This morning Gary Welsh of Advance Indiana writes about the Medicaid fraud investigation of St. Francis hospital and the agreement St. Francis entered into to admit guilt and repay millions. He then suggests the reason for the smell emanating from he HHC-MC nursing home deals, which explanation I have emboldened.:
This case is against St. Francis is peanuts compared to the potential case the federal government could pursue against the Marion County Health & Hospital Corporation. HHC has concocted a scheme to bilk the federal government's Medicaid program out of potentially hundreds of millions of dollars. Under the scheme, HHC is leasing a chain of nursing homes across the state of Indiana from Eagle Care, Inc. HHC, in turn, leases the facilities back to American Senior Communities, a for-profit nursing home company. Creating the illusion that these facilities are owned by a county hospital providing indigent care, HHC is able to get reimbursements from Medicaid at about double the rate other nursing homes receive. While an average nursing home collects close to $4,000 per resident per month, HHC is collecting about $8,000 a month for those same residents according to figures Carl Moldthan of the Indianapolis Taxpayers Association obtained from HHC. It is these revenues that HHC is relying upon to finance at least $38 million a year it anticipates will be needed to pay debt service on the bonds.Welsh's explanation provides the rationale for HHC-MC to be in the nursing home business. The municipal corporation is leveraging its status running a county hospital for indigents to obtain more Medicaid dollars from the federal government.
It's only a matter of time before other nursing homes start complaining to the federal government and the Justice Department steps in and reviews HHC's Medicaid reimbursements. Further, the Obama administration has already stated it will find more than $600 billion in Medicare and Medicaid cuts over the next ten years to help pay for his health care plan. If the government puts a stop to this scheme, HHC will have to turn to Marion County property taxes and levy new property taxes to make up the difference. It will not need approval from Marion County voters to do this if voters approve the November special election referendum. That referendum will allow HHC to pledge property tax revenues to finance the bonds. It's a house of cards just waiting to fall. And when it does, Marion County property taxpayers will face one of the largest tax increases in history.
Welsh also suggest an additional motive for the feds to start looking at HHC-MC's nursing home business. Other companies running nursing homes are going to start complaining to the feds about HHC-MC's use of its charity hospital status to get larger Medicaid reimbursements.
It is those Medicaid reimbursements that provide the income HHC-MC claims will allow it to repay the bonds being issued to build the new Wishard Hospital. In the end though, the taxpayers are the ones backing up those bonds with their property taxes. If the feds swoop in, which is very possible, the taxpayers are not only going to be stuck paying back those bonds through property taxes, but they are going to be on the hook, thanks to HHC-MC, for the inevitable repayment of Medicaid funds, similiar to what St. Francis is facing.
It is unfortunate that the Indianapolis Star, the administration of Indianapolis Mayor Greg Ballard and the Indianapolis City-County Council have not made the effort to stand up and ask tought questions about the horrific liability facing taxpayers.