Senator calls for federal investigation into Missouri hospital's billing practices

Sen. Claire McCaskill, D-Mo., has asked HHS to examine questionable billing practices and a possible kickback scheme operated by Putnam County Memorial Hospital, a 15-bed hospital in Unionville, Mo.

Ms. McCaskill requested the investigation after Missouri State Auditor Nicole Galloway found Putnam County Memorial Hospital received $92 million in insurance payments in less than a year for lab services that were performed at other facilities across the country.

Hospital Partners, a Florida-based management company, took over operations of Putnam County Memorial Hospital in September 2016. The management company is co-owned by Jorge Perez and David Byrns, who became the hospital's CEO. Within days of the takeover, another company, called Hospital Laboratory Partners, which also has ties to Mr. Perez, was incorporated in Florida and began billing health insurers for laboratory work through Putnam County Memorial Hospital, including some tests that were not performed at the facility, according to an investigation by Side Effects Public Media, KCUR and KBIA.

According to Ms. Galloway's report, Putnam County Memorial Hospital acted as a shell company by submitting claims for other labs and funneling the insurance payments through the hospital.

Hospital Laboratory Partners said the auditor's report mischaracterizes the payments. The company said Putnam County Memorial Hospital, a critical access hospital, is authorized to bill for off-site lab work.

Ms. Galloway said the questionable billing at Putnam County Memorial Hospital highlights a national issue. "It has become clear that these billing schemes extend well beyond Putnam County Memorial Hospital, and impact healthcare costs for all of us," she told the Kirksville Daily Express. "I will continue to get to the bottom of this matter to protect Missouri taxpayers, and my office will work with Sen. McCaskill and others in federal government to aid their investigation."

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