60 Minutes: Health Management Associates & Hospital Admission Quotas


60 Minutes: Cost Of Admission

The high cost of healthcare in America is a constant subject of discussion and debate. But Steve Kroft found out there are some ways that costs are inflated, such as the $210 billion spent annually on unneeded treatments and tests. When those costs are associated with Medicare or Medicaid patients, it’s taxpayers who end up footing the bill.

60 Minutes: Health Management Associates

60 Minutes examined the billing processes of the company Health Management Associates. It is in the top five largest for-profit hospital chains, and took in $5.8 billion in 2011. Over 100 HMA employees admitted to 60 Minutes in a series of interviews that the company pressured its doctors to admit patients whenever possible.


With its 70 hospitals in 15 states, Health Management Associates has turned small regional hospitals into profitable businesses. Kroft reported that hospitals filling more beds make more money.

60 Minutes: Pressure To Admit Patients

60 Minutes: Health Management Associates & Hospital Admission Quotas

Steve Kroft talked with over 100 employees of hospital group Health Management Associates about hospital admission quotas that led to possible fraud.

Nancy Alford, former case management at a Texas hospital, admitted that the hospital chain pressured doctors to admit patients, because it was lucrative to the bottom line. Alford used to be in charge of auditing patient records and bills for Medicare and Medicaid; she was eventually fired.


She and others from HMA facilities around the country came together to talk to 60 Minutes about the uniform pressures on physicians to admit patients, across all HMA hospitals. Cliff Cloonan, a former Army doctor, spent 21 years as assistant emergency room director for a Pennsylvania hospital owned by the company.

Dr. Scott Rankin also worked at the Carlisle Regional Medical Center with Cloonan. They said higher ups at the hospital threatened to cut jobs unless they admitted 20% of patients seen in the emergency room.

60 Minutes: Hospital Admission Quotas

“There’s no way you can do that and not have it be fraudulent because you’re not admitting on the basis of medical requirements,” Cloonan said, calling the number arbitrary.

The medical professionals agreed it is strange to set quotas in the business of medical care. Jeff Hamby, fired from a hospital in Arkansas for missing admissions quotas, is suing for wrongful termination.

60 Minutes: Hospitals Admitting Medicare Patients

HMA insisted that no one has been fired for that, but Hamby said employees were coerced into committing fraud, as the benchmark moved up from 15% to 20%. Cloonan noted that the company chose its words carefully, but the meaning behind them was clear.

Scott Rankin said that for patients over 65, the benchmark was 50%, because of the lucrative Medicare money to be seen there. But Cloonan said that unnecessarily admitting elderly patients puts them at a greater risk of acquiring infections or other hospital-related mishaps.

60 Minutes: Pro-MED Hospital Software Review

Documentation from HMA facilities showed supervisors enticing, encouraging, and threatening staff to admit more patients. Alford confirmed that discussions centered on profit, which can be found by admitting patients and keeping them as long as possible.

Kroft pressed the HMA employees about how this plan was executed throughout the chain’s hospital emergency rooms. The Pro-MED software was implemented for the purpose of improving patient care, but staff said that HMA modified the software to automatically order mostly unnecessary tests for just about every patient who walked in.

60 Minutes: Unnecessary Medical Testing

Hamby and Rankin recalled questioning why tests were ordered before patients were even seen by a doctor. But the computer was responsible for that call. It also tracked performance statistics on the physicians, monitoring productivity.

Doctors who fell in line were praised, while others who flouted the policy were punished. Dr. Hamby said that if you tried to send a patient home but the computer thought the patient met the minimum criteria for admission, a warning would pop up to tell the patient to reconsider.

60 Minutes: HMA CEO Gary Newsome

For doctors who would override the computer’s reminder, “it was like being called to the principal’s office,” Hamby said.

Cloonan questioned why a computer and those behind it, who did not necessarily have medical training or experience, would be making these decisions on behalf of doctors. According to John Vollmer, former executive vice president at HMA, the orders came from CEO Gary Newsome.

60 Minutes: Former HMA EVP John Vollmer

Vollmer, who was fired by HMA, testified in a deposition that he knew what the company wanted to do was wrong, especially in reprimanding those who did not go along with this revenue-based plan. CEO Newsome did not want to talk with 60 Minutes, but the company did provide a new executive vice president, Alan Levine.

According to Levine, disgruntled employees are trying to get back at the company, claiming that HMA admission statistics fell in line with industry averages. Levine denied all the accusations about setting quotas.

60 Minutes: HMA EVP Alan Levine

Kroft confronted Levine with documents from an Oklahoma facility that clearly showed percentage-based admission goals for ER physicians. Levine claimed he did not know anything about the documents Kroft received, and said the paperwork was not from his company.

Does that mean that this group of 100 people who spoke to 60 Minutes are lying about the company? Levine dodged the question; at least, as the report acknowledged, the quality of care is not really in question at these facilities.

60 Minutes: Paul Meyer HMA Investigation

HMA’s Paul Meyer, a veteran of the FBI and a former Medicare fraud investigator, also raised questions about the company’s practices several years ago. Meyer’s opinion was that the company’s admissions policies are based on financial goals.

Meyer looked into complaints from hospital employees. He audited four hospitals and learned that the company was billing Medicare inappropriately in every case. He called it Medicare fraud, since the admission and patient care were not appropriate based on guidelines and criteria.

60 Minutes: HMA Medicare Fraud

He passed his findings on to top managers at the company, noting that his FBI instincts suggested there would or should be an investigation. The company edited his findings and instructed him to destroy his original memos, which he refused to do.

After being fired, Meyer is now also suing HMA for wrongful termination. Levine told Kroft that Meyer’s allegations were not fully accurate, and that the company wants to investigate any complaints it is made aware of.

60 Minutes: HMA Justice Department Investigation

HMA hired an external law firm to investigate Meyer’s findings, which concluded that there was no fraud taking place. Overpayments were refunded to the government, they claim.

Now the Justice Department is investigating the company, which has stopped using the Pro-MED software. The hospital system claims it has nothing to hide. What do you think?

Have you or a family member ever been unnecessarily admitted to a hospital?


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