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Some Hospitals Under Financial Stress Ask Patients for Payment of Certain Procedures in Advance of Care

Request for money upfront comes at a time when many patients already struggle with medical debt  

In its reporting of healthcare trends gathering momentum, a national newspaper caused quite a stir this spring when it published a story documenting how some hospitals now require patients to pay in advance of specified surgeries and procedures. Hospitals are recognizing what clinical laboratories have long known—a larger proportion of Americans do not have the cash to pay a medical bill.

“It costs [hospitals] time and money to collect after the fact. So, if they can get it upfront, they will” said Wall Street Journal (WSJ) reporter Melanie Evans, during a podcast about her article, “Hospitals Are Refusing to Do Surgeries Unless You Pay in Full First.”

Hospitals and surgery centers are requesting advanced payment for elective procedures such as knee replacements, CT scans, and childbirth procedures, according to an Advisory Board daily briefing.

“In some cases, they may also have a contract with an insurance company. And in that contract are terms that stipulate hospitals need to collect deductibles or co-insurance before a procedure,” Evans added.

According to Bankrate’s 2024 Annual Emergency Savings Report, nearly half of all American’s would be unable to pay cash for an unplanned $1,000 bill. Therefore, one wonders why hospitals would attempt to extract payments from patients in advance of medical visits and clinical laboratory testing. Wouldn’t that just reduce the number of patients electing to undergo needed surgeries and other costly procedures? Nevertheless, it appears that many hospitals struggling financially are doing just that, according to The Wall Street Journal.

Genetic testing laboratories have a similar problem because of high-deductible health plans ($5K/year for individual, $12K/year for family). It means that many patients, even with insurance, struggle to pay a $1,000 to $5,000 bill for a genetic test.

Requesting payment from patients before healthcare visits is not new. However, the practice is on the rise and comes at a time when consumers are already struggling to make ends meet.

“Hospitals collected (in Q1 2024) about 23% of what patients owed them before they set foot in a hospital or doctor’s office. That’s up from about 20% in the same period a year earlier,” said reporter Melanie Evans (above) of The Wall Street Journal, referring to data from 1,850 hospitals analyzed by Kodiak Solutions. Genetic testing laboratories experience similar challenges getting paid due to many people struggling with high deductible health plans. (Photo copyright: LinkedIn.)

Price Transparency Behind Upfront Payments

According to a recent KFF survey of US families, “about half of adults would be unable to pay an unexpected medical bill of $500 in full without going into debt.”

Regardless, asking for payment for nonemergency care has become more common as people increasingly choose health plans with high-deductibles and amid the push for greater price transparency, according to Richard Gundling, Senior Vice President, Content and Professional Practice Guidance at Healthcare Financial Management Association (HFMA), in an interview with Advisory Board.

“It’s very common if not the norm” for hospitals to give patients a cost estimate and ask for advance payment, Gundling stated during the interview.

In fact, healthcare providers and insurers are required to shared charges and estimates as part of newly implemented federal rules. According to the American Hospital Association (AHA) those statutes and rules include:

  • The Hospital Price Transparency Final Rule (effective January 2021) which requires hospitals to publicly post “standard charges” via machine readable files.
  • The No Surprises Act which mandates the sharing of “good faith estimates” with uninsured/self-pay patients for most scheduled services and also requires insurers to provide explanation of benefits to enrollees.

According to Consumer Reports, hospitals are finding consumers less reliable payers than insurance companies. “No one would say, ‘Pay up or we won’t treat you.’ But we’re saying that, ‘You have a large out-of-pocket cost, and we want to know how are you going to pay for it,’” explained Jonathan Wiik, Vice President of Health Insights at FinThrive, a revenue cycle management company.

Razor Thin Hospital Margins

For their part, hospitals, health systems, and medical practices wrote off $17.4 billion in bad debt in 2023, Kodiak Solutions, an Indianapolis-based healthcare consulting and software company, reported in a news release.

Providers collected less than half—47.6%—of what patients owned them for care in 2022 and 2023, down from 54.8% in 2021, according to Kodiak’s report, “Drawing the Line on Patient Responsibility Collection Rates.”

“With the amounts that health plans require patients to pay continuing to grow, provider organizations need a strategy to avoid intensifying pressure on their already thin margins,” said Colleen Hall, Senior Vice President, Revenue Cycle, Kodiak, in the news release.

“Patient collections have become an increasingly difficult challenge for hospitals due primarily to a shift in payer mix. Because of rising deductibles and increased patient responsibility, the percentage of healthcare provider revenue collected directly from patients increased to more than 30% from less than 10% over 10 years,” the HFMA noted.

Thus, the financial tension being experienced by both patients and providers, and the need for patients to prepay for some treatment, are extreme challenges. The situation may call for clinical laboratory leaders to not only focus on quality testing and efficient workflow, but also affordability and access to services.

—Donna Marie Pocius

Related Information:

Why Hospitals Now Require Patients to Prepay for Treatment

Hospitals are Refusing to Do Surgeries Unless You Pay in Full First

Some Hospitals Are Billing Patients in Advance. Here’s Why.

More Hospitals Want Patients to Pay in Advance. Is That Radical Transparency or Unfair to Patients?

Americans’ Challenges with Health Care Costs

Fact Sheet: Hospital Price Transparency

Should You Ever Prepay a Hospital Bill?

Insured Patients Account for More than Half of Bad Debts Written Off by Provider Organizations in 2023, According to Kodiak Solutions Analysis

Drawing the Line on Patient Responsibility Collection Rates

Patients as Payers: Five Ways to Improve the Patient Experience

Healthcare Debt in the U.S.: The Broad Consequences of Medical and Dental Bills  

Multiple Researcher Groups Find Increasing Concentrations of Microplastics in Human Tissue

Scientists suspect that the plastics can be linked to a host of medical conditions, but clear evidence is elusive without appropriate biomarkers for clinical laboratory testing

Recent research indicates that microplastics and nanoplastics (MNPs) are accumulating in human organs at an increasing rate. The health impact is not entirely clear, but the research suggests that clinical laboratories could someday find themselves testing for levels of MNPs in patients.

In one study, scientists at the University of New Mexico and Oklahoma State University analyzed autopsy samples of liver, kidney, and frontal cortex brain tissue collected in 2016 and 2024. “Brains exhibited higher concentrations of MNPs than liver or kidney samples,” they wrote. However, “all organs exhibited significant increases from 2016 to 2024.”

The study, titled, “Bioaccumulation of Microplastics in Decedent Human Brains Assessed by Pyrolysis Gas Chromatography-Mass Spectrometry,” was published as a preprint by the National Institutes of Health (NIH) and has not yet been peer reviewed.

“The concentrations we saw in the brain tissue of normal individuals, who had an average age of around 45 or 50 years old, were 4,800 micrograms per gram, or 0.5% by weight,” lead author Matthew Campen, PhD, Regents’ Professor, Pharmaceutical Sciences, University of New Mexico, and Director of the New Mexico Center for Metals in Biology and Medicine (CMBM), told CNN. “Compared to autopsy brain samples from 2016, that’s about 50% higher.”

Researchers have not yet uncovered clear evidence of specific health risks, but “what scientists worry about is several trends in disease prevalence that have been unexplained—Alzheimer’s disease and dementia, colorectal cancer in people under 50, inflammatory bowel disease, and global reductions in sperm count,” Campen told Everyday Health.

In another recent study, a different team of researchers at the University of New Mexico found high levels of microplastics in human and canine testicular tissue.

“At the beginning, I doubted whether microplastics could penetrate the reproductive system,” said lead author Xiaozhong Yu, MD, PhD, Professor, University of New Mexico College of Nursing in a university news story. “When I first received the results for dogs I was surprised. I was even more surprised when I received the results for humans.”

That study appeared in the journal Toxicological Sciences titled, “Microplastic Presence in Dog and Human Testis and Its Potential Association with Sperm Count and Weights of Testis and Epididymis.”

“The rate of increase in microplastics in the environment is exponential and we have every reason to believe that the concentrations in our bodies will continue to increase in the coming years and decades,” Matthew Campen, PhD (above), of the University of New Mexico told Everyday Health. As studies continue to produce evidence that nanoplastics affect human health, testing companies may develop biomarkers for clinical laboratory tests that measure the amount of microplastics in different organ locations. (Photo copyright: University of New Mexico.)

How They Get Into the Body

“Studies have found these plastics in the human heart, the great blood vessels, the lungs, the liver, the testes, the gastrointestinal tract, and the placenta,” epidemiologist Philip J. Landrigan, MD, pediatrician, public health physician, and professor in Boston College’s Department of Biology, told CNN. He also serves as director of the Program for Global Public Health and the Common Good and the Global Observatory on Planetary Health at Boston College.

Landrigan told CNN that most people are exposed to MNPs through their diet, “but inhalation is also an important route.”

However, he added, “it’s important not to scare the hell out of people, because the science in this space is still evolving, and nobody in the year 2024 is going to live without plastic.”

CNN noted that experts consider nanoplastics to be the biggest concern [as opposed to microplastics] because they can infiltrate human cells.

“Somehow these nanoplastics hijack their way through the body and get to the brain, crossing the blood-brain barrier,” Campen told CNN. “Plastics love fats, or lipids, so one theory is that plastics are hijacking their way with the fats we eat which are then delivered to the organs that really like lipids—the brain is top among those.”

The US Food and Drug Administration (FDA) states that microplastics typically measure less than 5mm, whereas nanoplastics are less than a micron (micrometer). However, the agency notes that “there are currently no standard definitions for the size of microplastics or nanoplastics.”

What Are the Health Risks?

Scientists suspect that MNPs could be associated with cancer, cardiovascular disease, kidney disease, Alzheimer’s disease, and infertility, The Washington Post reported, but that they “still don’t have a clear sense of what these materials are doing to the human body.”

One challenge is that microplastics come in different forms, such as polyethylene, polypropylene, and polyethylene terephthalate, often with chemical additives.

“In a 2021 study, researchers in Switzerland identified more than 10,000 chemicals used in the manufacture of plastic—of which over 2,400 were potentially ‘of concern’ for human health,” The Post noted.

“To be able to say we have a health impact, we need to have a direct correlation between a product and a health outcome,” Phoebe Stapleton, PhD, Associate Professor at the Rutgers University Ernest Mario School of Pharmacy (EMSOP), told The Post. “It’s very narrow, that straight line. And there’s so many different health outcomes there could be, and we’re finding these particles in so many different tissues.”

One study published in the New England Journal of Medicine (NEJM) suggested that MNPs in arteries could be risk factors for heart attacks or strokes. But even here, the authors wrote, “direct evidence that this risk extends to humans is lacking.”

Yu suspects that MNPs could be a factor in a global decline in sperm count, along with other environmental contaminants such as heavy metals and pesticides. His study found that polyethylene was the most prevalent plastic in dogs, followed by polyvinyl chloride (PVC). Higher levels of PVC correlated with lower sperm count, but there was no correlation with polyethylene.

“PVC can release a lot of chemicals that interfere with spermatogenesis, and it contains chemicals that cause endocrine disruption,” he said in the UNM news story.

Clinical laboratory managers should recognize that interest in identifying micro- and nanoplastics in every organ of the human body will increase. At some point, physicians may want labs to test their patients for microplastic levels in certain organ sites. This will likely be when enough published studies show a correlation between high levels of microplastics in certain locations of the body and specific disease states.

—Stephen Beale

Related Information:

UNM Researchers Find Microplastics in Canine and Human Testicular Tissue

Microplastics Are Infiltrating Brain Tissue, Studies Show: ‘There’s Nowhere Left Untouched’

Microplastics Found in Every Human Testicle in Study

Minuscule Plastic Pieces Found in Human and Dog Testicles

What Are the Health Risks of Microplastics in Our Bodies?

With Microplastics, Scientists Are in a Race Against Time

Tiny Shards of Plastic Are Increasingly Infiltrating Our Brains, Study Says

Cyberattack Renders Healthcare Providers across Ascension’s Hospital Network Unable to Access Medical Records Endangering Patients

Inability to access clinical laboratory test results forced hospitals to suspend critical procedures and surgeries causing major disruptions to healthcare

Cyberattacks continue to shut down the ability of hospitals to process orders for clinical laboratory tests, medical imaging, and prescriptions. One such cyberattack recently took place against Ascension, the largest nonprofit Catholic health system in the United States. It took more than a month for the health network’s electronic health record (EHR) system to be fully restored, according to a cybersecurity event press release.

Immediately following the event, Ascension announced it had hired a third party company to resolve the fallout from the cyberattack.

“On Wednesday, May 8, we detected unusual activity on select technology network systems, which we now believe is due to a cybersecurity event. … Access to some systems have been interrupted … We have engaged Mandiant, a third party expert, to assist in the investigation and remediation process, and we have notified the appropriate authorities,” a press release states.

Based in Reston, Va., Mandiant is an American cybersecurity firm and a subsidiary of Google.  

Cyberattacks are happening more frequently and medical professionals need to be aware that patient care can be severely disrupted by such attacks. The Ascension attack locked its employees out of the healthcare provider’s computer databases, rendering medical personnel unable to track and coordinate patient care. The health network’s EHR, phones, and databases used to order certain clinical laboratory tests, imaging services, procedures, and medications were all affected. 

Hospital employees, including two doctors and a registered nurse, spoke anonymously to the Detroit Free Press regarding the issues at their facilities resulting from the cyberattack.

“It’s so, so dangerous,” said the nurse, describing the immediate aftermath of the cyberattack. “We are waiting four hours for head CT [computed tomography scan] results on somebody having a stroke or a brain bleed. We are just waiting. I don’t know why they haven’t at least paused the ambulances and accepting transfers because we physically … don’t have the capacity to care for them right now.”

“In some cases, what are supposed to be unique medical record numbers assigned to patients when they register in the emergency department at Ascension St. John [Detroit, Mich.] have been given to more than one patient at a time,” Detroit Free Press reported. “Because of that, the nurse told the Free Press she couldn’t be confident that a patient’s blood test results actually were his own.”

“We’ve started to think about these as public health issues and disasters on the scale of earthquakes or hurricanes,” Jeff Tully, MD (above), Associate Clinical Professor, Anesthesiology, and co-director of the Center for Healthcare Cybersecurity at the University of California-San Diego, told NPR. “These types of cybersecurity incidents should be thought of as a matter of when and not if,” he added. Inability to verify clinical laboratory test results or access patients’ electronic medical records endangers patients and undermines the confidence of critical healthcare workers. (Photo copyright: UC San Diego.)

Losing Track of Patients and Their Records

According to the HIPAA Journal’s H1, 2024 Healthcare Data Breach Report, “In H1 [first half of the fiscal year], 2024, 387 data breaches of 500 or more [healthcare] records were reported to OCR, which represents an 8.4% increase from H1, 2023, and a 9.3% increase from H1, 2022.”

After the Ascension cyberattack, the healthcare organization’s computer systems were inoperable, and its pharmacy services were temporarily closed. Medical orders for clinical laboratory testing, imaging tests, and prescriptions had to be handwritten on paper and faxed to appropriate departments, which led to long wait times for patients. 

There were cases where singular medical record numbers were assigned to multiple patients. Staff resorted to Google documents, paper charting, and text messaging to communicate with one another. But they still lost track of some patients. 

“For a lot of our nurses, they’ve never paper charted at all,” said Connie Smith, a charge capture coordinator and head of the Wisconsin Federation of Nurses and Health Professionals, in a ThinkStack blog post. “We were using forms that we pulled out of drawers that hadn’t seen the light of day in a long, long time.”

“They are texting me to find out where the patient went,” a St. John Hospital Emergency Room physician anonymously told the Free Press immediately following the Ascension cyberattack. “They don’t even know where the patient is going or if they’ve been admitted. People are getting lost. 

“The pharmacy is getting requests for patient medications, and they have no idea where the patient is in the hospital,” the doctor continued. “Some of the attending physicians are putting in orders for medications, somewhat dangerous medications, and we have no idea if the medications are actually being administered. It’s a scary thing when your medical license is tied to this. If medication mistakes become lawsuits, they will follow us throughout our entire careers and that is not fair to us. It’s not fair to patients.”

According to online updates provided by Ascension, the cyberattack began when an employee downloaded a malicious file thinking it was a legitimate document. That allowed hackers to access seven of Ascension’s 25,000 servers. The resulting cyberattack stifled operations across the organization’s facilities and among its healthcare providers for weeks.

A June 12 update read, “we are pleased to announce that electronic health record (EHR) access has been restored across our ministries. This means that clinical workflow in our hospitals and clinics will function similarly to the way it did prior to the ransomware attack.” The updates did not mention how the attack was resolved or if a ransom was paid to restore the hospitals’ systems.

Preparing for System Disruptions

According to its website, St. Louis-based Ascension has 134,000 associates, 35,000 affiliated providers, and 140 hospitals serving communities in 18 states and the District of Columbia.

“Despite the challenges posed by the recent ransomware incident, patient safety continues to be our utmost priority. Our dedicated doctors, nurses, and care teams are demonstrating incredible thoughtfulness and resilience as we utilize manual and paper based systems during the ongoing disruption to normal systems,” Ascension noted in a Michigan Cybersecurity Event Update.

Clinical laboratory managers and anatomic pathology practice administrators may want to learn from Ascension’s experience and make advanced preparations that will secure patient information and enable their lab to continue functioning during a cyberattack. The Ascension cyberattack illustrates how easily computer systems containing critical information can be hacked and affect patient care. 

—JP Schlingman

Related Information:

Ascension Nurse: Ransomware Attack Makes Caring for Hospital Patients ‘So, So Dangerous’

H1, 2024 Healthcare Data Breach Report

The State-by-State Impact of Ascension’s Cyberattack

Cybersecurity Event Update

The Ascension Incident: How One Email Took Down an Entire Hospital System

Cyberattack Led to Harrowing Lapses at Ascension Hospitals, Clinicians Say

Protesters Outside UnitedHealthcare Headquarters Allege Company Systemically Denies Care

Are ongoing protests and federal investigations into health plan practices evidence that customers have reached a tipping point?

It is not common for beneficiaries to get arrested in front of their health plan’s headquarters. But that is what happened in July, when protesters gathered outside of UnitedHealth Group (UHG) in Minnetonka, Minn., to stress their dissatisfaction with the health insurer. More than 150 protesters participated in the demonstration. Eleven were arrested and charged with misdemeanors for blocking the public street outside of the headquarters.

Their main complaint is that the insurer systemically denies care for patients. This is a situation that probably resonates with hospitals, physicians, clinical laboratory professionals, and pathologists, who often see their own claims denied by health plans, including UnitedHealthcare. 

“UnitedHealth Group’s profiteering by denying care is a disgrace, leaving people across Minnesota and all of the United States without the care they desperately need,” wrote members of the People’s Action Institute in a letter to UHG’s CEO Sir Andrew Witty. People’s Action organized the protest as part of its Care Over Cost campaign.

“Health insurance coverage has expanded in America, but we are finding it is private health insurance corporations themselves that are often the largest barrier for people to receive the care they and their doctor agree they need,” Aija Nemer-Aanerud, campaign director with People’s Action told CBS News.

“We have asked UnitedHealthcare for systemic changes in their practices and they have refused,” he told Bring Me The News.

Nemer-Aanerud told CBS News that UnitedHealth Group leadership has “refused to acknowledge that prior authorizations and claim denials are a widespread problem.”

“Our mission is to help people live healthier lives and help make the health system work better for everyone,” said UnitedHealth Group CEO Sir Andrew Witty (above) during a Senate Finance Committee hearing in May, NTD reported. “Together, we are working to help enable our health system’s transition to value-based care and are empowering physicians and their care teams to deliver more personalized, high-quality care that delivers better outcomes at a lower cost.” (Photo copyright: The Business Journals.)

People’s Action Institute Demands

In the letter, the changes People’s Action urged UHG to make include:

  • Ceasing to deny claims for treatments recommended by medical professionals.
  • Overturning existing denials for recommended treatments.
  • Stopping the practice of using Artificial Intelligence (AI) and algorithms to deny claims in bulk.
  • Executing a publicly shared audit and reimbursing federal/state governments for public money diverted by claims and prior-authorization denials within Medicare and Medicaid systems.
  • Expediting payment of claims.
  • Making public the details of denied claims and prior authorizations by market, plan, state, geography, gender, disability and race.

A spokesperson for UnitedHealth Group told CBS News that the company has had several talks with People’s Action and has settled some of the organization’s issues. That spokesperson also confirmed that UHG tried to discuss specific cases, but the issues People’s Action brought up had already been resolved.

“The safety and security of our employees is a top priority. We have resolved the member-specific concerns raised by this group and remain open to a constructive dialogue about ensuring access to high-quality, affordable care,” UnitedHealthcare said in a statement.

Profits over Patients?

The People’s Action Institute is a national network of individuals and organizations who strive to help people across the US overturn medical care denials made by insurance giants. Its Care Over Cost campaign aims to influence insurers to initiate systemic changes in their practices. 

The recent protest occurred as UnitedHealth Group released its second-quarter financial report claiming $7.9 billion in profits. The company provides health insurance for more than 47 million people across the country and took in $22.4 billion in profits last year.

“UnitedHealth Group’s $7.9 billion quarterly profit announcement is the result of a business model built on pocketing premiums and billions of dollars in public funds, then profiting by refusing to authorize or pay for care,” said Nemer-Aanerud in a press release. “People should not have to turn to public petitions or direct actions to get UnitedHealthcare to pay for the care they need to live.”

“UnitedHealth Group made a decision to spend billions of dollars on stock buybacks, lobbying, and executive pay instead of paying for care people need,” Nemer-Aanerud told Bring Me The News. “They are harming people for profit and should be held accountable for that choice.”

“Delays and denials of care hurt millions of people every year and result in ongoing sickness, injury, medical debt, bankruptcy, worsened health outcomes and even premature death,” wrote Christy Atkinson, MD, a family physician with M Health Fairview University of Minnesota Medical Center and chair of Physicians for a National Health Program-Minnesota; and Matt Hoffman, MD, a physician at Allina Health Vadnais Heights Clinic and a member of Doctors Council, the country’s oldest and largest union of attending physicians, in an article they penned for Minnesota Reformer following a meeting with UHG concerning the protests.

“We all pay for this convoluted system, whether it is in our health insurance premiums or in our public programs. UnitedHealth Group is making billions of dollars in profit by denying people care, including in privatized Medicare and Medicaid plans, to the point that it has prompted a federal investigation … Still, we left the meeting with hope,” they added.

Protests like this one against UnitedHealth Group serve as evidence that the current system of commercial health insurance plans could be deteriorating. This descent may cause customers of these plans to take unprecedented actions to fight for necessary medical care.

As noted earlier, hospitals, physician groups, clinical laboratories, and anatomic pathology groups that see their own claims often denied by health insurers without a clear reason for the denials are probably sympathetic to the plight of patients who are frustrated with how UnitedHealthcare denies their access to care.

—JP Schlingman

Related Information:

11 Arrested During Protest at UnitedHealthcare HQ, Alleging Company is Systemically “Refusing to Approve Care”

Protesters Arrested Outside of UnitedHealth Group Headquarters in Minnetonka

People’s Action Institute Statement on UnitedHealth Group $7.9 Billion Profit Report Following Arrests at Headquarters

Copy of Demand Letter for Delivery (United Healthcare) April 2024

Doctors Speak: Inside Our Meeting with UnitedHealth Group

UnitedHealth Reports $7.9 Billion in Q2 Profits after Protesters Arrested

Arrests Made During Protest Outside UnitedHealthcare Headquarters

11 Protesters Arrested Outside UnitedHealth Group Headquarters

In Massive Crackdown, US Department of Justice Charges 193 Defendants with $2.75 Billion in Healthcare Fraud

Charges include $1.1 billion in alleged telemedicine and fraudulent clinical laboratory testing

Nearly 200 individuals in 25 states are facing charges for alleged participation in a variety of healthcare frauds, the US Department of Justice (DOJ) announced in a press release. This major enforcement action involves telemedicine and clinical laboratory testing as well as other healthcare schemes. In total, the DOJ is alleging the defendants are responsible for $2.75 billion in intended losses and $1.6 billion in actual losses.

The charges include:

  • $1.1 billion in alleged telemedicine and clinical laboratory fraud.
  • A $900 million scheme involving fraudulent Medicare billing for amniotic wound grafts.
  • Unlawful distribution of Adderall and other stimulants.
  • A $90 million scheme involving distribution of “adulterated and misbranded HIV medication.”
  • More than $146 million in fraud involving addiction treatment schemes.
  • A variety of schemes involving fraudulent billing for durable medical equipment (DME) products.

This is one of the DOJ’s largest fraud enforcement actions to date. The charges follow investigations by the Department of Health and Human Services Office of Inspector General (OIG), the Federal Bureau of Investigations (FBI), the Drug Enforcement Administration (DEA), and other federal and state law enforcement agencies, the government said. Most defendants are facing charges in federal court, but some cases are being prosecuted in state courts.

As part of the action, the government has seized more than $231 million in assets, including cash, luxury vehicles, and gold.

Monica Cooper, JD (above), a DOJ trial attorney and member of the Texas Strike Force, is one of two attorneys prosecuting the case against Harold Albert “Al” Knowles of Delray Beach, Fla., and Chantal Swart of Boca Raton, Fla., in the DOJ’s latest crackdown on healthcare fraud. Charges against Knowles and Swart include conspiracy to commit healthcare fraud, conspiracy to defraud the United States, and paying/receiving healthcare kickbacks in a $359 million scheme to bill Medicare for medically unnecessary genetic tests at two Houston clinical laboratories. (Photo copyright: US Department of Justice.)

Houston-Area Labs Charged in $359 Million Scheme

In one case, the government charged Florida residents Harold Albert “Al” Knowles and Chantal Swart in a $359 million scheme involving fraudulent Medicare billing for medically unnecessary genetic tests. Knowles owned two Houston-area labs—Bio Choice Laboratories, Inc. and Bios Scientific, LLC—while Swart ran a telemarketing operation. According to DOJ case summaries, the government alleges that Knowles paid kickbacks to Swart to obtain DNA samples and doctors’ orders for tests.

“Knowles, Swart, and others obtained access to tens of thousands of beneficiaries across the United States by targeting them with deceptive telemarketing campaigns,” the indictments allege. “Call center representatives—who were almost never medical professionals—often prompted beneficiaries to disclose their medical conditions and induced them to agree to genetic testing regardless of medical necessity.”

In addition, “Knowles, Swart, and others agreed that Swart and others would pay illegal kickbacks and bribes to purported telemedicine companies to obtain signed doctors’ orders for genetic testing after only a brief telemedicine visit,” the indictment stated. “Knowles and his co-conspirators knew that the purported telemedicine companies’ physicians were rarely, if ever, the beneficiaries’ treating physicians and rarely, if ever, used the genetic testing results in the beneficiaries’ treatment.”

Dallas-Area Labs Charged in $335 Million Scheme

In another case, the federal government charged that the owner of two Dallas-area clinical laboratories engaged in a $335 million Medicare billing scheme.

Keith Gray, owner of Axis Professional Labs, LLC and Kingdom Health Laboratory, LLC, “offered and paid kickbacks to marketers in exchange for their referral to Axis and Kingdom of Medicare beneficiaries’ DNA samples, personally identifiable information (including Medicare numbers), and signed doctors’ orders authorizing medically unnecessary cardio genetic testing,” the government alleged. “As part of the scheme, the marketers engaged other companies to solicit Medicare beneficiaries through telemarketing and to engage in ‘doctor chase,’ i.e., to obtain the identity of beneficiaries’ primary care physicians and pressure them to approve genetic testing orders for patients who purportedly had already been ‘qualified’ for the testing.”

The indictment, filed in the US District Court for the Northern District of Texas, noted that cardio, or cardiovascular tests, are designed to assess a patient’s risk of developing cardiovascular diseases or assist in treatment.

Other Clinical Laboratory and Healthcare Fraud Cases

DOJ attorneys charged the owners of Innovative Genomics, a clinical laboratory in San Antonio, in a $65 million scheme to bill Medicare and the COVID-19 Uninsured Program for “medically unnecessary and otherwise non-reimbursable COVID-19 and genetic testing,” according to the indictment. Also charged were two patient recruiters who allegedly received kickbacks for referring patients.

Richard Abrazi of New York City was charged in a $60 million Medicare billing scheme. Abrazi owned two clinical laboratories: Enigma Management Corp. and Up Services Inc. Both operated as Alliance Laboratories.

“Abrazi and others engaged in a scheme to pay and receive kickbacks and bribes in exchange for laboratory tests, including genetic tests, that Enigma and Up billed to Medicare,” the indictment alleges. “Abrazi and others also allegedly paid and received kickbacks and bribes in exchange for arranging for the ordering of medically unnecessary genetic tests that were ineligible for Medicare reimbursement.”

The DOJ charged Brian Cotugno, of Auburn, Ga., and James Matthew Thorton “Bo” Potter, of Santa Rosa Beach, Fla., in a $20 million Medicare billing scheme. Cotugno, the indictment alleges, sold Medicare Beneficiary Identification Numbers (BINs) to two Alabama laboratories co-owned by Potter.

“The BINs were used to bill Medicare tens of millions of dollars for OTC COVID-19 test kits, many of which had not been requested by the beneficiaries,” the government alleged.

These are only a few of the recent cases the DOJ brought against defendants nationwide for healthcare, telemedicine, and clinical laboratory fraud. Both Dark Daily and our sister publication The Dark Report have covered these ongoing investigations for years. And we will continue to do so because it’s important that lab managers and pathology group leaders are aware of the lengths to which the DOJ is pursuing bad actors in healthcare.

—Stephen Beale

Related Information:

National Health Care Fraud Enforcement Action Results in 193 Defendants Charged and Over $2.75 Billion in False Claims

2024 National Health Care Fraud Enforcement Action Summary of Criminal Charges

2024 National Health Care Fraud Enforcement Action Court Documents

Clinical Laboratory Testing Implicated in National Healthcare Fraud Sting

Almost 200 People Charged in Schemes Totaling $2.7B in False Health Care Claims

DOJ Catches Over $2.7B in Healthcare Fraud Schemes

UC San Francisco Scientists Discover Antibodies That Appear in Multiple Sclerosis Patients Years before Symptoms Occur

Findings may lead to new clinical laboratory biomarkers for predicting risk of developing MS and other autoimmune diseases

Scientists continue to find new clinical laboratory biomarkers to detect—and even predict risk of developing—specific chronic diseases. Now, in a recent study conducted at the University of California San Francisco (UCSF), researchers identified antibodies that develop in about 10% of Multiple Sclerosis (MS) patients’ years before the onset of symptoms. The researchers reported that of those who have these antibodies, 100% develop MS. Thus, this discovery could lead to new blood tests for screening MS patients and new ways to treat it and other autoimmune diseases as well.

The UCSF researchers determined that, “in about 10% [of] cases of multiple sclerosis, the body begins producing a distinctive set of antibodies against its own proteins years before symptoms emerge,” Yahoo Life reported, adding that “when [the patients] are tested at the time of their first disease flare, the antibodies show up in both their blood and cerebrospinal fluid.”

That MS is so challenging to diagnose in the first place makes this discovery even more profound. And knowing that 100% of a subset of MS patients who have these antibodies will develop MS makes the UCSF study findings quite important.

“This could be a useful tool to help triage and diagnose patients with otherwise nonspecific neurological symptoms and prioritize them for closer surveillance and possible treatment,” Colin Zamecnik, PhD, scientist and research fellow at UCSF, told Yahoo Life.

The researchers published their findings in the journal Nature Medicine titled, “An Autoantibody Signature Predictive for Multiple Sclerosis.”

“From the largest cohort of blood samples on Earth, we obtained blood samples from MS patients years before their symptoms began and profiled antibodies against self-autoantibodies that are associated with multiple sclerosis diagnosis,” Colin Zamecnik, PhD (above), scientist and research fellow at UCSF, told Yahoo Life. “We found the first molecular marker of MS that appears up to five years before diagnosis in their blood.” These findings could lead to new clinical laboratory tests that determine risk for developing MS and other autoimmune diseases. (Photo copyright: LinkedIn.)

UCSF Study Details

According to the MS International Foundation Atlas of MS, there are currently about 2.9 million people living with MS worldwide, with about one million of them in the US. The disease is typically diagnosed in individuals 20 to 50 years old, mostly targeting those of Northern European descent, Yahoo Life reported.

To complete their study, the UCSF scientists used the Department of Defense Serum Repository (DoDSR), which is comprised of more than 10 million individuals, the researchers noted in their Nature Medicine paper.

From that group, the scientists identified 250 individuals who developed MS, spanning a period of five years prior to showing symptoms through one year after their symptoms first appeared, Medical News Today reported. These people were compared to 250 other individuals in the DoDSR who have no MS diagnosis but who all had similar serum collection dates, ages, race and ethnicities, and sex.

“The researchers validated the serum results against serum and cerebrospinal fluid results from an incident MS cohort at the University of California, San Francisco (ORIGINS) that enrolled patients at clinical onset. They used data from 103 patients from the UCSF ORIGINS study,” according to Medical News Today. “They carried out molecular profiling of autoantibodies and neuronal damage in samples from the 500 participants, measuring serum neurofilament light chain measurement (sNfL) to detect damage to nerve cells.

“The researchers tested the antibody patterns of both MS and control participants using whole-human proteome seroreactivity which can detect autoimmune reactions in the serum and CSF,” Medical News Today noted.

Many who developed MS had an immunogenicity cluster (IC) of antibodies that “remained stable over time” and was not found in the control samples. The higher levels of sNfL in those with MS were discovered years prior to the first flare up, “indicating that damage to nerve cells begins a long time before symptom onset,” Medical News Today added.

“This signature is a starting point for further immunological characterization of this MS patient subset and may be clinically useful as an antigen-specific biomarker for high-risk patients with clinically or radiologically isolated neuroinflammatory syndromes,” the UCSF scientists wrote in Nature Medicine.

“We believe it’s possible that these patients are exhibiting cross reactive response to a prior infection, which agrees with much current work in the literature around multiple sclerosis disease progression,” Zamecnik told Yahoo Life.

It “validates and adds to prior evidence of neuro-axonal injury occurring in patients during the MS preclinical phase,” the researchers told Medical News Today.

Implications of UCSF’s Study

UCSF’s discovery is a prime example of technology that could soon work its way into clinical use once additional studies and research are done to support the findings.

The researchers believe their research could lead to a simple blood test for detecting MS years in advance and discussed how this could “give birth to new treatments and disease management opportunities,” Neuroscience News reported.

Current MS diagnosis requires a battery of tests, such as lumbar punctures for testing cerebrospinal fluid, magnetic resonance imaging (MRI) scans of the spinal cord and brain, and “tests to measure speed and accuracy of nervous system responses,” Medical News Today noted.

“Given its specificity for MS both before and after diagnosis, an autoantibody serology test against the MS1c peptides could be implemented in a surveillance setting for patients with high probability of developing MS, or crucially at a first clinically isolated neurologic episode,” the UCSF researchers told Medical News Today.

“It would also be interesting to see whether these antibodies could be a marker of disease severity and explain some of the MS course heterogeneity,” epidemiologist Marianna Cortese, MD, PhD, senior research scientist at Harvard T.H. Chan School of Public Health, told Medical News Today.

The UCSF discovery is another example of nascent technology that could work its way into clinical use after more research and studies. Microbiologists, clinical laboratories, and physicians tasked with diagnosing MS and other autoimmune diseases should find the novel biomarkers the researchers identified most interesting, as well as what changed with science and technology that enabled researchers to identify these biomarkers for development.

—Kristin Althea O’Connor

Related Information:

An Autoantibody Signature Predictive for Multiple Sclerosis

Signs of Multiple Sclerosis Can Be Detected in Blood 5 Years before Symptoms Appear, New Study Finds. Here’s Why This Breakthrough Is Important.

Signs of MS May Be Visible in Blood Years Before First Flare-Up of Symptoms

Blood Test Predicts Multiple Sclerosis Years Before Symptoms Appear

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