Jammed Up
Doctors
Last week we talked about moral injury in the medical field - doctors being asked to violate their beliefs and deliver substandard care to patients on behalf of their corporate masters. This week, let’s explore another way financial companies undermine patient care and demoralize medical professionals - predatory fees.
What if your employer charged you a fee, say a few percentage points, to pay you via direct deposit instead of check? That would be messed up, right? Well, that’s how insurance companies reimburse doctors:
Insurers now routinely require doctors to kick back as much as 5% if they want to be paid electronically. Even when physicians ask to be paid by check, doctors say, insurers often resume the electronic payments — and the fees — against their wishes. Despite protests from doctors and hospitals, the insurers and their middlemen refuse to back down.
Five percent! That’s more than twice what VISA or MasterCard charge for a credit card transaction. And these payments are not credit, they are reimbursements for care a doctor has already provided. How on earth are insurers allowed to charge fees on money they owe?
The answer is: a new type of grifter has inserted itself into the mix. Payment processing companies are financial middlemen who facilitate payments from insurers to doctors and take a cut, often splitting it with the insurers.
Stepping back, let’s figure out how much an electronic funds transfer could possibly cost. A payroll processor might pay a few cents or half a percent per funds transfer, even though banks pay fractions of a penny to access the Fed’s ACH system. Even if the insurer paid a processor individually for each reimbursement (they assuredly would not, since they could bundle funds into larger transfers) they’d be paying a fraction of a percent and charging the doctor ten or twenty times’ their cost. There are an estimated two trillion dollars’ worth of medical claims paid yearly in the US, most of it electronic, which would represent as much as $50 billion in profit for insurers and their middlemen. More importantly, it’s $50 billion being stolen from doctors, who have paid to deliver the care.
Some payments companies are not content to simply skim a few points off the top of a bank transfer - they’ve created virtual credit cards to pay doctors:
A brochure for one payment company, Change Healthcare, boasted of automatically enrolling 100,000 doctors and hospitals in a plan to receive virtual credit cards and sharing some $8 million a year in revenues with the large insurer it was working for.
Virtual cards are a product primarily aimed at subprime, unbanked, and undocumented people in America. They are offered to teenage workers at low wage jobs because they lack financial literacy, and come with a host of bloated fees - virtual transfers can cost up to five percent, with transaction fees any time they are used. The idea of a payments industry selling subprime virtual cards to doctors, who are so beaten down by the process of trying to get the money they are owed by insurers, would be shocking if we hadn’t become so inured to our dysfunctional care system.
This theft from the pockets of physicians has ramped up since 2010, when the Affordable Care Act mandated a push towards electronic payments to streamline the reimbursement process. Years later, when CMS moved to clamp down on the fees being charged doctors, something curious happened:
Six months later, that statement disappeared without explanation.
A former CMS employee who now worked for a payments company was essentially still writing policy at the agency, threatening legal action if it tried to cut off his company’s ability to bilk doctors:
The notice triggered an immediate protest from Zelis, according to emails and an internal CMS memo. [Matthew] Albright had “multiple conversations” with CMS staff and demanded that the agency revise the notice.
CMS attempted to apply a 2000 agency rule forbidding excess fees if a doctor received payment from an insurer. Albright argued the rule didn’t apply to processing companies:
The nub of Albright’s argument was that CMS’ 2000 rule prohibited insurers from charging excessive fees for “direct” transactions. But, he argued, the rule was meant to apply to insurers dealing with doctors. Albright represented payment processors who work for insurers; those weren’t direct transactions between insurers and doctors. Thus, he argued, the fee prohibition couldn’t apply to EFT payments.
Three days later, CMS took the notice down. Months later, the agency issued a new notice forbidding insurers and processors from charging fees, but Albright parried, spending months in meetings and phone calls with CMS, threatening legal action until the agency complied. ONE guy, a former mid-level government employee who had the ear of current leadership, single-handedly protected a multibillion dollar extortion racket.
In fact, this one greedy dipshit proved more powerful than some of the nation’s largest medical groups:
The American Medical Association and over 90 other physician groups have urged the Biden administration to reinstate guidance protecting doctors’ right to receive EFTs without fees. For its part, the massive Veterans Health Administration system has been refusing to pay the fees, which it has described as illegal in letters to Zelis and insurers.
And yet, in 2022, CMS under the Biden administration issued new guidance explicitly saying the fees were allowed. We often talk about how America’s riches never seem to trickle down to the needy due because our economy resembles a pitcher plant more than it does a flower. By failing to protect doctors, our government is forcing one of two outcomes - either they get frustrated and quit, exacerbating our current provider shortage, or they pass the costs along to patients, who already pay the most for the least care in the world. All this to protect a bunch of payment and insurance company executives literally making billions by moving numbers on a spreadsheet.
Corizon Health
One category of patient we firmly do not care about in this country is inmates. Typing ‘private’ + ‘prison’ into a search bar will display the ways corporations take advantage of one of our most marginalized groups which, conveniently for immoral profiteers, have few rights and fewer ways to complain about poor conditions.
The country’s largest private provider of health care for prison and jail inmates is (was?) called Corizon Health. I say ‘was’ because Corizon is currently attempting a Texas two-step, and the valuable part of the company - the new owner of Corizon’s assets - is now called YesCare and is still securing multi-billion dollar contracts to provide services to states. Corizon’s Mr. Hyde is called Tehum, which is filing for bankruptcy in an effort to make its raft of bad stuff go away.
How bad is the bad stuff? Pretty fuckin bad!
If Corizon prevails, the malpractice suits against the company could be settled for pennies on the dollar, along with 44 employment-law suits over allegations including discrimination, wage theft, and wrongful termination, and at least $88 million in claims such as unpaid invoices from medical providers, according to bankruptcy filings.
Corizon stiffed states and hospital systems to the tune of millions, and its malfeasance cost it huge contracts with Arizona, Virginia, and New York. Malfeasance is perhaps not strong enough a word in this case, because the company is responsible for what amounts to the torture and killing of inmates. The article cites disturbing allegations and testimony from people under Corizon’s care, and for the reader’s sake I won’t quote them here.
The company was founded in 1978 and by 2011 it was flying high, having merged itself into the country’s biggest provider of prison healthcare. Years of mismanagement put it in a precarious situation within a decade:
As of 2014, Corizon had 14,000 employees, and the company brought in $1.5 billion the following year. But by June 2020, payroll had dropped to 5,000 employees responsible for annual revenue of about $800 million, according to a Nashville business journal.
[…]
In late 2021 the company lost its two largest remaining contracts, with corrections departments in Michigan and Missouri, worth more than $400 million in annual revenue. Revenue would shrink to roughly $600 million that year, and keep falling.
One would think that losing most of a company’s major contracts would be indicative of major problems within an organization, especially one tasked with delivering health care. What the company’s owners saw instead was an opportunity to cash in and cash out via bankruptcy:
But instead of bringing on an experienced healthcare administrator to clean up the delivery of care, the new owners hired a distressed-debt specialist named Sara Tirschwell with a background in turning around troubled businesses.
Who are the new owners? Unclear, actually! The restructuring happened without the knowledge of many of Corizon’s clients, who have termination clauses if the company files for bankruptcy. The bankruptcy lawyer the old owners hired to attempt the restructuring has filed four bankruptcies of his own, and been characterized as a ‘prolific filer of Chapter 11 petitions’ by those seeking to have the deal thrown out. He’s also got some pretty obvious conflicts of interest:
[Lefkowitz is] also a director for a company called M2 HoldCo, the company that owns Tehum, and M2 LoanCo, which put more than $39 million into Tehum — under the condition, awaiting court approval, that Tehum not seek funds from YesCare to pay its creditors.
Is the nation’s largest provider of care of prisoners being stripped for parts by a team of two-bit crooks, many of whom have faced allegations of fraud and embezzlement in the past? If you squint a little, it sure seems that way! Meanwhile, the 72,000 prisoners trapped under Zombie Corizon’s care are relying on a company embroiled in financial controversy and in no way motivated to provide the basic services they’ve got no choice but to submit to.
Michael Oher
If you don’t recognize Michael Oher’s name, you might remember the movie The Blind Side, which spins a version of his origin story. The way the book and movie tell it, Oher was adopted by the Tuohys, a wealthy white Memphis family who helped him realize his dream of playing professional football. Sandra Bullock’s depiction of Leigh Anne Tuohy presents a tough but loving mother who nurtures a wayward Oher because it’s the right thing to do, et cetera. The film came out in 2009, when white savior narratives were still very much en vogue.
Anyhow, it turns out that at least one key detail of the Oher story was incorrect - the Tuohys didn’t adopt Oher, they (allegedly) tricked him into signing a legal conservatorship which (allegedly) entitled them to money made off his story, which Oher claims ran into the millions over the last nineteen years. The sordid story of Oher’s past became clear when he filed a lawsuit against the Tuohys last week, arguing they’d kept him in the dark about the financial arrangement for years.
Let’s address the central argument first: movie narratives aside, there was no legal reason for the Tuohys to adopt Oher at nineteen. There was, however, a quite obvious financial incentive to convince a teenager to sign away the legal right to his name and likeness while a family friend - author Michael Lewis - was busy writing a book about the situation.
One argument Tuohy defenders have offered is that the family was already wealthy, why would they need Oher’s money? Sure, maybe the Tuohys had ample money prior to encountering Oher, but the Blind Side story gave them fame, a thing many rich people want but that, for a mediocre white family from Memphis, would have been extremely difficult to achieve without a Hollywood narrative.
Another indicator - local Reddit posts about the family aside - of the defendants’ character is how they’ve handled the matter in the press. They’ve smeared Oher, accusing the millionaire former pro athlete of extortion.
Lewis - a well-regarded author of non-fiction - should absolutely have subjected his friends to a lot more scrutiny during his ‘reporting’ of the story. In a disheartening show of class solidarity, Lewis was quoted both defending the Tuohys and blaming…Hollywood?
“Everybody should be mad at the Hollywood studio system,” Lewis said. “Michael Oher should join the writers strike. It’s outrageous how Hollywood accounting works, but the money is not in the Tuohys’ pockets.”
Bro…what? Oher does belong to a union - the NFL Players Association - which is why he made millions over his long and productive professional career. What Oher did not have while you were penning a puff piece about his not-actually-adoptive parents was a sober voice in the room questioning why a family of white college football boosters had taken an interest in a powerful young Black man.
Whether the Tuohys made millions or thousands or a single dollar off the false narrative they constructed around Oher is irrelevant. They took advantage of a kid and had him sign away his legal rights as an adult while they piggybacked off his (actually inspiring) personal story to gain the fame and social status they so obviously craved. Now that Oher is attempting to set the record straight, they accuse him of being a greedy opportunist. It’s despicable and I hope Oher sells a million copies of his new memoir, the first book to tell the story of what actually happened to him.
Cruise
Earlier this spring, I wrote:
Unfortunately for the citizens of San Francisco, California transportation regulators do not read this newsletter and seem hellbent on clogging their streets with robotaxis…
Two weeks ago, California regulators gave the green light for GM’s Cruise and Google’s Waymo to operate twenty-four hours a day. This happened despite significant community pushback and numerous reports of the robotaxis causing chaos on San Francisco’s streets. How did the first two weeks of round-the-clock service go? About like you’d expect:
California authorities have asked General Motors to “immediately” take some of its Cruse robotaxis off the road after autonomous vehicles were involved in two collisions – including one with an active fire truck – last week in San Francisco.
Cruise was told to pull cars off the road pending further investigation which, I mean, is having only half as many robotaxis slamming into fire trucks really the right move? The crashes were what spurred regulators to act, but accounts of the taxis snarling traffic quickly became a daily occurrence:
Videos posted on X, formerly known as Twitter, show at least 10 Cruise vehicles not moving with their hazard lights blinking in the city’s North Beach neighborhood, near where the Outside Lands music festival was happening. One account, FriscoLive415, said the incident was a “complete meltdown.”
Witnesses told CNN affiliate KPIX-TV that the driverless cars were blocking intersections Friday evening for about 15 minutes, causing concern that driverless cars could impede emergency vehicles from accessing the area.
Incredible! Who. Could. Have. Predicted. The good news is residents of other major cities will soon have the chance to experience ghost cars targeting emergency vehicles and clogging up their intersections - robotaxis have been approved for testing or operation in Los Angeles, Austin, Atlanta, and (of course) Miami.
Short Cons
CNBC - “Federal law enforcement authorities charged hundreds of people in a nationwide sweep targeting more than $830 million in Covid-19 fraud, the Justice Department announced Wednesday.”
The Guardian - “A witness in the criminal case against Donald Trump over the hoarding of classified documents retracted “prior false testimony” after switching lawyers last month and provided new information that implicated the former president, the justice department said late on Tuesday.”
Kron 4 - “A sweeping investigation began in early 2022 as a narrow probe into officers who allegedly cheated on college tests to obtain salary raises. FBI agents dug into the cheating scandal and opened a “Pandora’s Box” of unethical and criminal behavior among officers, a source told KRON4.”
Mashable - “Of the 153,209,283 X accounts following Musk at the time the data was collected, around 42 percent of Musk's followers, or more than 65.3 million users, have zero followers on their own account. Just over 72 percent, or nearly 112 million, of these users following Musk have less than 10 followers on their account.”
Reuters - “Bankrupt Diamond Sports Group has sued its parent company Sinclair Broadcast Group for fraudulently withdrawing as much as $1.5 billion from the regional sports business, according to a lawsuit made public on Wednesday.”
The Verge - “A Microsoft travel guide for Ottawa, Canada, prominently recommended tourists visit the Ottawa Food Bank, as spotted by Paris Marx until it was removed after this article was originally published.”
Fortune - “The company behind a disastrous change to a Kentucky city’s school bus routes that resulted in more than a week of canceled classes had similar problems in two cities in neighboring Ohio last year.”
CNN - “About 1 in 5 women were mistreated while receiving maternity care, and nearly a third faced discrimination, according to a new report from the US Centers for Disease Control and Prevention.”
CNBC - “John and Roman Cresto made millions of dollars selling themselves as e-commerce “experts” who could teach regular consumers and investors the secret to selling success on Amazon and Walmart, for a price.”
Reuters - “A federal judge has rejected HP's bid to dismiss a lawsuit claiming that it intentionally designed its all-in-one printers to be unable to scan or fax when they are low on ink, as a means to increase profit by boosting ink sales.”
CREW - “Internal Secret Service emails obtained by CREW show special agents in close communication with Oath Keepers leader Stewart Rhodes, while failing to acknowledge the group’s ties to white nationalists and clashes with law enforcement.”