Hospital officials continue working through billing scheme issues

Nov. 02--Palo Pinto General Hospital has received a request for nearly $1 million from an insurance company stemming from a questionable pass-through billing operation uncovered earlier this year.

Hospital officials are scheduled to discuss with Cigna on Tuesday its request, which is seeking a return of $954,000 paid PPGH.

"We knew that was probably coming," said Rhett Warren, legal counsel for the Palo Pinto County Hospital District and its board of directors that oversee the hospital's operations.

Should the hospital agree and issue Cigna its requested reimbursement, PPGH still will not have lost monies as a result of the billing practice considered improper by some and potentially illegal by others.

Warren said the district and hospital is continuing to cooperate fully and communicate with the FBI concerning the pass-through billing scheme that used the hospital's name to bill for allergy and DNA lab testing services not performed at the hospital. Such practices are considered fraudulent by insurance companies and authorities.

Often rural hospitals, like PPGH, are used for off-site billing because they are reimbursed at rates higher than urban medical facilities.

None of the billing was sent by PPGH, but rather through third-party companies, mainly HealthReconn Connect LLC, which lists two international offices and a U.S. office based in Lewisville, Texas. Hospital district board members terminated all contracts with the associated lab and billing companies.

There reportedly were some 6,500 allergy/DNA lab tests billed in PPGH's name dating back to October 2017, all of which involved patient testing collected and analyzed outside of PPGH.

PPCHD officials said approximately $55 million was billed out in PPGH's name, using its specific Clinical Laboratory Improvement Amendments, or CLIA, number. Officials said the hospital received $8.7 million in payments from insurance companies before most of them stopped. PPGH in turn paid out $6.2 million in lab services and other billing requests.

PPGH is left with around $2 million, and PPGH officials said those funds were set aside to address requests for reimbursements such as the one now pending with Cigna.

"We are not looking at that money as income," Warren said. "The hospital has no (financial) loss at this point in time and we don't expect it will."

He said the hospital is generally not opposing insurers' requests for financial recoveries related to the off-site lab services and billing scheme so long as there is documented proof of the billing, services and payments. The same goes for lab companies requesting payments for services performed, Warren said.

He said unlike some hospitals involved in pass-through billing schemes, PPGH to date has not lost any contracts with health insurance companies.

"We need to keep those contracts," Warren said. "We think of these insurance companies as our partners in business so citizens can come to our hospital and use whatever insurance they have. We don't expect (to lose contracts) the way we are approaching and handling things."

Previous hospital CEO Harris Brooks was terminated July 31 following an internal investigation by the board after members said they first learned of the billing scheme. Brooks was dismissed for a "breach of his employment agreement, violation of hospital core values and policies, including the policy regarding board approval of certain contracts, breach of fiduciary duty and the lack of transparency and candor with the board regarding the allergy and DNA lab testing service line."

The board determined Brooks, without obtaining required board approval, entered into multi-million dollar agreements using the controversial billing practice that has financially devastated some small hospitals across the nation. Typically small hospitals struggling financially and desperate for revenue are ones that have turned to the pass-through billing scheme.

PPGH has been financially stable and operated at a profit in recent years while investing in facilities, adding services and building debt-free a new professional health building. The hospital in 2018 is celebrating its 50th year in operation.

PPCHD board members have approved a contract with the Dallas-based firm John G. Self + Partners to conduct a search for permanent CEO at a cost of $78,500 plus expenses. Brooks, who served 11 years as CEO, was paid an annual salary of $305,000.

PPGH Financial Director Daniel Smith is the interim CEO and is expected to become a candidate for the position.

Warren said he believes all labs have been paid or agreed to final settlements. He said it is hard to know what requests for recoupments are still pending with insurance companies. One company, Blue Cross and Blue Shield, has not made a request to PPGH, Warren stated.

Another concern is whether the hospital's CLIA number has been compromised, though there are no indications to date it is being used by other companies in other billing schemes.

Warren said the FBI has not requested additional information from PPGH and there continues to be no sign it is looking at any other hospital individuals beyond Brooks. Investigators reportedly seized computers and records from Brooks' office around the time of his termination.

Warren said he is providing federal investigators regular updates.

"I don't know what they care about and what they don't care about, so I send them everything," Warren told the Index.

"We are staying optimistic," he added. "We don't want this to happen to anybody else."

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