes – they’re twice as long as they were nine years ago, and three to four times as long as notes in the rest of the world. He said Epic uses such insights to improve the client experience. But coming up with fixes is difficult because doctors “have different viewpoints on everything,” he said. (KHN and Fortune made multiple requests to interview Epic CEO Judy Faulkner, but the company declined to make her available. In a trade interview in February, however, Faulkner said that EHRs were unfairly blamed for physician burnout and cited a study suggesting that there’s little correlation between burnout and EHR satisfaction. Executives at other vendors noted that they’re aware of usability issues and that they’re working on addressing them.)
“It’s not that we’re a bunch of Luddites who don’t know how to use technology,” said the Rhode Island ER doctor. “I have an iPhone and a computer and they work the way they’re supposed to work, and then we’re given these incredibly cumbersome and error-prone tools. This is something the government mandated. There really wasn’t the time to let the cream rise to the top; everyone had to jump in and pick something that worked and spend tens of millions of dollars on a system that is slowly killing us.”
$36 billion and change
The effort to digitize America’s health records got its biggest push in a very low moment: the financial crisis of 2008. In early December of that year, Obama, barely four weeks after his election, pitched an ambitious economic recovery plan. “We will make sure that every doctor’s office and hospital in this country is using cutting-edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes and help save billions of dollars each year,” he said in a radio address.
The idea had already been a fashionable one in Washington. Former House Speaker Newt Gingrich was fond of saying it was easier to track a FedEx package than one’s medical records. Obama’s predecessor, President George W. Bush, had also pursued the idea of wiring up the country’s health system. He didn’t commit much money, but Bush did create an agency to do the job: the Office of the National Coordinator (ONC).
In the depths of recession, the EHR conceit looked like a shovel-ready project that only the paper lobby could hate. In February 2009, legislators passed the HITECH Act, which carved out a hefty chunk of the massive stimulus package for health information technology. The goal was not just to get hospitals and doctors to buy EHRs, but rather to get them using them in a way that would drive better care. So lawmakers devised a carrot-and-stick approach: Physicians would qualify for federal subsidies (a sum of up to nearly $64,000 over a period of years) only if they were “meaningful users” of a government-certified system. Vendors, for their part, had to develop systems that met the government’s requirements.
They didn’t have much time, though. The need to stimulate the economy, which meant getting providers to adopt EHRs quickly, “presented a tremendous conundrum,” said Farzad Mostashari, who joined the ONC as deputy director in 2009 and became its leader in 2011: The ideal – creating a useful, interoperable, nationwide records system – was “utterly infeasible to get to in a short time frame.”
That didn’t stop the federal planners from pursuing their grand ambitions. Everyone had big ideas for the EHRs. The FDA wanted the systems to track unique device identifiers for medical implants, the Centers for Disease Control and Prevention wanted them to support disease surveillance, CMS wanted them to include quality metrics and so on. “We had all the right ideas that were discussed and hashed out by the committee,” said Mostashari, “but they were all of the right ideas.”
Not everyone agreed, though, that they were the right ideas. Before long, “meaningful use” became pejorative shorthand to many for a burdensome government program – making doctors do things like check a box indicating a patient’s smoking status each and every visit.
The EHR vendor community, then a scrappy $2 billion industry, griped at the litany of requirements but stood to gain so much from the government’s $36 billion injection that it jumped in line. As Rusty Frantz, CEO of EHR vendor NextGen Healthcare, put it: “The industry was like, ‘I’ve got this check dangling in front of me, and I have to check these boxes to get there, and so I’m going to do that.’”
Halamka, who was an enthusiastic backer of the initiative in both the Bush and Obama administrations, blames the pressure for a speedy launch as much as the excessive wish list. “To go from a regulation to a highly usable product that is in the hands of doctors in 18 months, that’s too fast,” he said. “It’s like asking nine women to have a baby in a month.”
Several of those who worked on the project admit the rollout was not as easy or seamless as they’d anticipated, but they contend that was never the point. Aneesh Chopra, appointed by Obama in 2009 as the nation’s first chief technology officer, called the spending a “down payment” on a vision to fundamentally change American medicine – creating a digital infrastructure to support new ways to pay for health services based on their quality and outcomes.
Dr. Bob Kocher, a physician and star investor with venture capital firm Venrock, who served in the Obama administration from 2009 to 2011 as a health and economic policy adviser, not only defends the rollout then but also disputes the notion that the government initiative has been a failure at all. “EHRs have totally lived up to the hype and expectations,” he said, emphasizing that they also serve as a technology foundation to support innovation on everything from patients accessing their medical records on a smartphone to AI-driven medical sleuthing. Others note the systems’ value in aggregating medical data in ways that were never possible with paper – helping, for example, to figure out that contaminated water was poisoning children in Flint, Mich.
But Rusty Frantz heard a far different message about EHRs – and, more important, it was coming from his own customers.
The Stanford-trained engineer, who in 2015 became CEO of NextGen, a $500-million-a-year EHR heavyweight in the physician-office market, learned the hard way about how his product was being viewed. As he stood at the podium at his first meeting with thousands of NextGen customers at Las Vegas’ Mandalay Bay Resort, just four months after getting the job, he told KHN and Fortune, “People were lining up at the microphones to yell at us: ‘We weren’t delivering stable software! The executive team was inaccessible! The service experience was terrible!’ ” (He now refers to the event as “Festivus: the airing of the grievances.”)
Frantz had bounced around the health care industry for much of his career, and from the nearby perch of a medical device company, he watched the EHR incentive bonanza with a mix of envy and slack-jawed awe. “The industry was moving along in a natural Darwinist way, and then along came the stimulus,” said Frantz, who blames the government’s ham-handed approach to regulation. “The software got slammed in, and the software wasn’t implemented in a way that supported care,” he said. “It was installed in a way that supported stimulus. This company, we were complicit in it, too.”
Even that may be a generous description. KHN and Fortune found a trail of lawsuits against the company, stretching from White Sulphur Springs, Mont., to Neillsville, Wis. Mary Rutan Hospital in Bellefontaine, Ohio, sued NextGen (formerly called Quality Systems) in federal court in 2013, arguing that it experienced hundreds of problems with the “materially defective” software the company had installed in 2011.
A consultant hired by the hospital to evaluate the NextGen system, whose 60-page report was submitted to the court, identified “many functional defects” that he said rendered the software “unfit for its intended purpose.” Some patient information was not accurately recorded, which had the potential, the consultant wrote, “to create major patient care risk which could lead to, at a minimum, inconvenience, and at worst, malpractice or even death.” Glitches at Mary Rutan included incidents in which the software would apparently change a patient’s gender at random or lose a doctor’s observations after an exam, the consultant reported. The company, he found, sometimes took months to address issues: One IT ticket, which related to a physician’s notes inexplicably deleting themselves, reportedly took 10 months to resolve. (The consultant also noted that similar problems appeared to be occurring at as many as a dozen other hospitals that had installed NextGen software.)
The Ohio hospital, which paid more than $1.5 million for its EHR system, claimed breach of contract. NextGen responded that it disputed the claims made in the lawsuit and that the matter was resolved in 2015 “with no findings of fact by a court related to the allegations.” The hospital declined to comment.
At the time, as it has been since then, NextGen’s software was certified by the government as meeting the requirements of the stimulus program. By 2016, NextGen had more than 19,000 customers who had received federal subsidies.
NextGen was subpoenaed by the Department of Justice in December 2017, months after becoming the subject of a federal investigation led by the District of Vermont. Frantz tells KHN and Fortune that NextGen is cooperating with the investigation. “This company was not dishonest, but it was not effective four years ago,” he said. Frantz also emphasized that NextGen has “rapidly evolved” during his tenure, earning five industry awards since 2017, and that customers have “responded very positively.”
Glen Tullman, who until 2012 led Allscripts, another leading EHR vendor that benefited royally from the stimulus and that has been sued by numerous unhappy customers, admitted that the industry’s race to market took priority over all else.
“It was a big distraction. That was an unintended consequence of that,” Tullman said. “All the companies were saying, This is a one-time opportunity to expand our share, focus everything there, and then we’ll go back and fix it.” The Justice Department has opened a civil investigation into the company, Securities and Exchange Commission filings show. Allscripts said in an email that it cannot comment on an ongoing investigation, but that the civil investigations by the Department of Justice relate to businesses it acquired after the investigations were opened.
Much of the marketing mayhem occurred because federal officials imposed few controls over firms scrambling to cash in on the stimulus. It was a gold rush – and any system, it seemed, could be marketed as “federally approved.” Doctors could shop for bargain-price software packages at Costco and Walmart’s Sam’s Club – where eClinicalWorks sold a “turnkey” system for $11,925 – and cash in on the government’s adoption incentives.
The top-shelf vendors in 2009 crisscrossed the country on a “stimulus tour” like rock groups, gigging at some 30 cities, where they offered doctors who showed up to hear the pitch “a customized analysis” of how much money they could earn off the government incentives. Following the same playbook used by pharmaceutical companies, EHR sellers courted doctors at fancy dinners in ritzy hotels. One enterprising software firm advertised a “cash for clunkers” deal that paid $3,000 to doctors willing to trade in their current records system for a new one. Athenahealth held “invitation only” dinners at luxury hotels to advise doctors, among other things, how to use the stimulus to get paid more and capture available incentives. Allscripts offered a no-money-down purchase plan to help doctors “maximize the return on your EHR investment.” (An Athenahealth spokesperson said the company’s “dinners were educational in nature and aimed at helping physicians navigate the government program.” Allscripts did not respond directly to questions about its marketing practices, but said it “is proud of the software and services [it provides] to hundreds of thousands of caregivers across the globe.”)
EHRs were supposed to reduce health care costs, at least in part by preventing duplicative tests. But as the federal government opened the stimulus tap, many raised doubts about the promised savings. Advocates bandied about a figure of $80 billion in cost savings even as congressional auditors were debunking it. While the jury’s still out, there’s growing suspicion the digital revolution may potentially raise health care costs by encouraging overbilling and new strains of fraud and abuse.
In September 2012, following press reports suggesting that some doctors and hospitals were using the new technology to improperly boost their fees, a practice known as “upcoding,” then-Health and Human Services chief Kathleen Sebelius and Attorney General Eric Holder warned the industry not to try to “game the system.”
There’s also growing evidence that some doctors and health systems may have overstated their use of the new technology to secure stimulus funds, a potentially enormous fraud against Medicare and Medicaid that likely will take many years to unravel. In June 2017, the HHS inspector general estimated that Medicare officials made more than $729 million in subsidy payments to hospitals and doctors that didn’t deserve them.
Individual states, which administer the Medicaid portion of the program, haven’t fared much better. Audits have uncovered overpayments in 14 of 17 state programs reviewed, totaling more than $66 million, according to inspector general reports.
Last month, Sen. Chuck Grassley, an Iowa Republican who chairs the Senate Finance Committee, sharply criticized CMS for recovering only a tiny fraction of these bogus payments, or what he termed a “spit in the ocean.”
EHR vendors have also been accused of egregious and patient-endangering acts of fraud as they raced to cash in on the stimulus money grab. In addition to the U.S. government’s $155 million False Claims Act settlement with eClinicalWorks noted above, the federal government has reached a second settlement over similar charges against another large vendor, Tampa-based Greenway Health. In February, that company settled with the government for just over $57 million without denying or admitting wrongdoing. “These are cases of corporate greed, companies that prioritized profits over everything else,” said Christina Nolan, the U.S. attorney for the District of Vermont, whose office led the cases. (In a response, Greenway Health did not address the charges or the settlement but said it was “committing itself to being the standard-bearer for quality, compliance, and transparency.”)
Tower of Babel
In early 2017, Seema Verma, then the country’s newly appointed CMS administrator, went on a listening tour. She visited doctors around the country, at big urban practices and tiny rural clinics, and from those front-line physicians she consistently heard one thing: They hated their electronic health records. “Physician burnout is real,” she told KHN and Fortune. The doctors spoke of the difficulty in getting information from other systems and providers, and they complained about the government’s reporting requirements, which they perceived as burdensome and not meaningful.
What she heard then became suddenly personal one summer day in 2017, when her husband, himself a physician, collapsed in the airport on his way home to Indianapolis after a family vacation. For a frantic few hours, the CMS administrator fielded phone calls from first responders and physicians – Did she know his medical history? Did she have information that could save his life? – and made calls to his doctors in Indiana, scrambling to piece together his record, which should have been there in one piece. Her husband survived the episode, but it laid bare the dysfunction and danger inherent in the existing health information ecosystem.
The notion that one EHR should talk to another was a key part of the original vision for the HITECH Act, with the government calling for systems to be eventually interoperable.
What the framers of that vision didn’t count on were the business incentives working against it. A free exchange of information means that patients can be treated anywhere. And though they may not admit it, many health providers are loath to lose their patients to a competing doctor’s office or hospital. There’s a term for that lost revenue: “leakage.” And keeping a tight hold on patients’ medical records is one way to prevent it.
There’s a ton of proprietary value in that data, said Blumenthal, who now heads the Commonwealth Fund, a philanthropy that does health research. Asking hospitals to give it up is “like asking Amazon to share their data with Walmart,” he said.
Blumenthal acknowledged that he failed to grasp these perverse business dynamics and foresee what a challenge getting the systems to talk to one another would be. He added that forcing interoperability goals early on, when 90 percent of the nation’s providers still didn’t have systems or data to exchange, seemed unrealistic. “We had an expression: They had to operate before they could interoperate,” he said.
In the absence of true incentives for systems to communicate, the industry limped along; some providers wired up directly to other select providers or through regional exchanges, but the efforts were spotty. A Cerner-backed interoperability network called CommonWell formed in 2013, but some companies, including dominant Epic, didn’t join. (“Initially, Epic was neither invited nor allowed to join,” said Sumit Rana, senior vice president of R&D at Epic. Jitin Asnaani, executive director of CommonWell countered, “We made repeated invitations to every major EHR ... and numerous public and private invitations to Epic.”)
Epic then supported a separate effort to do much the same.
Last spring, Verma attempted to kick-start the sharing effort and later pledged a war on “information blocking,” threatening penalties for bad actors. She has promised to reduce the documentation burden on physicians and end the gag clauses that protect the EHR industry. Regarding the first effort at least, “there was consensus that this needed to happen and that it would take the government to push this forward,” she said. In one sign of progress last summer, the dueling sharing initiatives of Epic and Cerner, the two largest players in the industry, began to share with each other – though the effort is fledgling.
When it comes to patients, though, the real sharing too often stops. Despite federal requirements that providers give patients their medical records in a timely fashion, in their chosen format and at low cost (the government recommends a flat fee of $6.50 or less), patients struggle mightily to get them. A 2017 study by researchers at Yale found that of America’s 83 top-rated hospitals, only 53 percent offer forms that provide patients with the option to receive their entire medical record. Fewer than half would share records via email. One hospital charged more than $500 to release them.
Sometimes the mere effort to access records leads to court. Jennifer De Angelis, a Tulsa attorney, has frequently sparred with hospitals over releasing her clients’ records. She said they either attempt to charge huge sums for them or force her to obtain a court order before releasing them. De Angelis added that she sometimes suspects the records have been overwritten to cover up medical mistakes.
Consider the case of 5-year-old Uriah R. Roach, who fractured and cut his finger on Oct. 2, 2014, when it was accidentally slammed in a door at school. Five days later, an operation to repair the damage went awry, and he suffered permanent brain damage, apparently owing to an anesthesia problem. The Epic electronic medical file had been accessed more than 76,000 times during the 22 days the boy was in the hospital, and a lawsuit brought by his parents contended that numerous entries had been “corrected, altered, modified and possibly deleted after an unexpected outcome during the induction of anesthesia.” The hospital denied wrongdoing. The case settled in November 2016, and the terms are confidential.
More than a dozen other attorneys interviewed cited similar problems, especially with gaining access to computerized “audit trails.” In several cases, court records show, government lawyers resisted turning over electronic files from federally run hospitals. That happened to Russell Uselton, an Oklahoma lawyer who represented a pregnant teen admitted to the Choctaw Nation Health Care Center in Talihina, Okla. Shelby Carshall, 18, was more than 40 weeks pregnant at the time. Doctors failed to perform a cesarean section, and her baby was born brain-damaged as a result, she alleged in a lawsuit filed in 2017 against the U.S. government. The baby began having seizures at 10 hours old and will “likely never walk, talk, eat, or otherwise live normally,” according to pleadings in the suit. Though the federal government requires hospitals to produce electronic health records to patients and their families, Uselton had to obtain a court order to get the baby’s complete medical files. Government lawyers denied any negligence in the case, which is pending.
“They try to hide anything from you that they can hide from you,” said Uselton. “They make it extremely difficult to get records, so expensive and hard that most lawyers can’t take it on,” he said.
Nor, it seems, can high-ranking federal officials. When Seema Verma’s husband was discharged from the hospital after his summer health scare, he was handed a few papers and a CD-ROM containing some medical images – but missing key tests and monitoring data. Said Verma, “We left that hospital and we still don’t have his information today.” That was nearly two years ago
Kaiser Health News is a nonprofit national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
The pain radiated from the top of Annette Monachelli’s head, and it got worse when she changed positions. It didn’t feel like her usual migraine. The 47-year-old Vermont attorney turned innkeeper visited her local doctor at the Stowe Family Practice twice about the problem in late November 2012, but got little relief.
Two months later, Monachelli was dead of an aneurysm, a condition that, despite the symptoms and the appointments, had never been tested for or diagnosed until she turned up in the emergency room days before her death.
Monachelli’s husband sued Stowe, the federally qualified health center the physician worked for. Owen Foster, a newly hired assistant U.S. attorney with the District of Vermont, was assigned to defend the government. Though it looked to be a standard medical malpractice case, Foster was on the cusp of discovering something much bigger – what his boss, U.S. Attorney Christina Nolan, calls the “frontier of health care fraud” – and prosecuting a first-of-its-kind case that landed the largest-ever financial recovery in Vermont’s history.
Foster began with Monachelli’s medical records, which offered a puzzle. Her doctor had considered the possibility of an aneurysm and, to rule it out, had ordered a head scan through the clinic’s software system, the government alleged in court filings. The test, in theory, would have caught the bleeding in Monachelli’s brain. But the order never made it to the lab; it had never been transmitted.
The software in question was an electronic health records system, or EHR, made by eClinicalWorks (eCW), one of the leading sellers of record-keeping software for physicians in America, currently used by 850,000 health professionals in the U.S. It didn’t take long for Foster to assemble a dossier of troubling reports – Better Business Bureau complaints, issues flagged on an eCW user board, and legal cases filed around the country – suggesting the company’s technology didn’t work quite the way it said it did.
Until this point, Foster, like most Americans, knew next to nothing about electronic medical records, but he was quickly amassing clues that eCW’s software had major problems – some of which put patients, like Annette Monachelli, at risk.
Damning evidence came from a whistleblower claim filed in 2011 against the company. Brendan Delaney, a British cop turned EHR expert, was hired in 2010 by New York City to work on the eCW implementation at Rikers Island, a jail complex that then had more than 100,000 inmates. But soon after he was hired, Delaney noticed scores of troubling problems with the system, which became the basis for his lawsuit. The patient medication lists weren’t reliable; prescribed drugs would not show up, while discontinued drugs would appear as current, according to the complaint. The EHR would sometimes display one patient’s medication profile accompanied by the physician’s note for a different patient, making it easy to misdiagnose or prescribe a drug to the wrong individual. Prescriptions, some 30,000 of them in 2010, lacked proper start and stop dates, introducing the opportunity for under- or overmedication. The eCW system did not reliably track lab results, concluded Delaney, who tallied 1,884 tests for which they had never gotten outcomes.
The District of Vermont launched an official federal investigation in 2015.
The eCW spaghetti code was so buggy that when one glitch got fixed, another would develop, the government found. The user interface offered a few ways to order a lab test or diagnostic image, for example, but not all of them seemed to function. The software would detect and warn users of dangerous drug interactions, but unbeknownst to physicians, the alerts stopped if the drug order was customized. “It would be like if I was driving with the radio on and the windshield wipers going and when I hit the turn signal, the brakes suddenly didn’t work,” said Foster.
The eCW system also failed to use the standard drug codes and, in some instances, lab and diagnosis codes as well, the government alleged.
The case never got to a jury. In May 2017, eCW paid a $155 million settlement to the government over alleged “false claims” and kickbacks – one physician made tens of thousands of dollars – to clients who promoted its product. Despite the record settlement, the company denied wrongdoing; eCW did not respond to numerous requests for comment.
If there is a kicker to this tale, it is this: The U.S. government bankrolled the adoption of this software – and continues to pay for it. Or we should say: You do.
Which brings us to the strange, sad, and aggravating story that unfolds below. It is not about one lawsuit or a piece of sloppy technology. Rather, it’s about a trouble-prone industry that intersects, in the most personal way, with every one of our lives. It’s about a $3.7 trillion health care system idling at the crossroads of progress. And it’s about a slew of unintended consequences – the surprising casualties of a big idea whose time had seemingly come.
The virtual magic bullet
Electronic health records were supposed to do a lot: make medicine safer, bring higher-quality care, empower patients, and yes, even save money. Boosters heralded an age when researchers could harness the big data within to reveal the most effective treatments for disease and sharply reduce medical errors. Patients, in turn, would have truly portable health records, being able to share their medical histories in a flash with doctors and hospitals anywhere in the country – essential when life-and-death decisions are being made in the ER.
But 10 years after President Barack Obama signed a law to accelerate the digitization of medical records – with the federal government, so far, sinking $36 billion into the effort – America has little to show for its investment. KHN and Fortune spoke with more than 100 physicians, patients, IT experts and administrators, health policy leaders, attorneys, top government officials and representatives at more than a half-dozen EHR vendors, including the CEOs of two of the companies. The interviews reveal a tragic missed opportunity: Rather than an electronic ecosystem of information, the nation’s thousands of EHRs largely remain a sprawling, disconnected patchwork. Moreover, the effort has handcuffed health providers to technology they mostly can’t stand and has enriched and empowered the $13-billion-a-year industry that sells it.
By one measure, certainly, the effort has achieved what it set out to do: Today, 96% of hospitals have adopted EHRs, up from just 9% in 2008. But on most other counts, the newly installed technology has fallen well short. Physicians complain about clumsy, unintuitive systems and the number of hours spent clicking, typing and trying to navigate them – which is more than the hours they spend with patients. Unlike, say, with the global network of ATMs, the proprietary EHR systems made by more than 700 vendors routinely don’t talk to one another, meaning that doctors still resort to transferring medical data via fax and CD-ROM. Patients, meanwhile, still struggle to access their own records – and, sometimes, just plain can’t.
Instead of reducing costs, many say, EHRs, which were originally optimized for billing rather than for patient care, have instead made it easier to engage in “upcoding” or bill inflation (though some say the systems also make such fraud easier to catch).
More gravely still, a months-long joint investigation by KHN and Fortune has found that instead of streamlining medicine, the government’s EHR initiative has created a host of largely unacknowledged patient safety risks. Our investigation found that alarming reports of patient deaths, serious injuries and near misses – thousands of them – tied to software glitches, user errors or other flaws have piled up, largely unseen, in various government-funded and private repositories.
Compounding the problem are entrenched secrecy policies that continue to keep software failures out of public view. EHR vendors often impose contractual “gag clauses” that discourage buyers from speaking out about safety issues and disastrous software installations – though some customers have taken to the courts to air their grievances. Plaintiffs, moreover, say hospitals often fight to withhold records from injured patients or their families. Indeed, two doctors who spoke candidly about the problems they faced with EHRs later asked that their names not be used, adding that they were forbidden by their health care organizations to talk. Says Assistant U.S. Attorney Foster, the EHR vendors “are protected by a shield of silence.”
Though the software has reduced some types of clinical mistakes common in the era of handwritten notes, Raj Ratwani, a researcher at MedStar Health in Washington, D.C., has documented new patterns of medical errors tied to EHRs that he believes are both perilous and preventable. “The fact that we’re not able to broadcast that nationally and solve these issues immediately, and that another patient somewhere else may be harmed by the very same issue – that just can’t happen,” he said.
David Blumenthal, who, as Obama’s national coordinator for health information technology, was one of the architects of the EHR initiative, acknowledged to KHN and Fortune that electronic health records “have not fulfilled their potential. I think few would argue they have.”
The former president has likewise singled out the effort as one of his most disappointing, bemoaning in a January 2017 interview with Vox “the fact that there are still just mountains of paperwork ... and the doctors still have to input stuff, and the nurses are spending all their time on all this administrative work. We put a big slug of money into trying to encourage everyone to digitalize, to catch up with the rest of the world ... that’s been harder than we expected.”
Seema Verma, the current chief of the Centers for Medicare & Medicaid Services (CMS), which oversees the EHR effort today, shudders at the billions of dollars spent building software that doesn’t share data – an electronic bridge to nowhere. “Providers developed their own systems that may or may not even have worked well for them,” she told KHN and Fortune in an interview last month, “but we didn’t think about how all these systems connect with one another. That was the real missing piece.”
Perhaps none of the initiative’s former boosters is quite as frustrated as former Vice President Joe Biden. At a 2017 meeting with health care leaders in Washington, he railed against the infuriating challenge of getting his son Beau’s medical records from one hospital to another. “I was stunned when my son for a year was battling stage 4 glioblastoma,” said Biden. “I couldn’t get his records. I’m the vice president of the United States of America. ... It was an absolute nightmare. It was ridiculous, absolutely ridiculous, that we’re in that circumstance.”
A bridge to nowhere
As Biden would tell you, the original concept was a smart one. The wave of digitization had swept up virtually every industry, bringing both disruption and, in most cases, greater efficiency. And perhaps none of these industries was more deserving of digital liberation than medicine, where life-measuring and potentially lifesaving data was locked away in paper crypts – stack upon stack of file folders at doctors’ offices across the country.
Stowed in steel cabinets, the records were next to useless. Nobody – particularly at the dawn of the age of the iPhone – thought it was a good idea to leave them that way. The problem, say critics, was in the way that policymakers set about to transform them.
“Every single idea was well-meaning and potentially of societal benefit, but the combined burden of all of them hitting clinicians simultaneously made office practice basically impossible,” said John Halamka, chief information officer at Beth Israel Deaconess Medical Center, who served on the EHR standards committees under both President George W. Bush and President Obama. “In America, we have 11 minutes to see a patient, and, you know, you’re going to be empathetic, make eye contact, enter about 100 pieces of data, and never commit malpractice. It’s not possible!”
KHN and Fortune examined more than two dozen medical negligence cases that have alleged that EHRs either contributed to injuries, had been improperly altered, or were withheld from patients to conceal substandard care. In such cases, the suits typically settle prior to trial with strict confidentiality pledges, so it’s often not possible to determine the merits of the allegations. EHR vendors also frequently have contract stipulations, known as “hold harmless clauses,” that protect them from liability if hospitals are later sued for medical errors – even if they relate to an issue with the technology.
But lawsuits, like that filed by Fabian Ronisky, which do emerge from this veil, are quite telling.
Ronisky, according to his complaint, arrived by ambulance at Providence Saint John’s Health Center in Santa Monica on the afternoon of March 2, 2015. For two days, the young lawyer had been suffering from severe headaches while a disorienting fever left him struggling to tell the 911 operator his address.
Suspecting meningitis, a doctor at the hospital performed a spinal tap, and the next day an infectious disease specialist typed in an order for a critical lab test – a check of the spinal fluid for viruses, including herpes simplex – into the hospital’s EHR.
The multimillion-dollar system, manufactured by Epic Systems Corp. and considered by some to be the Cadillac of medical software, had been installed at the hospital about four months earlier. Although the order appeared on Epic’s screen, it was not sent to the lab. It turned out, Epic’s software didn’t fully “interface” with the lab’s software, according to a lawsuit Ronisky filed in February 2017 in Los Angeles County Superior Court. His results and diagnosis were delayed – by days, he claimed – during which time he suffered irreversible brain damage from herpes encephalitis. The suit alleged the mishap delayed doctors from giving Ronisky a drug called acyclovir that might have minimized damage to his brain.
Epic denied any liability or defects in its software; the company said the doctor failed to push the right button to send the order and that the hospital, not Epic, had configured the interface with the lab. Epic, among the nation’s largest manufacturers of computerized health records and the leading provider to most of America’s most elite medical centers, quietly paid $1 million to settle the suit in July 2018, according to court records. The hospital and two doctors paid a total of $7.5 million, and a case against a third doctor is pending trial. Ronisky, 34, who is fighting to rebuild his life, declined to comment.
Incidents like that which happened to Ronisky – or to Annette Monachelli, for that matter – are surprisingly common, data show. And the back-and-forth about where the fault lies in such cases is actually part of the problem: The systems are often so confusing (and training on them seldom sufficient) that errors frequently fall into a nether zone of responsibility. It can be hard to tell where human error begins and the technological shortcomings end.
EHRs promised to put all of a patient’s records in one place, but often that’s the problem. Critical or time-sensitive information routinely gets buried in an endless scroll of data, where in the rush of medical decision-making – and amid the maze of pulldown menus – it can be missed.
Thirteen-year-old Brooke Dilliplaine, who was severely allergic to dairy, was given a probiotic containing milk. The two doses sent her into “complete respiratory distress” and resulted in a collapsed lung, according to a lawsuit filed by her mother. Rory Staunton, 12, scraped his arm in gym class and then died of sepsis after ER doctors discharged the boy on the basis of lab results in the EHR that weren’t complete. And then there’s the case of Thomas Eric Duncan. The 42-year-old man was sent home in 2014 from a Dallas hospital infected with Ebola virus. Though a nurse had entered in the EHR his recent travel to Liberia, where an Ebola epidemic was then in full swing, the doctor never saw it. Duncan died a week later.
Many such cases end up in court. Typically, doctors and nurses blame faulty technology in the medical-records systems. The EHR vendors blame human error. And meanwhile, the cases mount.
Quantros, a private health care analytics firm, said it has logged 18,000 EHR-related safety events from 2007 through 2018, 3 percent of which resulted in patient harm, including seven deaths – a figure that a Quantros director said is “drastically underreported.”
A 2016 study by The Leapfrog Group, a patient-safety watchdog based in Washington, D.C., found that the medication-ordering function of hospital EHRs – a feature required by the government for certification but often configured differently in each system – failed to flag potentially harmful drug orders in 39 percent of cases in a test simulation. In 13 percent of those cases, the mistake could have been fatal
The Pew Charitable Trusts has, for the past few years, run an EHR safety project, taking aim at issues like usability and patient matching – the process of linking the correct medical record to the correct patient – a seemingly basic task at which the systems, even when made by the same EHR vendor, often fail. At some institutions, according to Pew, such matching was accurate only 50 percent of the time. Patients have discovered mistakes as well: A January survey by the Kaiser Family Foundation found that 1 in 5 patients spotted an error in their electronic medical records. (Kaiser Health News is an editorially independent program of the foundation.)
The Joint Commission, which certifies hospitals, has sounded alarms about a number of issues, including false alarms – which account for between 85 and 99 percent of EHR and medical device alerts. (One study by researchers at Oregon Health & Science University estimated that the average clinician working in the intensive care unit may be exposed to up to 7,000 passive alerts per day.) Such over-warning can be dangerous. From 2014 to 2018, the commission tallied 170 mostly voluntary reports of patient harm related to alarm management and alert fatigue – the phenomenon in which health workers, so overloaded with unnecessary warnings, ignore the occasional meaningful one. Of those 170 incidents, 101 resulted in patient deaths.
The Pennsylvania Patient Safety Authority, an independent state agency that collects information about adverse events and incidents, counted 775 “laboratory-test problems” related to health IT from January 2016 to December 2017.
To be sure, medical errors happened en masse in the age of paper medicine, when hospital staffers misinterpreted a physician’s scrawl or read the wrong chart to deadly consequence, for instance. But what is perhaps telling is how many doctors today opt for manual workarounds to their EHRs. Aaron Zachary Hettinger, an emergency medicine physician with MedStar Health in Washington, D.C., said that when he and fellow clinicians need to share critical patient information, they write it on a whiteboard or on a paper towel and leave it on their colleagues’ computer keyboards.
While the Food and Drug Administration doesn’t mandate reporting of EHR safety events – as it does for regulated medical devices – concerned posts have nonetheless proliferated in the FDA MAUDE database of adverse events, which now serves as an ad hoc bulletin board of warnings about the various systems.
Further complicating the picture is that health providers nearly always tailor their one-size-fits-all EHR systems to their own specifications. Such customization makes every one unique and often hard to compare with others – which, in turn, makes the source of mistakes difficult to determine.
Dr. Martin Makary, a surgical oncologist at Johns Hopkins and the co-author of a much-cited 2016 study that identified medical errors as the third-leading cause of death in America, credits EHRs for some safety improvements – including recent changes that have helped put electronic brakes on the opioid epidemic. But, he said, “we’ve swapped one set of problems for another. We used to struggle with handwriting and missing information. We now struggle with a lack of visual cues to know we’re writing and ordering on the correct patient.”
Dr. Joseph Schneider, a pediatrician at UT Southwestern Medical Center, compares the transition we’ve made, from paper records to electronic ones, to moving from horses to automobiles. But in this analogy, he added, “our cars have advanced to about the 1960s. They still don’t have seat belts or air bags.”
Schneider recalled one episode when his colleagues couldn’t understand why chunks of their notes would inexplicably disappear. They figured out the problem weeks later after intense study: Physicians had been inputting squiggly brackets – {} – the use of which, unbeknownst to even vendor representatives, deleted the text between them. (The EHR maker initially blamed the doctors, said Schneider.)
A broad coalition of actors, from National Nurses United to the Texas Medical Association to leaders within the FDA, has long called for oversight on electronic-record safety issues. Among the most outspoken is Ratwani, who directs MedStar Health’s National Center on Human Factors in Healthcare, a 30-person institute focused on optimizing the safety and usability of medical technology. Ratwani spent his early career in the defense industry, studying things like the intuitiveness of information displays. When he got to MedStar in 2012, he was stunned by “the types of [digital] interfaces being used” in health care, he said.
In a study published last year in the journal Health Affairs, Ratwani and colleagues studied medication errors at three pediatric hospitals from 2012 to 2017. They discovered that 3,243 of them were owing in part to EHR “usability issues.” Roughly 1 in 5 of these could have resulted in patient harm, the researchers found. “Poor interface design and poor implementations can lead to errors and sometimes death, and that is just unbelievably bad as well as completely fixable,” he said. “We should not have patients harmed this way.”
Using eye-tracking technology, Ratwani has demonstrated on video just how easy it is to make mistakes when performing basic tasks on the nation’s two leading EHR systems. When emergency room doctors went to order Tylenol, for example, they saw a drop-down menu listing 86 options, many of which were irrelevant for the specified patient. They had to read the list carefully, so as not to click the wrong dosage or form – though many do that too: In roughly 1 out of 1,000 orders, physicians accidentally select the suppository (designated “PR”) rather than the tablet dose (“OR”), according to one estimate. That’s not an error that will harm a patient – though other medication mix-ups can and do.
Earlier this year, MedStar’s human-factors center launched a website and public awareness campaign with the American Medical Association to draw attention to such rampant mistakes – they use the letters “EHR” as an initialism for “Errors Happen Regularly” – and to petition Congress for action. Ratwani is pushing for a central database to track such errors and adverse events.
Others have turned to social media to vent. Dr. Mark Friedberg, a health-policy researcher with the Rand Corp. who is also a practicing primary care physician, champions the Twitter hashtag #EHRbuglist to encourage fellow health care workers to air their pain points. And last month, a scathing Epic parody account cropped up on Twitter, earning more than 8,000 followers in its first five days. Its maiden tweet, written in the mock voice of an Epic overlord, read: “I once saw a doctor make eye contact with a patient. This horror must stop.”
As much as EHR systems are blamed for sins of commission, it is often the sins of omission that trip up users even more.
Consider the case of Lynne Chauvin, who worked as a medical assistant at Ochsner Health System, in Louisiana. In a still-pending 2015 lawsuit, Chauvin alleges that Epic’s software failed to fire a critical medication warning; Chauvin suffered from conditions that heightened her risk for blood clots, and though that history was documented in her records, she was treated with drugs that restricted blood flow after a heart procedure at the hospital. She developed gangrene, which led to the amputation of her lower legs and forearm. (Ochsner Health System said that while it cannot comment on ongoing litigation, it “remains committed to patient safety which we strongly believe is optimized through the use of electronic health record technology.” Epic declined to comment.)
Echoing the complaints of many doctors, the suit argues that Epic software “is extremely complicated to view and understand,” owing to “significant repetition of data.” Chauvin said that her medical bills have topped $1 million and that she is permanently disabled. Her husband, Richard, has become her primary caregiver and had to retire early from his job with the city of Kenner to care for his wife, according to the suit. Each party declined to comment.
An epidemic of burnout
The numbing repetition, the box-ticking and the endless searching on pulldown menus are all part of what Ratwani called the “cognitive burden” that’s wearing out today’s physicians and driving increasing numbers into early retirement.
In recent years, “physician burnout” has skyrocketed to the top of the agenda in medicine. A 2018 Merritt Hawkins survey found a staggering 78 percent of doctors suffered symptoms of burnout, and in January the Harvard School of Public Health and other institutions deemed it a “public health crisis.”
One of the co-authors of the Harvard study, Ashish Jha, pinned much of the blame on “the growth in poorly designed digital health records ... that [have] required that physicians spend more and more time on tasks that don’t directly benefit patients.”
Few would deny that the swift digitization of America’s medical system has been transformative. With EHRs now nearly universal, the face and feel of medicine has changed. The doctor is now typing away, making more eye contact with the computer screen, perhaps, than with the patient. Patients don’t like that dynamic; for doctors, whose days increasingly begin and end with such fleeting encounters, the effect can be downright deadening.
“You’re sitting in front of a patient, and there are so many things you have to do, and you only have so much time to do it in – seven to 11 minutes, probably – so when do you really listen?” asked John-Henry Pfifferling, a medical anthropologist who counsels physicians suffering from burnout. “If you go into medicine because you care about interacting, and then you’re just a tool, it’s dehumanizing,” said Pfifferling, who has seen many physicians leave medicine over the shift to electronic records. “It’s a disaster,” he said.
Beyond complicating the physician-patient relationship, EHRs have in some ways made practicing medicine harder, said Dr. Hal Baker, a physician and the chief information officer at WellSpan, a Pennsylvania hospital system. “Physicians have to cognitively switch between focusing on the record and focusing on the patient,” he said. He points out how unusual – and potentially dangerous – this is: “Texting while you’re driving is not a good idea. And I have yet to see the CEO who, while running a board meeting, takes minutes, and certainly I’ve never heard of a judge who, during the trial, would also be the court stenographer. But in medicine ... we’ve asked the physician to move from writing in pen to [entering a computer] record, and it’s a pretty complicated interface.”
Even if docs may be at the keyboard during visits, they report having to spend hours more outside that time – at lunch, late at night – in order to finish notes and keep up with electronic paperwork (sending referrals, corresponding with patients, resolving coding issues). That’s right. EHRs didn’t take away paperwork; the systems just moved it online. And there’s a lot of it: 44 percent of the roughly six hours a physician spends on the EHR each day is focused on clerical and administrative tasks, like billing and coding, according to a 2017 Annals of Family Medicine study.
For all that so-called pajama time – the average physician logs 1.4 hours per day on the EHR after work – they don’t get a cent.
Many doctors do recognize the value in the technology: 60 percent of participants in Stanford Medicine’s 2018 National Physician Poll said EHRs had led to improved patient care. At the same time, about as many (59 percent) said EHRs needed a “complete overhaul” and that the systems had detracted from their professional satisfaction (54 percent) as well as from their clinical effectiveness (49 percent).
In preliminary studies, Ratwani has found that doctors have a typical physiological reaction to using an EHR: stress. When he and his team shadow clinicians on the job, they use a range of sensors to monitor the doctors’ heart rate and other vital signs over the course of their shift. The physicians’ heart rates will spike – as high as 160 beats per minute – on two sorts of occasions: when they are interacting with patients and when they’re using the EHR.
4,000
Approximate number of computer clicks an ER doctor makes over the course of a single shift, according to an American Journal of Emergency Medicine study
“Everything is so cumbersome,” said Dr. Karla Dick, a family medicine physician in Arlington, Texas. “It’s slow compared to a paper chart. You’re having to click and zoom in and zoom out to look for stuff.” With all the zooming in and out, she explained, it’s easy to end up in the wrong record. “I can’t tell you how many times I’ve had to cancel an order because I was in the wrong chart.”
Among the daily frustrations for one emergency room physician in Rhode Island is ordering ibuprofen, a seemingly simple task that now requires many rounds of mouse clicking. Every time she prescribes the basic painkiller for a female patient, whether that patient is 9 or 68 years old, the prescription is blocked by a pop-up alert warning her that it may be dangerous to give the drug to a pregnant woman. The physician, whose institution does not allow her to comment on the systems, must then override the warning with yet more clicks. “That’s just the tiniest tip of the iceberg,” she said.
What worries the doctor most is the ease with which diligent, well-meaning physicians can make serious medical errors. She noted that the average ER doc will make 4,000 mouse clicks over the course of a shift, and that the odds of doing anything 4,000 times without an error is small. “The interfaces are just so confusing and clunky,” she added. “They invite error ... it’s not a negligence issue. This is a poor tool issue.”
Many of the EHR makers acknowledge physician burnout is real and say they’re doing what they can to lessen the burden and enhance user experience. Dr. Sam Butler, a pulmonary critical care specialist who started working at Epic in 2001, leads those efforts at the Wisconsin-based company. When doctors get more than 100 messages per week in their in-basket (akin to an email inbox), there’s a higher likelihood of burnout. Butler’s team has also analyzed doctors’ electronic notes – they’re twice as long as they were nine years ago, and three to four times as long as notes in the rest of the world. He said Epic uses such insights to improve the client experience. But coming up with fixes is difficult because doctors “have different viewpoints on everything,” he said. (KHN and Fortune made multiple requests to interview Epic CEO Judy Faulkner, but the company declined to make her available. In a trade interview in February, however, Faulkner said that EHRs were unfairly blamed for physician burnout and cited a study suggesting that there’s little correlation between burnout and EHR satisfaction. Executives at other vendors noted that they’re aware of usability issues and that they’re working on addressing them.)
“It’s not that we’re a bunch of Luddites who don’t know how to use technology,” said the Rhode Island ER doctor. “I have an iPhone and a computer and they work the way they’re supposed to work, and then we’re given these incredibly cumbersome and error-prone tools. This is something the government mandated. There really wasn’t the time to let the cream rise to the top; everyone had to jump in and pick something that worked and spend tens of millions of dollars on a system that is slowly killing us.”
$36 billion and change
The effort to digitize America’s health records got its biggest push in a very low moment: the financial crisis of 2008. In early December of that year, Obama, barely four weeks after his election, pitched an ambitious economic recovery plan. “We will make sure that every doctor’s office and hospital in this country is using cutting-edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes and help save billions of dollars each year,” he said in a radio address.
The idea had already been a fashionable one in Washington. Former House Speaker Newt Gingrich was fond of saying it was easier to track a FedEx package than one’s medical records. Obama’s predecessor, President George W. Bush, had also pursued the idea of wiring up the country’s health system. He didn’t commit much money, but Bush did create an agency to do the job: the Office of the National Coordinator (ONC).
In the depths of recession, the EHR conceit looked like a shovel-ready project that only the paper lobby could hate. In February 2009, legislators passed the HITECH Act, which carved out a hefty chunk of the massive stimulus package for health information technology. The goal was not just to get hospitals and doctors to buy EHRs, but rather to get them using them in a way that would drive better care. So lawmakers devised a carrot-and-stick approach: Physicians would qualify for federal subsidies (a sum of up to nearly $64,000 over a period of years) only if they were “meaningful users” of a government-certified system. Vendors, for their part, had to develop systems that met the government’s requirements.
They didn’t have much time, though. The need to stimulate the economy, which meant getting providers to adopt EHRs quickly, “presented a tremendous conundrum,” said Farzad Mostashari, who joined the ONC as deputy director in 2009 and became its leader in 2011: The ideal – creating a useful, interoperable, nationwide records system – was “utterly infeasible to get to in a short time frame.”
That didn’t stop the federal planners from pursuing their grand ambitions. Everyone had big ideas for the EHRs. The FDA wanted the systems to track unique device identifiers for medical implants, the Centers for Disease Control and Prevention wanted them to support disease surveillance, CMS wanted them to include quality metrics and so on. “We had all the right ideas that were discussed and hashed out by the committee,” said Mostashari, “but they were all of the right ideas.”
Not everyone agreed, though, that they were the right ideas. Before long, “meaningful use” became pejorative shorthand to many for a burdensome government program – making doctors do things like check a box indicating a patient’s smoking status each and every visit.
The EHR vendor community, then a scrappy $2 billion industry, griped at the litany of requirements but stood to gain so much from the government’s $36 billion injection that it jumped in line. As Rusty Frantz, CEO of EHR vendor NextGen Healthcare, put it: “The industry was like, ‘I’ve got this check dangling in front of me, and I have to check these boxes to get there, and so I’m going to do that.’”
Halamka, who was an enthusiastic backer of the initiative in both the Bush and Obama administrations, blames the pressure for a speedy launch as much as the excessive wish list. “To go from a regulation to a highly usable product that is in the hands of doctors in 18 months, that’s too fast,” he said. “It’s like asking nine women to have a baby in a month.”
Several of those who worked on the project admit the rollout was not as easy or seamless as they’d anticipated, but they contend that was never the point. Aneesh Chopra, appointed by Obama in 2009 as the nation’s first chief technology officer, called the spending a “down payment” on a vision to fundamentally change American medicine – creating a digital infrastructure to support new ways to pay for health services based on their quality and outcomes.
Dr. Bob Kocher, a physician and star investor with venture capital firm Venrock, who served in the Obama administration from 2009 to 2011 as a health and economic policy adviser, not only defends the rollout then but also disputes the notion that the government initiative has been a failure at all. “EHRs have totally lived up to the hype and expectations,” he said, emphasizing that they also serve as a technology foundation to support innovation on everything from patients accessing their medical records on a smartphone to AI-driven medical sleuthing. Others note the systems’ value in aggregating medical data in ways that were never possible with paper – helping, for example, to figure out that contaminated water was poisoning children in Flint, Mich.
But Rusty Frantz heard a far different message about EHRs – and, more important, it was coming from his own customers.
The Stanford-trained engineer, who in 2015 became CEO of NextGen, a $500-million-a-year EHR heavyweight in the physician-office market, learned the hard way about how his product was being viewed. As he stood at the podium at his first meeting with thousands of NextGen customers at Las Vegas’ Mandalay Bay Resort, just four months after getting the job, he told KHN and Fortune, “People were lining up at the microphones to yell at us: ‘We weren’t delivering stable software! The executive team was inaccessible! The service experience was terrible!’ ” (He now refers to the event as “Festivus: the airing of the grievances.”)
Frantz had bounced around the health care industry for much of his career, and from the nearby perch of a medical device company, he watched the EHR incentive bonanza with a mix of envy and slack-jawed awe. “The industry was moving along in a natural Darwinist way, and then along came the stimulus,” said Frantz, who blames the government’s ham-handed approach to regulation. “The software got slammed in, and the software wasn’t implemented in a way that supported care,” he said. “It was installed in a way that supported stimulus. This company, we were complicit in it, too.”
Even that may be a generous description. KHN and Fortune found a trail of lawsuits against the company, stretching from White Sulphur Springs, Mont., to Neillsville, Wis. Mary Rutan Hospital in Bellefontaine, Ohio, sued NextGen (formerly called Quality Systems) in federal court in 2013, arguing that it experienced hundreds of problems with the “materially defective” software the company had installed in 2011.
A consultant hired by the hospital to evaluate the NextGen system, whose 60-page report was submitted to the court, identified “many functional defects” that he said rendered the software “unfit for its intended purpose.” Some patient information was not accurately recorded, which had the potential, the consultant wrote, “to create major patient care risk which could lead to, at a minimum, inconvenience, and at worst, malpractice or even death.” Glitches at Mary Rutan included incidents in which the software would apparently change a patient’s gender at random or lose a doctor’s observations after an exam, the consultant reported. The company, he found, sometimes took months to address issues: One IT ticket, which related to a physician’s notes inexplicably deleting themselves, reportedly took 10 months to resolve. (The consultant also noted that similar problems appeared to be occurring at as many as a dozen other hospitals that had installed NextGen software.)
The Ohio hospital, which paid more than $1.5 million for its EHR system, claimed breach of contract. NextGen responded that it disputed the claims made in the lawsuit and that the matter was resolved in 2015 “with no findings of fact by a court related to the allegations.” The hospital declined to comment.
At the time, as it has been since then, NextGen’s software was certified by the government as meeting the requirements of the stimulus program. By 2016, NextGen had more than 19,000 customers who had received federal subsidies.
NextGen was subpoenaed by the Department of Justice in December 2017, months after becoming the subject of a federal investigation led by the District of Vermont. Frantz tells KHN and Fortune that NextGen is cooperating with the investigation. “This company was not dishonest, but it was not effective four years ago,” he said. Frantz also emphasized that NextGen has “rapidly evolved” during his tenure, earning five industry awards since 2017, and that customers have “responded very positively.”
Glen Tullman, who until 2012 led Allscripts, another leading EHR vendor that benefited royally from the stimulus and that has been sued by numerous unhappy customers, admitted that the industry’s race to market took priority over all else.
“It was a big distraction. That was an unintended consequence of that,” Tullman said. “All the companies were saying, This is a one-time opportunity to expand our share, focus everything there, and then we’ll go back and fix it.” The Justice Department has opened a civil investigation into the company, Securities and Exchange Commission filings show. Allscripts said in an email that it cannot comment on an ongoing investigation, but that the civil investigations by the Department of Justice relate to businesses it acquired after the investigations were opened.
Much of the marketing mayhem occurred because federal officials imposed few controls over firms scrambling to cash in on the stimulus. It was a gold rush – and any system, it seemed, could be marketed as “federally approved.” Doctors could shop for bargain-price software packages at Costco and Walmart’s Sam’s Club – where eClinicalWorks sold a “turnkey” system for $11,925 – and cash in on the government’s adoption incentives.
The top-shelf vendors in 2009 crisscrossed the country on a “stimulus tour” like rock groups, gigging at some 30 cities, where they offered doctors who showed up to hear the pitch “a customized analysis” of how much money they could earn off the government incentives. Following the same playbook used by pharmaceutical companies, EHR sellers courted doctors at fancy dinners in ritzy hotels. One enterprising software firm advertised a “cash for clunkers” deal that paid $3,000 to doctors willing to trade in their current records system for a new one. Athenahealth held “invitation only” dinners at luxury hotels to advise doctors, among other things, how to use the stimulus to get paid more and capture available incentives. Allscripts offered a no-money-down purchase plan to help doctors “maximize the return on your EHR investment.” (An Athenahealth spokesperson said the company’s “dinners were educational in nature and aimed at helping physicians navigate the government program.” Allscripts did not respond directly to questions about its marketing practices, but said it “is proud of the software and services [it provides] to hundreds of thousands of caregivers across the globe.”)
EHRs were supposed to reduce health care costs, at least in part by preventing duplicative tests. But as the federal government opened the stimulus tap, many raised doubts about the promised savings. Advocates bandied about a figure of $80 billion in cost savings even as congressional auditors were debunking it. While the jury’s still out, there’s growing suspicion the digital revolution may potentially raise health care costs by encouraging overbilling and new strains of fraud and abuse.
In September 2012, following press reports suggesting that some doctors and hospitals were using the new technology to improperly boost their fees, a practice known as “upcoding,” then-Health and Human Services chief Kathleen Sebelius and Attorney General Eric Holder warned the industry not to try to “game the system.”
There’s also growing evidence that some doctors and health systems may have overstated their use of the new technology to secure stimulus funds, a potentially enormous fraud against Medicare and Medicaid that likely will take many years to unravel. In June 2017, the HHS inspector general estimated that Medicare officials made more than $729 million in subsidy payments to hospitals and doctors that didn’t deserve them.
Individual states, which administer the Medicaid portion of the program, haven’t fared much better. Audits have uncovered overpayments in 14 of 17 state programs reviewed, totaling more than $66 million, according to inspector general reports.
Last month, Sen. Chuck Grassley, an Iowa Republican who chairs the Senate Finance Committee, sharply criticized CMS for recovering only a tiny fraction of these bogus payments, or what he termed a “spit in the ocean.”
EHR vendors have also been accused of egregious and patient-endangering acts of fraud as they raced to cash in on the stimulus money grab. In addition to the U.S. government’s $155 million False Claims Act settlement with eClinicalWorks noted above, the federal government has reached a second settlement over similar charges against another large vendor, Tampa-based Greenway Health. In February, that company settled with the government for just over $57 million without denying or admitting wrongdoing. “These are cases of corporate greed, companies that prioritized profits over everything else,” said Christina Nolan, the U.S. attorney for the District of Vermont, whose office led the cases. (In a response, Greenway Health did not address the charges or the settlement but said it was “committing itself to being the standard-bearer for quality, compliance, and transparency.”)
Tower of Babel
In early 2017, Seema Verma, then the country’s newly appointed CMS administrator, went on a listening tour. She visited doctors around the country, at big urban practices and tiny rural clinics, and from those front-line physicians she consistently heard one thing: They hated their electronic health records. “Physician burnout is real,” she told KHN and Fortune. The doctors spoke of the difficulty in getting information from other systems and providers, and they complained about the government’s reporting requirements, which they perceived as burdensome and not meaningful.
What she heard then became suddenly personal one summer day in 2017, when her husband, himself a physician, collapsed in the airport on his way home to Indianapolis after a family vacation. For a frantic few hours, the CMS administrator fielded phone calls from first responders and physicians – Did she know his medical history? Did she have information that could save his life? – and made calls to his doctors in Indiana, scrambling to piece together his record, which should have been there in one piece. Her husband survived the episode, but it laid bare the dysfunction and danger inherent in the existing health information ecosystem.
The notion that one EHR should talk to another was a key part of the original vision for the HITECH Act, with the government calling for systems to be eventually interoperable.
What the framers of that vision didn’t count on were the business incentives working against it. A free exchange of information means that patients can be treated anywhere. And though they may not admit it, many health providers are loath to lose their patients to a competing doctor’s office or hospital. There’s a term for that lost revenue: “leakage.” And keeping a tight hold on patients’ medical records is one way to prevent it.
There’s a ton of proprietary value in that data, said Blumenthal, who now heads the Commonwealth Fund, a philanthropy that does health research. Asking hospitals to give it up is “like asking Amazon to share their data with Walmart,” he said.
Blumenthal acknowledged that he failed to grasp these perverse business dynamics and foresee what a challenge getting the systems to talk to one another would be. He added that forcing interoperability goals early on, when 90 percent of the nation’s providers still didn’t have systems or data to exchange, seemed unrealistic. “We had an expression: They had to operate before they could interoperate,” he said.
In the absence of true incentives for systems to communicate, the industry limped along; some providers wired up directly to other select providers or through regional exchanges, but the efforts were spotty. A Cerner-backed interoperability network called CommonWell formed in 2013, but some companies, including dominant Epic, didn’t join. (“Initially, Epic was neither invited nor allowed to join,” said Sumit Rana, senior vice president of R&D at Epic. Jitin Asnaani, executive director of CommonWell countered, “We made repeated invitations to every major EHR ... and numerous public and private invitations to Epic.”)
Epic then supported a separate effort to do much the same.
Last spring, Verma attempted to kick-start the sharing effort and later pledged a war on “information blocking,” threatening penalties for bad actors. She has promised to reduce the documentation burden on physicians and end the gag clauses that protect the EHR industry. Regarding the first effort at least, “there was consensus that this needed to happen and that it would take the government to push this forward,” she said. In one sign of progress last summer, the dueling sharing initiatives of Epic and Cerner, the two largest players in the industry, began to share with each other – though the effort is fledgling.
When it comes to patients, though, the real sharing too often stops. Despite federal requirements that providers give patients their medical records in a timely fashion, in their chosen format and at low cost (the government recommends a flat fee of $6.50 or less), patients struggle mightily to get them. A 2017 study by researchers at Yale found that of America’s 83 top-rated hospitals, only 53 percent offer forms that provide patients with the option to receive their entire medical record. Fewer than half would share records via email. One hospital charged more than $500 to release them.
Sometimes the mere effort to access records leads to court. Jennifer De Angelis, a Tulsa attorney, has frequently sparred with hospitals over releasing her clients’ records. She said they either attempt to charge huge sums for them or force her to obtain a court order before releasing them. De Angelis added that she sometimes suspects the records have been overwritten to cover up medical mistakes.
Consider the case of 5-year-old Uriah R. Roach, who fractured and cut his finger on Oct. 2, 2014, when it was accidentally slammed in a door at school. Five days later, an operation to repair the damage went awry, and he suffered permanent brain damage, apparently owing to an anesthesia problem. The Epic electronic medical file had been accessed more than 76,000 times during the 22 days the boy was in the hospital, and a lawsuit brought by his parents contended that numerous entries had been “corrected, altered, modified and possibly deleted after an unexpected outcome during the induction of anesthesia.” The hospital denied wrongdoing. The case settled in November 2016, and the terms are confidential.
More than a dozen other attorneys interviewed cited similar problems, especially with gaining access to computerized “audit trails.” In several cases, court records show, government lawyers resisted turning over electronic files from federally run hospitals. That happened to Russell Uselton, an Oklahoma lawyer who represented a pregnant teen admitted to the Choctaw Nation Health Care Center in Talihina, Okla. Shelby Carshall, 18, was more than 40 weeks pregnant at the time. Doctors failed to perform a cesarean section, and her baby was born brain-damaged as a result, she alleged in a lawsuit filed in 2017 against the U.S. government. The baby began having seizures at 10 hours old and will “likely never walk, talk, eat, or otherwise live normally,” according to pleadings in the suit. Though the federal government requires hospitals to produce electronic health records to patients and their families, Uselton had to obtain a court order to get the baby’s complete medical files. Government lawyers denied any negligence in the case, which is pending.
“They try to hide anything from you that they can hide from you,” said Uselton. “They make it extremely difficult to get records, so expensive and hard that most lawyers can’t take it on,” he said.
Nor, it seems, can high-ranking federal officials. When Seema Verma’s husband was discharged from the hospital after his summer health scare, he was handed a few papers and a CD-ROM containing some medical images – but missing key tests and monitoring data. Said Verma, “We left that hospital and we still don’t have his information today.” That was nearly two years ago
Kaiser Health News is a nonprofit national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
Medicare failed to recover up to $125 million in overpayments, records show
Six years ago, federal health officials were confident they could save taxpayers hundreds of millions of dollars annually by auditing private Medicare Advantage insurance plans that allegedly overcharged the government for medical services.
An initial round of audits found that Medicare had potentially overpaid five of the health plans $128 million in 2007 alone, according to confidential government documents released recently in response to a public records request and lawsuit.
But officials never recovered most of that money. Under intense pressure from the health insurance industry, the Centers for Medicare and Medicaid Services quietly backed off their repayment demands and settled the audits in 2012 for just under $3.4 million – shortchanging taxpayers by up to $125 million in possible overcharges just for 2007.
Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 17 million elderly and disabled people – about a third of those eligible for Medicare – at a cost to taxpayers of more than $150 billion a year. And while the plans generally enjoy strong support in Congress, there are critics.
“It’s unclear why the Obama Administration allowed CMS to overpromise and under-deliver so badly on collecting these overpayments,” Sen. Chuck Grassley, R-Iowa, told Kaiser Health News in an email response to the findings.
He said CMS “should account for why this process seems to be so broken and why it can’t seem to fix it, despite recommendations to do so. The taxpayers depend on getting this process right.”
The failure to collect also alarmed Steve Ellis, vice president of the budget watchdog group Taxpayers for Common Sense in Washington.
“They need to put up a bigger and stronger fight to make sure these programs are operated on the straight and narrow,” Mr. Ellis said.
Yet outside of public view, federal officials have been losing a high-stakes battle to curb widespread billing errors by Medicare Advantage plans, according to the records obtained through a Freedom of Information Act lawsuit filed by the Center for Public Integrity.
The Center for Public Integrity first disclosed in 2014 that billions of tax dollars are wasted annually partly because some health plans appear to exaggerate how sick their patients are, a practice known in health care circles as “upcoding.”
Last August, the investigative journalism group reported that 35 of 37 health plans CMS has audited overcharged Medicare, often by overstating the severity of medical conditions such as diabetes and depression.
The newly released CMS records identify the companies chosen for the initial 2007 audits as a Florida Humana plan, a Washington state subsidiary of United Healthcare called PacifiCare, an Aetna plan in New Jersey, and an Independence Blue Cross plan in the Philadelphia area.
The fifth one focused on a Lovelace Medicare plan in New Mexico, which has since been acquired by Blue Cross.
Each of the five audits, which took more than 2 years to complete, unearthed significant – and costly – billing mistakes, though the plans disputed them.
For example, auditors couldn’t confirm that one-third of the diseases the health plans had been paid to treat actually existed, mostly because patient records lacked “sufficient documentation of a diagnosis.”
Overall, Medicare paid the wrong amount for nearly two-thirds of patients whose records were examined; all five plans were far more likely to charge too much than too little. For one in five patients, the overcharges were $5,000 or more for the year, according to the audits. None of the plans would discuss the findings.
As preliminary results of the audits started to roll in, CMS officials outlined steps to recover more than $128 million from the five plans at a confidential agency briefing in August 2010, according to a policy memo prepared for the meeting. The records don’t indicate who attended.
That day, CMS set Humana’s payment error at $33.5 million, PacifiCare at $20.2 million, Aetna at $27.6 million, Independence Blue Cross at nearly $34 million and Lovelace at just under $13 million. Those estimates were based on extrapolation of a sample of cases examined at each plan.
CMS “has developed a process for moving forward with payment recovery,” according to a briefing paper from the 2010 meeting.
But that process fizzled after 2 years of haggling with the plans and insurance industry representatives, who argued the audits were flawed and the results unreliable. In August 2012, CMS gave in and notified the plans it would settle for a few cents on the dollar.
“Given this was a new process, the decision was made at the time to tie repayments to the actual claims reviewed as part of the 2007 pilot audit,” said CMS spokesman Aaron Albright. “For subsequent audits, we said we intended to determine repayments by extrapolating the error rate of the sample of claims reviewed to all claims under the contract.” Mr. Albright said more of the audits are underway. Allowing the insurers to dodge liability dealt a serious blow to the government’s efforts to crack down on billing abuses – a setback one taxpayer advocate called alarming.
“That’s a very bad way to operate the system.” said Patrick Burns, acting executive director and president of Taxpayers Against Fraud in Washington, on hearing of the outcome. “Nobody is held accountable.”
Indeed, CMS kept the settlement terms under wraps until 2015, after an inquiry by Sen. Grassley. The senator had requested details about Medicare Advantage fraud controls in response to articles published by the Center for Public Integrity.
In a July 31, 2015 letter to Sen. Grassley, CMS Acting Administrator Andy Slavitt attached a table that showed the five plans repaid just under $3.4 million. The letter didn’t mention the earlier estimate that the government was due $128 million. Sen. Grassley said it should not have taken the FOIA lawsuit to make that information available to the public.
“Perhaps adding insult to injury, these numbers might never have seen the light of day without a lengthy lawsuit,” Sen. Grassley said this week.
Paying based on risk scores
When Congress created the current Medicare Advantage program in 2003, it devised a new way to pay the health plans.
The method, phased in starting in 2004, seemed simple enough: Pay higher rates for sicker patients and less for people in good health using a formula called a risk score.
But CMS officials soon realized that risk scores rose much faster at some plans than others, a possible sign of upcoding, or other billing irregularities, records show. These overcharges topped $4 billion in 2005, one CMS study found.
The special audits, called Risk Adjustment Data Validation, or RADV, were designed to identify, and hold accountable, health plans that couldn’t justify their fees with supporting medical evidence.
Until these audits, CMS “pretty much went on the honor system with the plans,” an unnamed agency official wrote in an undated presentation.
In the five 2007 pilot audits, two sets of auditors inspected medical records for a random sample of 201 patients at each plan. If the medical chart didn’t properly document that a patient had the illnesses the plan had reported, Medicare wanted a refund. Auditors gave the plans the benefit of the doubt when auditors couldn’t agree, according to the CMS briefing paper.
Finally, CMS applied a standard technique used in fraud investigations in which the payment error rate is extrapolated across the entire health plan, which greatly multiplies the amount due. CMS said it was conservative in assessing the penalties and allowed the plans to appeal.
Appeals or no, the health plans recoiled at the prospect they could be on the hook for millions of dollars they hadn’t budgeted for and didn’t believe they owed. The actual 2007 overage for the 201 Humana patients, for example, was $477,235. Once extrapolated, it soared to $33.5 million.
Michael S. Adelberg, a former CMS official who is now an industry consultant in Washington, said that in retrospect the audit process was “probably rushed.”
Mr. Adelberg said the audits “raised strong industry concerns” on a variety of fronts, from whether CMS had the legal authority to conduct them to the soundness of their methods. CMS stands by its audit techniques and has defended RADV as the only way it can assure plans bill honestly.
Yet agency records released through the FOIA case suggest CMS lacked the will to press ahead with extrapolated audits for Medicare Advantage plans given the fierce industry backlash – even though they do so in overpayment cases targeting other types of medical providers.
One confidential CMS presentation dated March 30, 2011, notes that officials had received more than 500 comments expressing “significant resistance” to the RADV audits.
The presentation goes on to say the audit program’s success depended on its “ability to address the challenges raised.”
CMS didn’t overcome those challenges. Instead, it agreed to settle the five initial audits for $3.4 million, just what it found in the patient files it reviewed – without the extrapolations. And the center did the same for 32 additional 2007 audits, which officials had predicted would refund up to $800 million to the federal treasury. In the end, CMS wound up with $10.3 million from the 32 plans.
The RADV program’s shortcomings, though little known to the public, haven’t gone totally unnoticed. The program was the target of a sharply critical May 2016 report by the Government Accountability Office, which noted that Medicare Advantage plans have overbilled the government by billions of dollars, but rarely been forced to repay the money or face other consequences.
The GAO, the watchdog arm of Congress, called for “fundamental improvements.” The watchdogs also found that CMS has spent about $117 million on the audits, but recouped just under $14 million.
Government officials didn’t dispute that the RADV process had taken far too long and yielded way too little. But while CMS has resumed extrapolated audits, there’s little evidence it is speeding things up.
CMS expected to complete extrapolated audits for payments made in 2011 and finish the job in early 2014, agency records show.
But it has yet to do so. In late December, an agency spokesman said he had no new information about when the 2011 audits would be finished or how much the government would collect.
While the industry awaits the results, it has hardly warmed to the process.
America’s Health Insurance Plans, an industry trade group, argued in a June 2016 position paper that RADV was “not yet stable and reliable,” adding that the audits “could disrupt the care being provided by plans that are working hard to meet the needs of their enrollees.”
John Gorman, a former government health care official and current industry consultant, said he expects RADV to forge ahead under the incoming administration. But he predicted efforts to collect overpayments will “slow down” because the Trump team will prove to be “more sympathetic” to business interests than the Obama administration. The Trump transition office did not respond to a request for comment.
Mr. Gorman said that while career civil servants at CMS decide which plans get audited, how much to assess the health plans as a result rests with “political appointees” who are susceptible to industry lobbying, which he termed “the old Potomac two- step.”
But Sen. Grassley said he is determined to keep a close eye on the audit program. “I intend to press the incoming administration on holding CMS accountable for overpayments that harm taxpayers,” he said.
Taxpayer advocate Mr. Ellis said with so much public money at stake, the government needs to step up its game.
“You can presume that the more people get away with overpayments the more they are going to take,” he said. “As the program gets bigger the problem get bigger.”
This story is a collaboration between Kaiser Health News, a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation, and the Center for Public Integrity.
Six years ago, federal health officials were confident they could save taxpayers hundreds of millions of dollars annually by auditing private Medicare Advantage insurance plans that allegedly overcharged the government for medical services.
An initial round of audits found that Medicare had potentially overpaid five of the health plans $128 million in 2007 alone, according to confidential government documents released recently in response to a public records request and lawsuit.
But officials never recovered most of that money. Under intense pressure from the health insurance industry, the Centers for Medicare and Medicaid Services quietly backed off their repayment demands and settled the audits in 2012 for just under $3.4 million – shortchanging taxpayers by up to $125 million in possible overcharges just for 2007.
Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 17 million elderly and disabled people – about a third of those eligible for Medicare – at a cost to taxpayers of more than $150 billion a year. And while the plans generally enjoy strong support in Congress, there are critics.
“It’s unclear why the Obama Administration allowed CMS to overpromise and under-deliver so badly on collecting these overpayments,” Sen. Chuck Grassley, R-Iowa, told Kaiser Health News in an email response to the findings.
He said CMS “should account for why this process seems to be so broken and why it can’t seem to fix it, despite recommendations to do so. The taxpayers depend on getting this process right.”
The failure to collect also alarmed Steve Ellis, vice president of the budget watchdog group Taxpayers for Common Sense in Washington.
“They need to put up a bigger and stronger fight to make sure these programs are operated on the straight and narrow,” Mr. Ellis said.
Yet outside of public view, federal officials have been losing a high-stakes battle to curb widespread billing errors by Medicare Advantage plans, according to the records obtained through a Freedom of Information Act lawsuit filed by the Center for Public Integrity.
The Center for Public Integrity first disclosed in 2014 that billions of tax dollars are wasted annually partly because some health plans appear to exaggerate how sick their patients are, a practice known in health care circles as “upcoding.”
Last August, the investigative journalism group reported that 35 of 37 health plans CMS has audited overcharged Medicare, often by overstating the severity of medical conditions such as diabetes and depression.
The newly released CMS records identify the companies chosen for the initial 2007 audits as a Florida Humana plan, a Washington state subsidiary of United Healthcare called PacifiCare, an Aetna plan in New Jersey, and an Independence Blue Cross plan in the Philadelphia area.
The fifth one focused on a Lovelace Medicare plan in New Mexico, which has since been acquired by Blue Cross.
Each of the five audits, which took more than 2 years to complete, unearthed significant – and costly – billing mistakes, though the plans disputed them.
For example, auditors couldn’t confirm that one-third of the diseases the health plans had been paid to treat actually existed, mostly because patient records lacked “sufficient documentation of a diagnosis.”
Overall, Medicare paid the wrong amount for nearly two-thirds of patients whose records were examined; all five plans were far more likely to charge too much than too little. For one in five patients, the overcharges were $5,000 or more for the year, according to the audits. None of the plans would discuss the findings.
As preliminary results of the audits started to roll in, CMS officials outlined steps to recover more than $128 million from the five plans at a confidential agency briefing in August 2010, according to a policy memo prepared for the meeting. The records don’t indicate who attended.
That day, CMS set Humana’s payment error at $33.5 million, PacifiCare at $20.2 million, Aetna at $27.6 million, Independence Blue Cross at nearly $34 million and Lovelace at just under $13 million. Those estimates were based on extrapolation of a sample of cases examined at each plan.
CMS “has developed a process for moving forward with payment recovery,” according to a briefing paper from the 2010 meeting.
But that process fizzled after 2 years of haggling with the plans and insurance industry representatives, who argued the audits were flawed and the results unreliable. In August 2012, CMS gave in and notified the plans it would settle for a few cents on the dollar.
“Given this was a new process, the decision was made at the time to tie repayments to the actual claims reviewed as part of the 2007 pilot audit,” said CMS spokesman Aaron Albright. “For subsequent audits, we said we intended to determine repayments by extrapolating the error rate of the sample of claims reviewed to all claims under the contract.” Mr. Albright said more of the audits are underway. Allowing the insurers to dodge liability dealt a serious blow to the government’s efforts to crack down on billing abuses – a setback one taxpayer advocate called alarming.
“That’s a very bad way to operate the system.” said Patrick Burns, acting executive director and president of Taxpayers Against Fraud in Washington, on hearing of the outcome. “Nobody is held accountable.”
Indeed, CMS kept the settlement terms under wraps until 2015, after an inquiry by Sen. Grassley. The senator had requested details about Medicare Advantage fraud controls in response to articles published by the Center for Public Integrity.
In a July 31, 2015 letter to Sen. Grassley, CMS Acting Administrator Andy Slavitt attached a table that showed the five plans repaid just under $3.4 million. The letter didn’t mention the earlier estimate that the government was due $128 million. Sen. Grassley said it should not have taken the FOIA lawsuit to make that information available to the public.
“Perhaps adding insult to injury, these numbers might never have seen the light of day without a lengthy lawsuit,” Sen. Grassley said this week.
Paying based on risk scores
When Congress created the current Medicare Advantage program in 2003, it devised a new way to pay the health plans.
The method, phased in starting in 2004, seemed simple enough: Pay higher rates for sicker patients and less for people in good health using a formula called a risk score.
But CMS officials soon realized that risk scores rose much faster at some plans than others, a possible sign of upcoding, or other billing irregularities, records show. These overcharges topped $4 billion in 2005, one CMS study found.
The special audits, called Risk Adjustment Data Validation, or RADV, were designed to identify, and hold accountable, health plans that couldn’t justify their fees with supporting medical evidence.
Until these audits, CMS “pretty much went on the honor system with the plans,” an unnamed agency official wrote in an undated presentation.
In the five 2007 pilot audits, two sets of auditors inspected medical records for a random sample of 201 patients at each plan. If the medical chart didn’t properly document that a patient had the illnesses the plan had reported, Medicare wanted a refund. Auditors gave the plans the benefit of the doubt when auditors couldn’t agree, according to the CMS briefing paper.
Finally, CMS applied a standard technique used in fraud investigations in which the payment error rate is extrapolated across the entire health plan, which greatly multiplies the amount due. CMS said it was conservative in assessing the penalties and allowed the plans to appeal.
Appeals or no, the health plans recoiled at the prospect they could be on the hook for millions of dollars they hadn’t budgeted for and didn’t believe they owed. The actual 2007 overage for the 201 Humana patients, for example, was $477,235. Once extrapolated, it soared to $33.5 million.
Michael S. Adelberg, a former CMS official who is now an industry consultant in Washington, said that in retrospect the audit process was “probably rushed.”
Mr. Adelberg said the audits “raised strong industry concerns” on a variety of fronts, from whether CMS had the legal authority to conduct them to the soundness of their methods. CMS stands by its audit techniques and has defended RADV as the only way it can assure plans bill honestly.
Yet agency records released through the FOIA case suggest CMS lacked the will to press ahead with extrapolated audits for Medicare Advantage plans given the fierce industry backlash – even though they do so in overpayment cases targeting other types of medical providers.
One confidential CMS presentation dated March 30, 2011, notes that officials had received more than 500 comments expressing “significant resistance” to the RADV audits.
The presentation goes on to say the audit program’s success depended on its “ability to address the challenges raised.”
CMS didn’t overcome those challenges. Instead, it agreed to settle the five initial audits for $3.4 million, just what it found in the patient files it reviewed – without the extrapolations. And the center did the same for 32 additional 2007 audits, which officials had predicted would refund up to $800 million to the federal treasury. In the end, CMS wound up with $10.3 million from the 32 plans.
The RADV program’s shortcomings, though little known to the public, haven’t gone totally unnoticed. The program was the target of a sharply critical May 2016 report by the Government Accountability Office, which noted that Medicare Advantage plans have overbilled the government by billions of dollars, but rarely been forced to repay the money or face other consequences.
The GAO, the watchdog arm of Congress, called for “fundamental improvements.” The watchdogs also found that CMS has spent about $117 million on the audits, but recouped just under $14 million.
Government officials didn’t dispute that the RADV process had taken far too long and yielded way too little. But while CMS has resumed extrapolated audits, there’s little evidence it is speeding things up.
CMS expected to complete extrapolated audits for payments made in 2011 and finish the job in early 2014, agency records show.
But it has yet to do so. In late December, an agency spokesman said he had no new information about when the 2011 audits would be finished or how much the government would collect.
While the industry awaits the results, it has hardly warmed to the process.
America’s Health Insurance Plans, an industry trade group, argued in a June 2016 position paper that RADV was “not yet stable and reliable,” adding that the audits “could disrupt the care being provided by plans that are working hard to meet the needs of their enrollees.”
John Gorman, a former government health care official and current industry consultant, said he expects RADV to forge ahead under the incoming administration. But he predicted efforts to collect overpayments will “slow down” because the Trump team will prove to be “more sympathetic” to business interests than the Obama administration. The Trump transition office did not respond to a request for comment.
Mr. Gorman said that while career civil servants at CMS decide which plans get audited, how much to assess the health plans as a result rests with “political appointees” who are susceptible to industry lobbying, which he termed “the old Potomac two- step.”
But Sen. Grassley said he is determined to keep a close eye on the audit program. “I intend to press the incoming administration on holding CMS accountable for overpayments that harm taxpayers,” he said.
Taxpayer advocate Mr. Ellis said with so much public money at stake, the government needs to step up its game.
“You can presume that the more people get away with overpayments the more they are going to take,” he said. “As the program gets bigger the problem get bigger.”
This story is a collaboration between Kaiser Health News, a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation, and the Center for Public Integrity.
Six years ago, federal health officials were confident they could save taxpayers hundreds of millions of dollars annually by auditing private Medicare Advantage insurance plans that allegedly overcharged the government for medical services.
An initial round of audits found that Medicare had potentially overpaid five of the health plans $128 million in 2007 alone, according to confidential government documents released recently in response to a public records request and lawsuit.
But officials never recovered most of that money. Under intense pressure from the health insurance industry, the Centers for Medicare and Medicaid Services quietly backed off their repayment demands and settled the audits in 2012 for just under $3.4 million – shortchanging taxpayers by up to $125 million in possible overcharges just for 2007.
Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 17 million elderly and disabled people – about a third of those eligible for Medicare – at a cost to taxpayers of more than $150 billion a year. And while the plans generally enjoy strong support in Congress, there are critics.
“It’s unclear why the Obama Administration allowed CMS to overpromise and under-deliver so badly on collecting these overpayments,” Sen. Chuck Grassley, R-Iowa, told Kaiser Health News in an email response to the findings.
He said CMS “should account for why this process seems to be so broken and why it can’t seem to fix it, despite recommendations to do so. The taxpayers depend on getting this process right.”
The failure to collect also alarmed Steve Ellis, vice president of the budget watchdog group Taxpayers for Common Sense in Washington.
“They need to put up a bigger and stronger fight to make sure these programs are operated on the straight and narrow,” Mr. Ellis said.
Yet outside of public view, federal officials have been losing a high-stakes battle to curb widespread billing errors by Medicare Advantage plans, according to the records obtained through a Freedom of Information Act lawsuit filed by the Center for Public Integrity.
The Center for Public Integrity first disclosed in 2014 that billions of tax dollars are wasted annually partly because some health plans appear to exaggerate how sick their patients are, a practice known in health care circles as “upcoding.”
Last August, the investigative journalism group reported that 35 of 37 health plans CMS has audited overcharged Medicare, often by overstating the severity of medical conditions such as diabetes and depression.
The newly released CMS records identify the companies chosen for the initial 2007 audits as a Florida Humana plan, a Washington state subsidiary of United Healthcare called PacifiCare, an Aetna plan in New Jersey, and an Independence Blue Cross plan in the Philadelphia area.
The fifth one focused on a Lovelace Medicare plan in New Mexico, which has since been acquired by Blue Cross.
Each of the five audits, which took more than 2 years to complete, unearthed significant – and costly – billing mistakes, though the plans disputed them.
For example, auditors couldn’t confirm that one-third of the diseases the health plans had been paid to treat actually existed, mostly because patient records lacked “sufficient documentation of a diagnosis.”
Overall, Medicare paid the wrong amount for nearly two-thirds of patients whose records were examined; all five plans were far more likely to charge too much than too little. For one in five patients, the overcharges were $5,000 or more for the year, according to the audits. None of the plans would discuss the findings.
As preliminary results of the audits started to roll in, CMS officials outlined steps to recover more than $128 million from the five plans at a confidential agency briefing in August 2010, according to a policy memo prepared for the meeting. The records don’t indicate who attended.
That day, CMS set Humana’s payment error at $33.5 million, PacifiCare at $20.2 million, Aetna at $27.6 million, Independence Blue Cross at nearly $34 million and Lovelace at just under $13 million. Those estimates were based on extrapolation of a sample of cases examined at each plan.
CMS “has developed a process for moving forward with payment recovery,” according to a briefing paper from the 2010 meeting.
But that process fizzled after 2 years of haggling with the plans and insurance industry representatives, who argued the audits were flawed and the results unreliable. In August 2012, CMS gave in and notified the plans it would settle for a few cents on the dollar.
“Given this was a new process, the decision was made at the time to tie repayments to the actual claims reviewed as part of the 2007 pilot audit,” said CMS spokesman Aaron Albright. “For subsequent audits, we said we intended to determine repayments by extrapolating the error rate of the sample of claims reviewed to all claims under the contract.” Mr. Albright said more of the audits are underway. Allowing the insurers to dodge liability dealt a serious blow to the government’s efforts to crack down on billing abuses – a setback one taxpayer advocate called alarming.
“That’s a very bad way to operate the system.” said Patrick Burns, acting executive director and president of Taxpayers Against Fraud in Washington, on hearing of the outcome. “Nobody is held accountable.”
Indeed, CMS kept the settlement terms under wraps until 2015, after an inquiry by Sen. Grassley. The senator had requested details about Medicare Advantage fraud controls in response to articles published by the Center for Public Integrity.
In a July 31, 2015 letter to Sen. Grassley, CMS Acting Administrator Andy Slavitt attached a table that showed the five plans repaid just under $3.4 million. The letter didn’t mention the earlier estimate that the government was due $128 million. Sen. Grassley said it should not have taken the FOIA lawsuit to make that information available to the public.
“Perhaps adding insult to injury, these numbers might never have seen the light of day without a lengthy lawsuit,” Sen. Grassley said this week.
Paying based on risk scores
When Congress created the current Medicare Advantage program in 2003, it devised a new way to pay the health plans.
The method, phased in starting in 2004, seemed simple enough: Pay higher rates for sicker patients and less for people in good health using a formula called a risk score.
But CMS officials soon realized that risk scores rose much faster at some plans than others, a possible sign of upcoding, or other billing irregularities, records show. These overcharges topped $4 billion in 2005, one CMS study found.
The special audits, called Risk Adjustment Data Validation, or RADV, were designed to identify, and hold accountable, health plans that couldn’t justify their fees with supporting medical evidence.
Until these audits, CMS “pretty much went on the honor system with the plans,” an unnamed agency official wrote in an undated presentation.
In the five 2007 pilot audits, two sets of auditors inspected medical records for a random sample of 201 patients at each plan. If the medical chart didn’t properly document that a patient had the illnesses the plan had reported, Medicare wanted a refund. Auditors gave the plans the benefit of the doubt when auditors couldn’t agree, according to the CMS briefing paper.
Finally, CMS applied a standard technique used in fraud investigations in which the payment error rate is extrapolated across the entire health plan, which greatly multiplies the amount due. CMS said it was conservative in assessing the penalties and allowed the plans to appeal.
Appeals or no, the health plans recoiled at the prospect they could be on the hook for millions of dollars they hadn’t budgeted for and didn’t believe they owed. The actual 2007 overage for the 201 Humana patients, for example, was $477,235. Once extrapolated, it soared to $33.5 million.
Michael S. Adelberg, a former CMS official who is now an industry consultant in Washington, said that in retrospect the audit process was “probably rushed.”
Mr. Adelberg said the audits “raised strong industry concerns” on a variety of fronts, from whether CMS had the legal authority to conduct them to the soundness of their methods. CMS stands by its audit techniques and has defended RADV as the only way it can assure plans bill honestly.
Yet agency records released through the FOIA case suggest CMS lacked the will to press ahead with extrapolated audits for Medicare Advantage plans given the fierce industry backlash – even though they do so in overpayment cases targeting other types of medical providers.
One confidential CMS presentation dated March 30, 2011, notes that officials had received more than 500 comments expressing “significant resistance” to the RADV audits.
The presentation goes on to say the audit program’s success depended on its “ability to address the challenges raised.”
CMS didn’t overcome those challenges. Instead, it agreed to settle the five initial audits for $3.4 million, just what it found in the patient files it reviewed – without the extrapolations. And the center did the same for 32 additional 2007 audits, which officials had predicted would refund up to $800 million to the federal treasury. In the end, CMS wound up with $10.3 million from the 32 plans.
The RADV program’s shortcomings, though little known to the public, haven’t gone totally unnoticed. The program was the target of a sharply critical May 2016 report by the Government Accountability Office, which noted that Medicare Advantage plans have overbilled the government by billions of dollars, but rarely been forced to repay the money or face other consequences.
The GAO, the watchdog arm of Congress, called for “fundamental improvements.” The watchdogs also found that CMS has spent about $117 million on the audits, but recouped just under $14 million.
Government officials didn’t dispute that the RADV process had taken far too long and yielded way too little. But while CMS has resumed extrapolated audits, there’s little evidence it is speeding things up.
CMS expected to complete extrapolated audits for payments made in 2011 and finish the job in early 2014, agency records show.
But it has yet to do so. In late December, an agency spokesman said he had no new information about when the 2011 audits would be finished or how much the government would collect.
While the industry awaits the results, it has hardly warmed to the process.
America’s Health Insurance Plans, an industry trade group, argued in a June 2016 position paper that RADV was “not yet stable and reliable,” adding that the audits “could disrupt the care being provided by plans that are working hard to meet the needs of their enrollees.”
John Gorman, a former government health care official and current industry consultant, said he expects RADV to forge ahead under the incoming administration. But he predicted efforts to collect overpayments will “slow down” because the Trump team will prove to be “more sympathetic” to business interests than the Obama administration. The Trump transition office did not respond to a request for comment.
Mr. Gorman said that while career civil servants at CMS decide which plans get audited, how much to assess the health plans as a result rests with “political appointees” who are susceptible to industry lobbying, which he termed “the old Potomac two- step.”
But Sen. Grassley said he is determined to keep a close eye on the audit program. “I intend to press the incoming administration on holding CMS accountable for overpayments that harm taxpayers,” he said.
Taxpayer advocate Mr. Ellis said with so much public money at stake, the government needs to step up its game.
“You can presume that the more people get away with overpayments the more they are going to take,” he said. “As the program gets bigger the problem get bigger.”
This story is a collaboration between Kaiser Health News, a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation, and the Center for Public Integrity.