A new, outside audit of Scottsdale Physicians Group found evidence suggesting upcoding, billing for medically unnecessary services, and cloning health records.
The independent billing expert concluded in her report if the federal government were to do its own audit "it is probable that more than 90% of payments from Medicare...would have to be repaid."
THE CLAIMS
The hospitalist group provided care inside HonorHealth Shea Medical Center since at least 2016. SPG, SPG Hospice, and United Telehealth are all now in bankruptcy court.
The Department of Justice and DHS Office of Inspector General have been investigating the companies and have filed a $589 million claim in bankruptcy court.
The DOJ stated in court documents that investigators are looking into “at least three separate schemes” they believe SPG may have been involved in:
- Upcoding Medicare Claims
- Improper Inpatient Admissions
- Wrongful Obtainment of PPP Loans
The SPG bankruptcy trustee, currently overseeing the company, paid for — and recently shared with the court — an independent billing audit.
The author of the audit wrote that "The purpose of the review was to assess whether the documentation in the medical record substantiated the services billed to Medicare."
The auditor's conclusion was that there were many 'irregularities' and 'inconsistencies' with SPG's billing and medical documentation records.
CLONING
The audit describes one incident inside HonorHealth Shea Medical Center in early 2022.
Records show an SPG doctor was caring for an 85-year-old woman. The medical records noted that for seven of the 10 days the patient is “resting comfortably.”
But other reports documented that on all 10 days, the patient was "moaning and stating her ‘tailbone’ hurts.”
The auditor noted that certain reports had identical phrasing all 10 days, and the doctor reported spending 50 minutes with the woman.
"That's a big concern, because that's generally called billed but not performed. I find it hard to believe that [85-year-old] patient was seen every day for such a long period of time," said Michael Arrigo, a medical billing expert. Arrigo has testified in complex healthcare fraud cases, but he is not involved in the SPG case.
ABC15 had Arrigo look at the independent audit and the DOJ's $589 million claim, which alleged the company submitted false and upcoded claims to get millions more in Medicare reimbursement.
"A lot of people think Medicare is free. It's not," said Arrigo.
BILLING IRREGULARITIES
In addition to the copy-and-pasted medical records known as 'cloning,' the independent auditor, who has more than 20 years of experience, found billing irregularities.
The auditor looked at a sample of 12 SPG doctors’ billing codes. The doctors were ones who worked for the company at HonorHealth Shea in both 2020 and late 2021 to 2022.
The auditor found that of the 119 “inpatient services” she inspected every single one was sent to Medicare at most expensive, ‘level three’ code.
The auditor went on to say SPG’s Documentation “did not substantiate the medical necessity of the level reported to Medicare for 89% of the encounters.”
"That's one of the highest percentages of non-medically necessary care that I've ever heard of," said Arrigo.
The author also said the billing discrepancy was substantial for “subsequent inpatient care," which is when patients stay in the hospital for multiple days.
According to the report, the 2020 national average for level 3 billing was 46%.
SPG’s doctors though averaged more than 98% level three codes in both audited years.
"Unfortunately, medical billing is complex enough that it's not often discovered to be improper or fraudulent without a whistleblower," said Arrigo.
The trustee managing SPG revealed in court that SPG will shut down at the end of June, when the company loses its contract with HonorHealth Shea. The trustee also revealed that the new contract will be awarded to SPG's current medical director, writing:
"The SPG debtor hospitalist group, under the direction of Dr. Raad Hindosh, was able to form a new entity and was selected by Honor Health to replace SPG at the Honor Health Shea location after June 30, 2023."
WHO IS RESPONSIBLE?
After the ABC15 Investigators aired a report on the DOJ allegations against SPG, the bankruptcy trustee sent ABC15 a statement, which said "...all the [federal] claims...took place under the management of Dr. Nima Ghadimi."
ABC15 also emailed the trustee and his team follow-up questions about SPG billing, compliance programs, internal audits, and other allegatons, but have not received a response. ABC15 also repeatedly reached out to Dr. Ghadimi, SPG’s founder and former president, but have not heard back.
