ST. LOUIS — In some ways, Essence Group Holdings Corp. is a homegrown well being care success story.
Founded domestically, it has grown right into a broader firm backed by a serious Silicon Valley investor. Essence now boasts Medicare Advantage plans for seniors with some 60,000 members in Missouri and throughout the Mississippi River in Illinois. It ranks among the many metropolis’s high 35 privately held corporations, in accordance with the St. Louis Business Journal. And market analysis agency PitchBook Data values the corporate at over $1.64 billion.
But a recent audit by the federal Health and Human Services inspector basic, together with a whistleblower lawsuit, have put the St. Louis well being care standout underneath scrutiny. Medicare officers are also conducting a separate audit of Essence.
The identical development and use of huge knowledge that attracted enterprise capital money are getting a renewed look from authorities officers who estimate that Medicare Advantage plans nationwide overcharge taxpayers almost $10 billion yearly.
The April audit of Essence — the primary in a sequence of upcoming audits scrutinizing some Medicare Advantage plans throughout the United States — revealed that the St. Louis firm couldn’t substantiate charges for dozens of sufferers recognized with stroke or melancholy.
The authorities pays privately run insurance coverage like Essence utilizing a formulation known as a “risk score” that’s designed to pay increased charges for sicker purchasers and fewer for sufferers who’re in good well being.
“There’s great temptation to push the envelope on risk scores without the supporting documentation in the medical files, especially for depressive disorders,” mentioned former Sen. Claire McCaskill, a Missouri Democrat who now works as a political analyst. While in workplace, McCaskill in 2015 called for an investigation into overbilling practices by insurers working Medicare Advantage plans.
In the Essence audit of 218 circumstances, HHS discovered dozens of instances by which the well being plan reported sufferers had an acute stroke — that means the sufferers had strokes that yr — once they really had suffered strokes solely in previous years. HHS additionally found that Essence had charged Medicare for main depressive dysfunction diagnoses for a number of enrollees, however that the medical doctors had not advisable a remedy plan, indicating the sufferers seemingly had a much less extreme type of melancholy. In 5 circumstances, HHS couldn’t discover any medical data to help funds for a analysis of acute stroke or main depressive dysfunction diagnoses.
Essence denied wrongdoing however agreed to refund $158,904 that Medicare paid for these sufferers who had been reviewed within the audit and dedicated to correcting another errors.
Medicare Advantage: The Next Silicon Valley Frontier
Essence is a part of the Medicare Advantage increase — such plans now deal with greater than 22.6 million U.S. seniors, about 1 in three individuals on Medicare. And with that development, the cash has adopted — high buyers, including Google, have poured more than $1 billion dollars into health care companies which have Medicare Advantage aspirations.
Essence’s medical expertise arm, Lumeris, which helps energy its Medicare Advantage plans, is vital to these ambitions. And final yr Lumeris acquired a dedication of $266 million over the following 10 years from Cerner, a number one digital medical data agency. Cerner declined to remark for this story on its funding.
Essence, and corporations prefer it, are enterprise capital darlings as a result of they draw deeply on knowledge mining by entities similar to Lumeris to hone well being care supply and reduce prices.
But Essence now finds itself in the midst of a nationwide reckoning with the federal government, which is making an attempt to cut back overbilling by the Medicare Advantage business that it says prices taxpayers as much as $10 billion a yr. Previous efforts to claw again such overpayments have been delayed by an onslaught of lobbying efforts by non-public insurers.
More Overcharging Alleged In Lawsuit
The Missouri whistleblower suit alleges Essence, Lumeris and its native companion, Lester E. Cox Medical Centers, used data-mining software program to determine sufferers for an “enhanced encounter” that jacked up the sufferers’ danger scores to spice up Medicare funds. The go well with was unsealed in January after being filed in 2017 by Branson, Mo., household physician Charles Rasmussen.
In his lawsuit, Rasmussen mentioned he labored for Cox from 2013 via August 2017 and handled greater than 2,000 sufferers there. He and his attorneys declined to touch upon the case.
After a coaching session on “enhanced” coding practices, one physician wrote to Cox officers in an electronic mail that was quoted within the go well with. The physician mentioned the Essence staff had used the case of an 86-year-old affected person that the physician described as “pretty healthy for looking sick on paper” for instance of a possible coding “opportunity.” The physician wrote that the person’s care seemingly price lower than $2,000 a yr, however Essence’s “enhanced” coding strategies may “capture around $11,000 from Medicare.”
The lawsuit alleges: “Because of this fraud, hundreds of millions of taxpayers’ dollars have been siphoned from the United States.”
The case is pending in federal courtroom in Springfield, Mo. On July 15, a decide denied Essence and Cox’s joint movement to dismiss the case.
Essence and Lumeris denied the whistleblower’s allegations in an announcement to Kaiser Health News. Lumeris spokesman Marcus Gordon mentioned the allegations had been “wholly without merit.” In the emailed assertion, he mentioned the businesses would “continue to vigorously defend against these baseless claims,” including that its packages “result in higher quality care and better health outcomes for our members.”
In a written assertion, Cox Media Relations Manager Kaitlyn McConnell mentioned the corporate had reviewed the allegations. “We adamantly deny them, and believe we are fully compliant with the law.”
McConnell added: “As always, patients are our top priority, and we will continue to focus on providing quality and compassionate health care to the communities we serve.”
St. Louis Roots, Ambition For Beyond
Venture capitalist John Doerr speaks throughout an interview in San Francisco, Calif. in 2015.
Essence grew in 2007 after St. Louis doctor and software program designer Dr. Thomas Doerr and his enterprise capitalist brother, John Doerr, an early backer of Amazon and Google, invested within the firm.
Good national press followed, a lot of it noting the corporate’s dedication to creating modern medical software program to enhance affected person care and reduce prices. Neither of the Doerr brothers would remark for this text.
In December 2015, Medicare awarded Essence a 5-star rating, a coveted indicator of high-quality medical care.
That helped make the plans common for purchasers in Missouri, mentioned Stacey Childs, the regional liaison for CLAIM, the state’s medical insurance help program. She credited its A+ rating with the Better Business Bureau and excessive star rankings yr after yr for serving to create a swell of pleasure when Essence expanded to the Springfield space of Missouri in 2015.
And its Lumeris-powered expertise is growing nationally, together with partnerships with Stanford Health Care in California and medical teams in Florida and Louisiana. It additionally has been deployed to different areas, bolstered by Cerner’s funding for a joint program managing Medicare Advantage plans known as the “Maestro Advantage,” in accordance with the partnership’s web site.
Coding Questions
But Rasmussen, the Missouri whistleblower, alleges that Lumeris software program performed a task in overcharging Medicare.
The lawsuit alleges physicians had been inspired to look at high-risk sufferers the medical software program recognized for “Enhanced Encounter” appointments — even sending suggestions for some sufferers who had been in hospice — to re-evaluate their danger scores.
Physicians had been paid $100 to look at sufferers for every of these encounters, in accordance with the go well with. On its web site, Lumeris has said these appointments create “new cash flows to enhance physician incentives and increase the level of physician engagement.”
In an announcement to KHN, Taylor Griffin, a spokesman for Essence, mentioned: “We compensate physicians for the substantial extra time and effort to meet with our members and gather information essential to delivering better care. It is a program designed around capturing the health status of the member and not on capturing codes.”
At least one Essence-affiliated physician has questioned the ethics of the initiative, in accordance with courtroom paperwork. “All I have heard about since we signed on with Essence is about coding to get paid more,” the unidentified physician alleged in an electronic mail to Cox officers. “This is doing little to enhance these patients’ care.”