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Group Health Cooperative

ghc.org

Founded Year

1947

Stage

Acquired | Acquired

Valuation

$0000 

About Group Health Cooperative

Group Health Cooperative, a consumer-governed, nonprofit health system in Washington state and North Idaho, brings together care, coverage, research, and philanthropy to serve their members and create healthier communities. The company offers health plans, and health care via their own clinics and care providers, and contracted provider networks to about 600,000 members.

Headquarters Location

320 Westlake Avenue N. Suite 100

Seattle, Washington, 98109,

United States

206-448-5790

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Latest Group Health Cooperative News

Whistle-Blowers Say Health Insurers Are Scamming Medicare to Make Billions

Apr 12, 2022

7:59 PM IST, 12 Apr 2022 6:30 PM IST, 12 Apr 2022 7:59 PM IST, 12 Apr 2022 Save (Bloomberg) -- Teresa Ross had been raising objections at work for months when her bosses brought in a psychologist hoping to make her question her own sanity. (Bloomberg) -- Teresa Ross had been raising objections at work for months when her bosses brought in a psychologist hoping to make her question her own sanity. A longtime manager at a Seattle health plan called Group Health Cooperative, Ross had opposed changes to the way the company billed Medicare. With the help of a new vendor, the insurer identified new diagnoses for patients, bringing in millions of extra dollars from the government. Ross insisted much of it was fraud. She says she was cut out of meetings. Then she was invited to one with the psychologist. He asked how she was feeling and revealed that a senior executive had sent him to discuss her objections. “People aren’t seeing you as a team player,” she recalls him saying. “They’re concerned that you have a loud voice within the organization. And you're objecting to this thing that's making us lots of money and everybody’s happy.” Ross felt blindsided and insulted. The visit made no difference. Ross had already filed a sealed whistleblower suit against the company, which later merged with Kaiser Permanente in 2017. After years of investigating, the Justice Department took up her case  last year. Other whistleblowers came forward too, with allegations accusing Kaiser and some of its competitors of inflating how sick their members appeared to be to get higher payments from Medicare. The industry vehemently contests the allegations and says that plans get paid appropriately for the risk they take on. But the disputed billing practices at the heart of Ross’s case have become central to the health-care business and, as baby boomers retire, to America’s fiscal future. Medicare covers 64 million  people and will spend $900 billion this year, or 4% of U.S. gross domestic product. Almost half of people on Medicare now get their benefits through Medicare Advantage — private plans like the one Ross worked for, which get paid more for patients with more severe illnesses. That means a growing share of Medicare’s billions flows through arrangements susceptible to the kind of manipulation that Ross described. Each year, the plans submit giant data files to Medicare with diagnostic codes meant to reflect their members’ illnesses. Those codes determine how much they get paid. A federal watchdog warned in March that coding differences brought Medicare Advantage plans $12 billion in excess payments in 2020, compared to what traditional Medicare would have paid to cover the same population. The cumulative extra payments since 2007 will soon top $100 billion , according to the Medicare Payment Advisory Commission, or MedPAC. Those payments mounted as American seniors flocked to the private version of Medicare. Enrollment in Medicare Advantage doubled in the last decade to more than 26 million people, on pace to cover a majority of Medicare beneficiaries. Insurance companies have built billion-dollar businesses propelled by this growth. UnitedHealth Group Inc., Humana Inc., and CVS Health Corp.’s Aetna unit combined enroll more than half of Medicare Advantage members. Kaiser Permanente, with about 7% of the market, isn’t far behind, according to data from the Kaiser Family Foundation, a research group unaffiliated with the health plan. The industry calls the program a win-win. Medicare Advantage caps members’ out-of-pocket costs and offers extra benefits like dental, vision and hearing coverage that traditional Medicare doesn’t. Private plans also send clinicians on house calls, deliver meals and offer rides to medical appointments, stitching together medical care with services intended to address members’ social needs. The program’s growing popularity has made it politically powerful. Republicans extoll its private-sector innovation while Democrats know that enrollees are disproportionately low-income and people of color. An industry coalition recently touted a letter signed by 346 U.S. representatives — more than 80% of the House — urging the Biden administration to “provide a stable rate and policy environment” for the program. Soon after, Medicare proposed payment rates for 2023 that an analyst for Veda Partners called “surprisingly good news for industry.” Yet rising Medicare Advantage enrollment has also prompted warnings about the cost. The program’s hospital trust fund is projected to be depleted in 2026. “Failure to stem the excess spending created by coding intensity further jeopardizes the Medicare program’s already challenging fiscal sustainability,” MedPAC wrote in a comment letter to Medicare officials in March. The industry has billions at stake in how the payments are calculated. In February, UnitedHealth asked the Supreme Court to review a case it lost on appeal challenging a policy to make insurers return payments for unsupported diagnoses. The policy “imposes potentially billions of dollars in additional payment obligations” on plans and would destabilize the Medicare Advantage program, the company said in its petition . Letting the decision stand threatens to reduce benefits and increase costs for seniors in the program, UnitedHealth argued. Official scrutiny is growing. The Department of Justice called policing Medicare Advantage an important priority  on its anti-fraud agenda. The agency said in February that it pursued health plans that gamed the system “by submitting unsupported diagnosis codes to make their patients appear sicker than they actually were,” and cited Ross’s case as an example. Ross’s attorneys estimate the scope of such frauds reaches into the billions of dollars. Ross filed her complaint against Group Health under seal a decade ago, and it remained a secret for seven years. With the aid of other whistleblowers, the Justice Department has also sued industry giants including UnitedHealth, Anthem Inc. and  Cigna Corp. over similar allegations in recent years. The companies are fighting the cases. Now it’s up to the courts to decide which practices are legitimate and which constitute fraud. Ross remains shaken by her experience. Coming forward wasn’t easy, she said. “The easy thing would've been to sit down and just let it happen.” Ross, 57, grew up outside Seattle, a math whiz in a family that kept busy with music lessons and school activities. Her father had a heart attack while she was in high school, and she spent a lot of time at the hospital, pressing his doctors for information. That early exposure coupled with her mathematical acumen led Ross into a career in an obscure corner of the health-care industry. In 1998, she arrived at a nonprofit insurer called Group Health Cooperative to lead a division building statistical models of patient risk. In the 2000s, these models became central to the growing Medicare Advantage industry. Money hinged on the illnesses that plans documented for their members. Traditional Medicare pays doctors and hospitals directly for each test or service. In Medicare Advantage, health plans get a fixed payment from the government for each member they take on. The program will spend on average about  $14,000  per enrollee this year. Through a process called risk adjustment, added diagnoses typically bump payments by $1,000 to $5,000, sometimes even $10,000, according to MedPAC. It’s meant to compensate insurers for taking on sicker patients and discourage them from cherry-picking healthy people. Health-care companies developed increasingly sophisticated methods to maximize payments. A cottage industry of vendors emerged to help them. They mine data from patient charts, send staff to do health-risk assessments in patients’ homes and prod doctors to review potentially missed diagnoses. Ross said she and Group Health originally embraced the system as a way to identify patients who needed care but weren’t getting it. “It’s not just digging for dollars,” she said. “It’s improving care.” Her whistleblower suit and the Justice Department complaint that followed describe a growing pressure within the company to engineer higher risk scores for greater payments. She rebuffed one vendor called Leprechaun LLC hired in 2008 that wanted to submit claims “based on documentation that was clearly inadequate,” according to Ross’s complaint. By 2011, Group Health’s finances deteriorated, and it was facing downgrades from credit raters. That fall, Group Health’s chief executive officer met a counterpart from a Buffalo plan called Independent Health, which had just formed a new subsidiary focused on risk adjustment called DxID, according to Ross’s complaint. In an early pitch, DxID CEO Betsy Gaffney told one of Ross’s colleagues that Group Health’s internal approach to risk-adjustment “is really putting you back financially,” according to the Justice Department complaint. “I get what the purpose of the policies are theoretically, and even kind of agree philosophically, but it is very restrictive,” she wrote in a November 2011 email. Group Health hired DxID the next month on a contingency basis. The vendor would keep 20% of any new revenue it brought in from combing old patient charts to uncover missed diagnoses. Gaffney proposed new ways to identify patients who suffered from illnesses like chronic kidney disease or low oxygen levels, a condition called hypoxia, according to the Justice Department complaint. Ross recalls her managers lit up when they realized how much money it might bring in. Reviewing two years of data, DxID added thousands of potential diagnoses that increased Group Health’s revenue by $32 million, the U.S. alleged. But when Ross checked DxID’s work, she found that three-quarters of the diagnostic codes it submitted for payment lacked proper documentation and didn’t stand up to scrutiny, according to her complaint. The plan got paid for one patient’s depression diagnosis even though a physician said it had resolved and the patient now had “an amazingly sunny disposition,” according to Ross’s complaint. It claimed another patient had kidney complications from diabetes even after a doctor had explicitly ruled that diagnosis out.

Group Health Cooperative Frequently Asked Questions (FAQ)

  • When was Group Health Cooperative founded?

    Group Health Cooperative was founded in 1947.

  • Where is Group Health Cooperative's headquarters?

    Group Health Cooperative's headquarters is located at 320 Westlake Avenue N., Seattle.

  • What is Group Health Cooperative's latest funding round?

    Group Health Cooperative's latest funding round is Acquired.

  • Who are the investors of Group Health Cooperative?

    Investors of Group Health Cooperative include Kaiser Permanente.

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