Journalism in the Public Interest

Federal Agency Failed to Report Disciplined Providers to National Database


The Center for Medicare & Medicaid Services failed to report 45 nursing homes that it had banned from 2004 to 2008 from participating in Medicare until the fall of 2009, according to the Inspector General of the Health and Human Services Department. (iStockPhoto)

The federal agency that administers Medicare and Medicaid contributed to gaps in a national database of disciplined health care providers when it failed to report disciplinary actions as required by law, a new investigation found.

Significant gaps in the decades-old database came to light earlier this year when ProPublica found that many states hadn’t been reporting disciplinary actions taken against doctors, nurses, therapists and other health practitioners as required.

But the Centers for Medicare & Medicaid Services, a federal agency that’s part of the Department of Health and Human Services, essentially undermined its own department’s efforts to manage and maintain the federal database.

The new investigation was conducted by the department’s inspector general [PDF]. It found that CMS, which oversees health care programs serving about 45 million Medicare beneficiaries and 59 million Medicaid beneficiaries, took disciplinary action against numerous bad medical providers but did not report those actions to the Healthcare Integrity and Protection Data Bank.

The database is meant to help hospitals and other entities make informed hiring decisions, and to prevent incompetent, fraudulent, or abusive medical providers from crossing state lines to continue practicing and putting patients at risk. But as we’ve reported, the database is riddled with gaps, and many states have also failed to report.

Because the sanctions that went unreported by CMS often involved institutions such as nursing homes and laboratories, the repercussions of this missing data may be less serious compared to the data that went unreported by states. Unlike individual practitioners, they’reless able to move across state lines and set up shop elsewhere.

CMS is required by law to report the following types of disciplinary action to the database: revocations and suspensions of laboratory certifications; terminations of providers from participation in Medicare; civil monetary penalties against all types of providers, managed care plans, and prescription drug plans.

Some of the data that should’ve been reported includes 148 sanctions imposed against laboratories in 2007 and 30 sanctions taken against managed care and prescription drug plans between January 2006 and July 31, 2009. From 2004 to 2008, the agency banned 45 nursing homes from participating in Medicare, and those actions were not reported until fall 2009, long after the required reporting timeframe, the inspector general’s office said.

One CMS division —responsible for tracking and reporting actions against Medicare-certified providers—didn’t report a single action between 2001 and 2008.

Officials from the agency wrongly believed “that only adverse actions related to fraud and abuse should be reported to the HIPDB,”the inspector general’s office found.

CMS acknowledged the lapse in a written response to the inspector general’s office. The agency said it will work on reducing the extent of manual reporting and building the necessary infrastructure to meet reporting requirements in the future.

Omitted from the story:

1. The names of those who broke the law by failing to report.

2. The legal action being taken.

Right now the story reads as if the miscreants are allowed to say, “Oh, right. Sorry about that. We’ll start keeping those records very soon now.” and get away Scot-free. This is not how laws are supposed to work.

Richard Baldwin Cook

Sep. 21, 2010, 4:06 p.m.

I agree with Leisrureguy’s comments. This propublica report is short on needed facts. But in looking through some of the links in the article, there is more context and inf provided, included the info that “hundreds of sanctions” have been leveled. Would be hard to list all those names. But yet, why not personalize the whole investigation by listing the names of those who failed to report the miscreants and whether the non-reporting bureaucrats now face prosecution - as Leisureguy noted, this is important but missing info..

Gunther Steinberg

Sep. 21, 2010, 6:38 p.m.

Ripping off Medicare and other agencies has long been one of the bigger drains on the national budget. Too often, the perpetrators are defended by legislators who gained donations or had a piece of the pie.
  Uncle Sam has always been the biggest purse around to be stripped of “minor” amounts that sum up to be in the many millions. - Regulation and prosecution has always been hamstrung by Congress failing to provide funds for the job. The IRS, SEC, CMS and other agencies can earn more by preventing fraud than the cost of preventing and going after the perpetrators. Medicare does inadequate accounting and checking on bills submitted. They just pay, and if fraudulent, find that it too late to recover anything, because the perps have disappeared and opened up under a new name.

Richard Baldwin Cook

Sep. 21, 2010, 8:26 p.m.

Thanks Gunther, for the posted comment. Sounds like you know what you are talking about. Any chance you gonna blow a whistle?

Susan Lawrence

Sep. 21, 2010, 10:08 p.m.

CMS will never improve with Marilyn Tavenner in charge. She was the queen of coverups and free passes in Virginia and has carried the same pattern with her to CMS as the #2 dog. “Profits before People” should be her personal motto! Psychiatric Solutions Inc. and Universal Health Services were given free reign in Virginia to abuse, neglect, molest, rape, and kill disabled children in their “care.” Now she is the go to ‘gal nationally for all these huge, multi-billion dollar agencies.
“Keep An Eye On PSI!”(and UHS!)

“One CMS division —responsible for tracking and reporting actions against Medicare-certified providers—didn’t report a single action between 2001 and 2008.”

OK, kiddies, who was running the gub’mint during those years and let them get away with this?  If you guessed the same clowns that let the banks run wild, let terrorists attack NY and DC, let those same terrorists get away with it, started a war of aggression, cut taxes for millionaires and me too, let New Orleans drown,and presided over the greatest recession since the big Depression, you’d be right. 

No, not Clinton, sillies.  It was the Decider guy and Fat Elvis.  Remember?

Richard Baldwin Cook

Sep. 22, 2010, 8:27 a.m.

BurningFeet got it right. 100%.

I am still wondering who if any gvt employee is going to be prosecuted, sanctioned, identified even or just promoted-and-retired, for not reporting the violators..

Mary Hawthorne

Sep. 22, 2010, 6:05 p.m.

I always thought corruption filtered down from the top.
I guess it has moved upward from the state (Virginia) since the Richmond Times Dispatch reported on the covering up and changing reports that would benefit PSI….oops! I forgot Kaine and Tavenner,( to make reference to Richard Baldwin’s point,) did get identified but were never prosecuted….they just left town to move
further to the front of the line and do more harm.
Soooo sad, so disgusting!  Folks keep googling and
reading everything you can about PSI and contact
your media and government representatives.  Our
children need all the help they can get in exposing
this national disgrace!

Richard Baldwin Cook

Sep. 22, 2010, 7:26 p.m.

Checking a bit further into what most of the rest of you already know -

I see that Stephen Reinhardt, while VA Mental Health Commis, refused to downgrade a PSI facility license and also did not make public any problems there - so that he could take a PSI consultant job.

These are despicable people - winking at the abuse of the most vulnerable people - to pad their own pay checks.

Solution? Prosecution. But is that likely, since the probs occurred under Gov Tim Kaine.

Susan Lawrence

Sep. 27, 2010, 8:52 p.m.

The Virginia Commission on Youth made a request last week for the Virginia Office of the Inspector General to investigate PSI facilities in Virginia. The Virginia Office of the Attorney General is already doing the same, having started a similar investigation with the DOJ of Universal Health Services Medicaid fraud issues at their Marion, VA facility. UHS plans to buy and “improve” PSI nationwide. Talk about the blind leading the blind.
Now Tim Kaine is on the short list to replace President Obama’s chief of staff. Hope President Obama will look closer at these situations before making a potentially embarrassing appointment to his staff. I don’t believe Governor Kaine is far enough away to avoid prosecution.
Here are more horror stories about UHS owned facilities nationwide.,0,2423816.story

Doctor Kickback Schene

Oct. 23, 2010, 4:46 a.m.

Welcome to AmeriChoice of Pennsylvania

On behalf of AmeriChoice of Pennsylvania, I would like to welcome you as a participating provider in our Medicaid and Children’s Health Insurance Program (CHIP) products. We are committed to working with you and your staff to achieve the best possible outcomes for our members. This welcome kit contains valuable information about important contacts, policies, procedures and services to help you to conduct business with us as efficiently as possible. For easy navigation through the kit components, you can click on each link in the Table of Contents, which will bring you directly to that section. You can also download the Physician, Health Care Professional, Facility and Ancillary Administrative Guide by logging on to . This is a comprehensive reference source for the information you and your staff need regarding claims, benefits, prior authorization, medical management and other plan components. Again, we are pleased that you are one of our participating providers delivering quality care to our members. If you have any questions about your participation with AmeriChoice, or need a printed copy of this welcome kit, please call the Provider Service Helpline at 1-800-345-3627.


Ernest Monfiletto Pennsylvania-East, Chief Executive Officer AmeriChoice of Pennsylvania AmeriChoice Provider Welcome Kit

This chart identifies bonus payments available to you, in addition to your regular payments, for compliance with HEDIS measures as defined by the National Committee for Quality Assurance (NCQA). For more information, call Jessica Anglin at 215-832-4590.

AmeriChoice Provider Welcome Kit This chart identifies bonus payments available to you, in addition to your regular payments, for compliance with HEDIS measures as defined by the National Committee for Quality Assurance (NCQA). For more information, call Jessica Anglin at 215-832-4590. Provider Incentives Measure Requirements AmeriChoice Will Available Referrals Adolescent Well-Care • Provider Incentive:$100/4th qtr 2008 only;$50/visit all other months • Member Incentive: 2 movie tickets Ages 12–21 years • Well-care visit • Physical exam • History of health & development • Education & guidance • Call members • Offer auto messaging for providers • Mail reminders • Provide member list with addresses and phone numbers • Provide EPSDT grid Healthy First Steps® (HFS) 877-651-6667 Lead Screening • Provider Incentive: $15/submitted test • Member Incentive:$15 VISA gift card • Documented levels • 9-19 months and <3rd birthday • Call members • Provide Case Management for elevated levels • Offer auto messaging for providers • Provide member list with addresses and phone numbers • Provide MEDTOX in-office testing MEDTOX 877-725-7241 Healthy First Steps (HFS) 877-651-6667 Childhood Immunizations All immunizations • Call members • Mail reminders • Review registry for Philadelphia County • Offer uto messaging for providers • Provide EPSDT grid Healthy First Steps (HFS) 877-651-6667 BMI Ages 2-20 years Documentation in chart • Offer auto messaging for providers • Offer BMI wheel Healthy First Steps (HFS) 877-651-6667 Dental Screenings Ages 2-20 years • Mail reminders • Call members • Offer auto messaging for providers Healthy First Steps (HFS) 877-651-6667 Case Management 877-651-6667 Asthma Ages 5-56 years • Identify as having persistent asthma • At least one Rx • Preferred asthma therapy education• Create member medication profiles • Call members • Provide Case Management referrals • Offer LifeLink Case Management 877-651-6667

AmeriChoice Provider Welcome Kit Pa

Measure Requirements AmeriChoice Will Available Referrals Breast Cancer • Member Incentive: $50 VISA gift card Mammogram Females, Ages 40-69 years • Call members • Mail reminders • Offer auto messaging for providers • Assist in locating providers and scheduling appointments • Assist with ransportation QM Coordinator 215-832-4524 Case Management 877-651-6667 Cervical Cancer Screening (PAP) • Member Incentive: $25 VISA gift card Females, Ages 21-64 years • Call members • Mail reminders • Offer auto messaging for providers • Assist in locating providers and scheduling appointments • Assist with transportation QM Coordinator 215-832-4524 (to help schedule) Case Management 877-651-6667 Diabetes Care Provider Incentive: • Phase 1: Completed E and M visit ($100.00) and completed Cholesterol and HbA1C Screening • Phase 2: Diabetes managed – ($150.00); Cholesterol below 100 mg; HbA1c below 9 Ages 18-75 • HbA1C testing and documentation <9 • LDL screening and documentation <100 mg/dL) • Retinal eye exam performed • Blood pressure control • (<140/90 mm Hg) • Nephropathy screening test Urine macroalbumin □ Visit to nephrologist □ Treatment for nephropathy □ Therapy with ACE inhibitor/ARBs • Call members • Mail reminders • Provide Case Management • Offer auto messaging for providers Case Management 877-651-6667 Frequency of Ongoing Prenatal Care • Provider ncentive: $250 for completed prenatal intake form • Submission of completed prenatal intake form by provider • FAX to AmeriChoice HFS at 215-832-4986 • Provide Case Management Healthy First Steps (HFS) 877-651-6667 ER Diversion • Decrease overutilization of ER services for non-urgent diagnosis • Call members • Provide Case Management Case Management 877-651-6667

Its Party Time

Nov. 5, 2010, 1:21 p.m.

by New York State Insurance Department
NEW YORK, NY (12/10/2009)(readMedia)—Governor David A. Paterson today announced that the Insurance Department has received requests from three New York State insurers or their subsidiaries to issue dividends of more than $1.2 billion, which will be sent to out-of-state corporate parents. The requests follow initial dividend actions from the same three insurers last year that totaled $948 million.

“The fact that health insurers take such large amounts of money out of the health care system while individual New Yorkers and small businesses struggle with skyrocketing health insurance premiums is deeply troubling,” Governor Paterson said. “While rising unemployment is swelling the ranks of uninsured, the health insurance industry is making record dividends. State law allows them to issue these dividends to their out-of-state corporate parents, and there is nothing New York State regulators can do about it; they need the authority to protect consumers.”

Insurance Superintendent James J. Wrynn said: “This is yet another reason the Legislature should reinstate the Insurance Department’s authority to prior approve premium rate increases. Under the current ‘file and use’ methodology, the Department has little if any ability to review whether rate increases are excessive or consider the financial health of the insurer when it files for a rate increase. This year we received file and use applications for rate increases up to 33 percent. Prior approval would allow us to consider the insurer’s overall financial condition when we review a proposed premium increase.”

The following dividend requests were made to the Insurance Department and the Department of Health (dividend applications from HMOs are reviewed by the Department of Health, upon consultation with the Insurance Department):

Oxford: $800 Million. The total includes a request to dividend $400 million from Oxford Health Insurance, Inc. (OHI) to its sole shareholder and parent, Oxford Health Plans (OHP) and a request by OHP to dividend $800 million to its parent corporation, Oxford Health Plans, LLC. (The $800 million includes the $400 million from OHI, plus another $400 million from OHP’s existing surplus).

Empire: $200 million. The total includes a request to dividend $90 million from Empire HealthChoice HMO, Inc. to its parent corporation, Empire HealthChoice Assurance Inc. and a request to dividend another $110 million from Empire HealthChoice Assurance, Inc. (for a total of $200 million) to its parent corporation, WellPoint Holding Corp.

Aetna: $134 million. Aetna Health, Inc. to its parent corporation, Aetna Health Holdings, LLC.

United Healthcare: $75 million. United Healthcare of N.Y. Inc. HMO to its parent corporation, AmeriChoice Corporation.

The dividends requested ranged as high as 18.7 percent of premiums:

Company Proposed Dividend 2008 Premium Percentage of premium
Oxford Health Plans(NY) HMO $800,000,000 $4,281,631,568* 18.7
Aetna Health HMO $134,000,000 $832,746,956 16
Empire Healthchoice Assurance $200,000,000 $7,866,209,688** 2.5
United Healthcare of NY, Inc. HMO $75,000,000 $730,572,429 10.3

* Includes $2,149,038,993 in OHI premium revenue.

** Includes $2,642,361,151 in Empire Healthchoice HMO premium revenue.

Last year, insurers released almost $1 billion in dividends:

$500 million. Oxford Health Plans (NY) to its parent corporation, Oxford Health Plans, LLC.

$48 million. Aetna Health Plan to its parent corporation, Aetna Health Holdings, LLC.

$400 million. Empire HealthChoice Assurance, Inc. to its parent corporation, WellPoint Holding Corp. Empire notes that these funds were primarily repayment of a capital loan from the parent WellPoint for the New York State employee drug benefit contract.

Since 1999, more than $5 billion in dividends have been issued industry wide, for a total of $5.4 million from that year through 2008.

Governor Paterson and the Insurance Department have urged the Legislature to restore its ability to approve health insurance rates for several years. Under current law, the Department is only allowed to review rate increases after they have gone into effect. Unfortunately, by the time the Department learns that the health plan increased their rates excessively; many consumers have already been priced out of the market due to the increase.


A previous version of this release incorrectly stated that the following statements were given in support of reinstating the Department of Insurance’s authority to approve premium rates. This is not correct. The following statements are not meant to reflect a position on this policy.

Kenneth E. Raske, President of the Greater New York Hospital Association, said: “While insurers seek to distribute $1.2 billion in dividends to out-of-state corporate parents a staggering 25 percent increase over last year hospitals on the frontline of patient care are struggling just to break even. That disparity should outrage all New Yorkers.”

Daniel Sisto, President of the Healthcare Association of New York State, said: “This is a wake-up call to New York’s businesses that for-profit HMOs are an ally to no one. These plans have established an astounding business model: saddle businesses with huge annual premium increases, complicate service delivery to patients and payments to providers, ship billions in profits out of state, and all the while blame everyone else for increased health care costs. At a time when sacrifice is requested from all health care sectors, these for-profit HMOs have instead responded with self interested protectionism. Now we know what these plans were really protecting—their ability to transfer billions of dollars to out-of-state corporate parents, instead of using a fraction of these New York-derived profits to help protect health services for the very New Yorkers who are footing the bill.”

Dr. David T. Hannan, President of the Medical Society of the State of New York, said: “The enormous dividend to be paid to corporate parents and shareholders demonstrates the need to return to the State Insurance Department the authority to review and approve health insurance rate requests. Returning this authority will not only better control health insurance premium increases, it will assure that health plan profits are reasonable and that companies are not allowed to extract excessive amounts of resources from the health care system in New York State and divert such resources to company dividends and profits.”

Mark Scherzer, Legislative Counsel for New Yorkers for Accessible Health Coverage, said: “The very healthy profits being generated in our very unhealthy insurance market suggest the need not only for additional regulatory authority for the Insurance Department, but also for laws imposing greater limits on insurers’ administrative expenses and requiring higher medical loss ratios for individual and small group health coverage.”

Elisabeth Benjamin, Vice President for Health Initiatives at the Community Service Society and a leader of the Health Care for All New York Campaign said: “Our polling shows that New Yorkers understand that insurers are over-zealously hiking premiums, this practice underscores the need for the State lawmakers to reassert their ability to approve premium increases before they go into effect. In fact, 67% of New Yorkers believe that State insurance regulators should have the power to prevent these excessive rate increases.”

Todd L. Shimkus, President and CEO of the Adirondack Regional Chamber of Commerce, said: “It’s deeply offensive to see such excessive dividends paid to these insurers while we’re seeing a record number of small businesses and sole proprietors forced to go without health insurance because of skyrocketing rates. Beyond going without, many of our family owned businesses are being forced to shift to high deductible plans or to pay their premiums with high interest credit cards. The small business community or what’s left of it needs the legislature to authorize the Insurance Superintendent to be our consumer advocate by reinstituting prior approval.”

Paul Muoio, on behalf of Benefit Specialists of NY, a wholly owned subsidiary of the Greater Syracuse Chamber of Commerce, said: “Health care reform, as well as health insurance reform, is not an easy fix. An appropriate prior approval process is only one of the many avenues required to address reform. We believe that to be an effective process that benefits the public and the business community, aspects of ‘prior approval’ must address the early release of rates, adequate stop-loss levels, an effective and time sensitive review process, and penalties for providing misleading or erroneous information during the review process.”


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