Rural hospital owner may have defrauded insurance companies through billing scheme - Entrepreneur Generations

Rural hospitals around the country are struggling financially, but some have reaped big profits by exploiting a billing loophole to net big reimbursements from insurance companies, Jim Axelrod reports for CBS.

Insurance providers reimburse rural hospitals at much higher rates to keep health care in those communities. One of those hospitals is Chestatee Regional, a 49-bed hospital in northern Georgia whose owners had been trying to sell it for years. In 2016 a man named Aaron Durall bought it for $15 million--a startlingly large sum. Durall owned a drug screening lab in Florida called Reliance Laboratories and had never owned a hospital.

After the sale, Durall moved part of the billing operation to Florida, and soon afterward huge reimbursement checks from insurance companies began coming in, some for as much as half a million dollars. "Records showed the money was being paid out for drug screens – toxicology tests on urine samples collected from all over the country. Some of the testing was conducted at Durall's lab, Reliance, in Sunrise, Florida, but everything was billed through Chestatee Regional Hospital," Axelrod reports.

Former Chestatee billing clerk Kelly Smallwood told Axelrod that Durall got much higher reimbursement rates by billing through the hospital. Chestatee wasn't his only operation: "Documents show Durall's lab made $67 million billing tests through another rural hospital in Graceville, Florida. A similar deal Durall made with a hospital in northern California has generated more than $31 million in the last eight months. Last year, Durall bought two more rural hospitals in Georgia and Alabama," CBS reports.

Patients from all over the country began calling Smallwood soon after Durall bought Chestatee. One was Sonya Hribal of Tyler, Texas. A toxicology billing pro herself, Hribal said Chestatee had been billing her insurance $2,700 a pop for drug tests on her son who was in in a rehab program in Michigan, adding up to nearly $20,000 for just urinalysis. "I knew what they were doing right from the get go," Hribal told Axelrod. "They were defrauding my insurance company."

Hribal said people should care because insurance companies could increase premiums to avoid losing money on the huge payouts. "They're going to pay for it, you're going to pay for it," she said.

Durall told Axelrod in an email that all the billing at his rural hospitals was done properly. Last month Anthem sent a letter to Durall's hospital in California alleging $13 million had been "improperly billed." The hospital has temporarily suspended its lab program.

from The Rural Blog https://ift.tt/2pItVAC Rural hospital owner may have defrauded insurance companies through billing scheme - Entrepreneur Generations

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