Scattered Clouds84° WeatherScattered Clouds84° Weather
Insult To Injury: The high costs and rising incidence of trauma center care

How HCA turned trauma into a money-maker

Last year in western Pasco County, 16-year-old Mason Jwanouskos was in the backseat of a convertible when his friend lost control and crashed into a stone pillar.
He couldn't have picked a more expensive place to get hurt.

If he had crashed 30 miles to the south, he would have gone to one of three trauma centers in Tampa or St. Petersburg. They likely would have charged him about $30,000, their typical charge for patients with a concussion.

But Mason was closer to the trauma center at Regional Medical Center Bayonet Point.

His bill: $99,000.

Mason's uninsured parents were not billed three times more because their son got vastly better treatment. Bayonet Point offers the same kind of care as any state-certified trauma center.

The family's bill was so high because Mason, through no choice of his own, wound up at a trauma center run by Hospital Corporation of America.

An unprecedented analysis of state records by the Tampa Bay Times has found that HCA trauma centers, as a group, are charging injured patients tens of thousands of dollars more than Florida's other trauma centers.

The difference has nothing to do with the level of care provided.

Instead, HCA is capitalizing on a marketplace that is unchecked by politicians or regulators. That has allowed one of the nation's largest for-profit hospital chains to bill injured patients record fees, the Times has found.

Getting treated at a hospital has always been expensive. And certified trauma centers, which are designed to treat the most severe injuries, naturally have higher costs.

But HCA has taken high charges to a whole new level.

The Times analyzed billing records going back to 2012 for every trauma center in the state. The newspaper reviewed what each of the 66,000 trauma patients was charged during that time and consulted with experts to assign a severity score to each patient based on a widely accepted statistical model. Among the findings:

• HCA charges, on average, far more than other trauma centers in Florida. The chain's injured patients got an average bill of $124,806 — $40,000 more than the average at other trauma centers.

• The overcharging starts the moment patients arrive, with a special "trauma response" fee that gets billed on top of every treatment and procedure. HCA's cover charge goes as high as $33,000. The rest of the state's average: $6,754. Then, the company charges more than other hospitals for imaging scans, lab tests and drugs.

• The higher bills are not the result of having more seriously injured patients. When it comes to severity of injury, HCA patients are, on average, the same as the state as a whole.

• HCA's trauma fees are especially high for people with minor injuries. For patients whose injuries are least likely to be fatal, HCA's six trauma hospitals have charged more than $29 million in response fees alone. That's more than the state's 20 other trauma centers combined.

• The formula has paid off for HCA, according to confidential documents obtained by the Times. They show the state's largest private insurer, Florida Blue, has paid HCA, on average, almost twice what it paid other trauma centers.

HCA has opened trauma centers in Bradenton, Ocala, Fort Pierce, Clay County, Pasco County and Miami. But it is driving up charges across the state by emboldening other hospitals to raise their own fees.

And everyone pays the price when the high cost of health care gets passed on through health insurance premiums.

Since HCA established its first Florida trauma center in 2009, the statewide tab for treating patients at trauma centers has increased by $1 billion, state records show.

Not every dollar charged was collected. But state data clearly shows an explosion in charges, driven in part by hospitals levying record amounts for the trauma response fee.

The fee was created in 2002 to help trauma centers in Florida and across the nation recoup the cost of specialized care. With virtually no government oversight, the fees have spiraled out of control.

Since 2006, the average fee charged by all Florida trauma centers has ballooned by 20 times the rate of inflation to more than $10,000 per patient.

Much of that increase was driven by HCA's huge new fees.

For-profit hospitals, including HCA, typically bill patients more than non-profits for all kinds of services. But getting treated for a traumatic injury is different than seeking help for the flu. Trauma patients have no choice in where they get treated and no way to comparison shop.

Trauma has long been viewed as a money-losing community service provided by hospitals, which often get government subsidies for providing the care.

Yet, state officials have done nothing to rein in the cost.

In the past five years, the state has allowed HCA to launch an unparalleled expansion. The chain wants to open more.

HCA is now the state's largest provider of trauma services, treating one in five trauma center patients across Florida.

The state Department of Health approves new trauma centers. But the agency has not examined the trauma fees hospitals bill to patients. Neither has the state Agency for Health Care Administration, even though it collects the data from hospitals each year.

In a statement provided by HCA officials, the company said looking at what patients get charged is misleading. Insured or not, no one pays the full bill.

Company officials said their hospitals provide discounts to low-income patients and help them qualify for government programs.

For uninsured trauma patients, the statement said, "we are paid less than $300."

HCA also defended the company's trauma response fees, which it said reflect the true costs of offering trauma services.

"People that are using the trauma system are paying for the trauma system," Peter Marmerstein, president of HCA's West Florida division, recently told the Times.

He noted that for-profit or not, "no hospital stays in business unless it is taking in more money than it's spending."

A winning trauma formula

HCA owns 45 hospitals in Florida, more than any other company. In the late 1990s, the Nashville-based corporation was famously headed by Rick Scott, Florida's current governor, when federal authorities accused the company, then called Columbia/HCA, of fraudulently conducting unnecessary tests and issuing false diagnoses.

Scott resigned amid the scandal, admitting no wrongdoing. The company later pleaded guilty to 14 corporate felonies.

In 2010, top HCA executives held a news conference in Tampa to make a surprising announcement. They planned to open a network of trauma centers across the state.

Trauma centers are specialized units within a hospital's emergency room. They are designed to care for potentially catastrophic injuries, including those from car accidents, debilitating falls and gunshot wounds.

For decades, such cases were viewed as the money-losing domain of large nonprofit hospitals.

But HCA saw things differently.

Having a trauma center boosts a hospital's prestige and profile. It also attracts doctors with specialized training and ensures a steady stream of patients to keep beds filled.

HCA executives said they weren't expecting to collect huge profits. But they had a formula to make trauma work.

"We believe that we can make money on trauma," Daniel Miller, then CEO of HCA's west Florida division told the Times in 2011.

According to the company's most recent state filings, it is doing well everywhere it opened a new trauma center.

The Times has learned that HCA negotiated lucrative contracts with leading insurers triggered when patients are charged a response fee.

Insurers commonly pay set rates for medical care.

But confidential documents obtained by the Times show that Florida Blue pays HCA hospitals a percentage of what it charges to trauma patients — meaning the more the company charges, the more it stands to get paid.

Key deals were struck before it was clear how high the company's prices would go.

The documents show that Florida Blue paid HCA an average of $117,150 for each trauma patient. That's nearly double the $60,147 per trauma case Florida Blue paid to other state trauma centers.

"Maybe shame on us for having a contract that allows that to happen," said Florida Blue Vice President Andy Marino, who oversees the insurer's relationships with hospitals. "But we entered into this and we negotiated rates that we thought were fair and equitable and they are just not turning out to be that way.

"They are making money on this," he said in an interview last summer.

Florida Blue has renegotiated the percentage it pays. Citing non-disclosure requirements, officials would not say how much less HCA gets paid.

But Humana, another major insurer, is paying HCA as much as four times more per trauma patient than it is paying other hospitals on average, said Joe Piemonte, Humana's central and north Florida director of hospital contracting.

Piemonte said it may sound good to have a new trauma center down the street — until one considers how adding centers can increase costs.

"You have to re-evaluate whether it is a good thing," he said.

Supersized bills

The price of care has increased in every community where HCA has opened a trauma center.

Of the five Florida trauma hospitals with the highest average total charges, four were run by HCA, according to the Times' analysis of state-collected data. One of those hospitals, HCA's Orange Park Medical Center, closed its trauma center in February 2013.

The company's trauma center in Miami, Kendall Regional Medical Center, is No. 1. On average, it has billed patients $145,849 since January 2012.

Tampa General Hospital is the only non-HCA trauma center among the five most expensive. It placed third with an average bill of $122,354.

Tampa General is certified by the state as a Level 1 trauma center, signifying that it meets the state's most rigorous trauma center requirements. All of HCA's hospitals are Level 2, a lower designation.

The bottom line: If you get injured and wind up in an HCA trauma center, you likely will be charged more for your care.

Eduardo Sarmiento found that out on a Saturday in 2012.

The athletic 28-year-old was racing his motorcycle at a track in Homestead when he took a bad turn and wiped out, launching his bike in the air and breaking his femur.

A rescue helicopter flew him to Kendall Regional, where he was charged a $33,000 trauma fee.

If Sarmiento had been taken 15 miles away to Miami's other trauma center, Jackson Memorial Hospital, his cover charge would have been $1,363.

"Jesus," Sarmiento said. "How is that even legal?"

Kendall ultimately billed Sarmiento $212,365 for his six-day stay.

The Times compared his total bill to those of 1,590 other patients hospitalized with his general diagnosis, recorded as code "482" in the state data.

Sarmiento's bill was the fifth largest in the state.

It was topped only by patients at other HCA trauma hospitals.

His isn't an isolated case. Using the data, the Times reviewed hospital charges for the 10 most common medical conditions reported at Florida trauma centers.

Since 2012, HCA reported the highest average bills for each one.

It isn't a matter of a few hundred dollars.

In every category, the average HCA bill was at least $20,000 higher than that of a patients hospitalized outside the chain.

The Times found that the corporation billed at least 35 patients trauma response fees of $66,000 each. Last fall, the Times shared its findings with Michele Ziglar, the company's vice president of trauma services.

"I would be appalled," she said. "That's surprising."

A company spokesperson, J.C. Sadler, said the patients had been double billed. No one realized it until the Times contacted HCA with questions about the high fees.

Sadler said HCA corrected the bills and put new protocols in place to ensure that double billing won't happen again.

Borderline cases

HCA's aggressive charging isn't confined to patients with life-threatening injuries.

Even people who spend only one night in the hospital or who wind up needing little more than monitoring can be charged huge fees.

One of those patients is Mason Jwanouskos, the Pasco County teenager treated for a concussion.

Mason broke no bones, lost no blood. His chief complaint was a headache.

But paramedics, who weren't sure if Mason had blacked out, decided to call a "trauma alert" and take him to Bayonet Point.

When trauma centers get an alert, they pull out all the stops. Mason's experience shows how patients can pay the price, far beyond the extent of their injuries.

Mason entered Bayonet Point at 1 p.m. His arrival triggered a $33,000 response fee.

Within minutes, the trauma team wheeled Mason to a CT scanner, where technicians took a barrage of images from his pelvis to his head. The hospital billed nearly $50,000 for seven scans.

By the time his parents made it to the hospital — 36 minutes after Mason — the action was over. Mason's injuries needed no special treatment. The doctors were gone.

Bruce Jwanouskos remembers sitting by his son's bed waiting hours to see a doctor.

"At 8, 9 that evening, I didn't ask, I had to demand to see a doctor ... and it took another hour for him to come up," he said.

Mason went home with his parents the next afternoon, 24 hours after he arrived.

His hospital bill: $99,053.

No one looked back and reduced the family's hospital bill when it turned out his injuries weren't as serious as they might have first appeared.

"After looking at the amount of, I believe, frivolous charging, I was floored. I fell off the chair," said Bruce Jwanouskos. "Price gouging in times of need should be handled as criminal."

Experts say there are a number of problems with Mason's bill, starting with that response fee.

A number of industry experts who pioneered the fee say hospitals should adjust it so that patients with minor injuries pay less than those hurt more seriously.

Like half of the trauma centers in the state, Bayonet does not scale its fee.

Not every trauma patient gets charged for trauma response. But those who are get billed the same amount.

"Giving everybody who has a bump on their head full-court press is just wasteful," said Connie Potter, a former trauma nurse who helped get the response fee created in 2002 and spent the next decade advising hospitals how to use it.

The Times had two medical billing experts review Mason's case.

Both said HCA charged too much. Nora Johnson, a reimbursement auditor, said it was one of the worst cases of overcharging she had ever seen.

Using the hospital's own documentation showing what it would have accepted from Medicare for a patient with Mason's diagnosis, Johnson said a reasonable payment would have been $3,609.

Pat Palmer, founder of Medical Billing Advocates of America, did her own calculation and came up with a similar amount.

Hospitals argue that Medicare pays too little. However, Medicare bases its payments on voluminous data it collects on what treatment actually costs; the measure is widely used as a benchmark of fair value.

Mason was uninsured, but received an auto insurance settlement. So after the Jwanouskos family hired a lawyer, Bayonet agreed in January to accept a total of $35,276 — still 10 times more than the experts say his care cost.

"The hospital is making out like a bandit," Johnson said.

"Absolutely pure profit."

Trauma sells

Emergency care has become a key marketing point for HCA hospitals.

Billboards with live clocks announce wait times to be seen in its emergency rooms.

And the company is in the midst of a public campaign promoting its trauma network.

The message: HCA is here to bring access to life-saving care close to home. This means relatives won't need to travel as far to see their injured loved ones. Patients will get to expert doctors faster than ever before.

It's a sales pitch that has won HCA the support of local politicians, emergency responders and many regular citizens, who can think of no good reason to turn down a trauma center in their back yards.

Meanwhile, competing trauma centers are suing to shut down HCA's new trauma centers. They accuse the state of letting HCA needlessly expand the trauma system.

HCA's lobbyists are now in Tallahassee, working to ensure its facilities stay open. A Senate bill has already been introduced.

Ken Kitson wound up at one of HCA's new trauma centers. He wishes paramedics had taken him to his neighborhood emergency room.

Last summer, the uninsured, unemployed Inverness man slipped on a corn husk at a Publix Supermarket in Citrus County and hit his head. The 57-year-old remembers feeling disoriented as paramedics put him in a helicopter and flew him to Ocala Regional Medical Center.

By the time he got to the HCA trauma center, he was fully lucid, hospital records show. But the hospital charged him a $19,500 trauma response fee.

It may have been the right call to have trauma experts look over Kitson, who had a small amount of blood on his brain. But in the end, he didn't require surgery or any complicated medical care. He spent two nights in the hospital.

His $62,626 bill for a produce aisle slip-and-fall was mostly due to his response fee and imaging scans.

Because of his financial situation, it's unlikely he will have to pay the full bill. But he says that even if he had the money, he wouldn't give HCA a dime.

"To me, it was all overdone," he said. "The whole thing, in my book, was a scam."

Times computer-assisted reporting specialist Connie Humburg contributed to this report. Alexandra Zayas can be reached at azayas@tampabay.com or 727-893-8413. Letitia Stein can be reached at lstein@tampabay.com or 727-893-8330.

How we analyzed the data

To compare HCA's charges to other trauma centers across Florida, the Tampa Bay Times relied on hospital discharge data collected by the state Agency for Health Care Administration. The newspaper focused on trauma patients who were admitted starting in 2012, the first full year of HCA's trauma network, and ending in June 2013, the most recent data available.

One HCA trauma center only operated from November 2011 to February 2013.

To examine the severity of trauma patients' injuries, the Times consulted with Etienne Pracht, a University of South Florida health care economist who is one of the state's leading experts in analyzing the state's data.

Using a program he created, Pracht assigned a widely accepted severity score to each patient that weighs the patient's chance of dying based on reported injury codes. The Times used those scores to analyze trauma centers statewide.

How HCA turned trauma into a money-maker 03/08/14 [Last modified: Sunday, March 9, 2014 12:11am]

© 2014 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...