More than three years ago, health insurance giant Centene Corp. settled allegations that it overcharged Medicaid programs in Ohio and Mississippi related to prescription drug billing.
Now at least 20 states have settled with Centene over its pharmacy benefit manager operation that coordinated the medications for Medicaid patients. Arizona was among the most recent to join the ranks, settling for an undisclosed payout, Richie Taylor, a spokesperson for the state's attorney general, told KFF Health News in December.
All told, Centene has agreed to pay more than $1 billion in settlements, according to Cohen Milstein, one of the law firms representing states in the agreements. Meanwhile, St. Louis-based Centene reported $163 billion in revenue in 2024, largely proceeds from government health programs for Medicaid, Medicare, and the Affordable Care Act. The health care company has admitted no wrongdoing in the settlements.
Two state holdouts appear to remain: Georgia has yet to settle with Centene, even though the administration of Gov. Brian Kemp hired law firm Liston & Deas in 2019 to investigate state pharmacy benefit operations.
Florida hired the same law firm in 2021 to pursue overbilling allegations involving Centene, but state officials declined to answer a reporter's questions about whether Florida has dropped the case, reached an undisclosed settlement, or is still discussing the issue.
Neither state has publicly disclosed what's standing in the way of potentially tens of millions of dollars in Centene payouts, or whether negotiations are taking place. Because the deals are largely occurring outside the court system, the process between the private law firms hired by states and Centene remains generally out of public view.
Centene spokespeople did not return multiple phone calls and emails asking for updates. In 2022, the company said it was working on settlements with Georgia and eight other states, having reached deals with 13 others. And in a Securities and Exchange Commission filing in October, Centene said it had reached settlements with "the vast majority of states impacted" over the operations of its former pharmacy benefits manager.
Georgia has "taken disproportionately long compared to other states," said Greg Reybold, a vice president of the American Pharmacy Cooperative, which represents independent pharmacies.
Meanwhile, Centene's Georgia Medicaid plan, the Peach State Health Plan, lost its bid last year to continue its longtime participation in a Georgia Medicaid program in which companies cover the care for Medicaid recipients for a set fee from the government rather than for each medical service provided. The company, which has been part of the contract since the managed-care program began in 2006, filed a protest over the contract awards, saying that the process was "mismanaged, rife with errors and reckless practices."
Nationally, pharmacy benefit managers, or PBMs, have come under increased scrutiny over accusations of pocketing discounts on medications or inflating costs in the years since Centene started settling its Medicaid-related allegations. Members of Congress have proposed major policy constraints on PBMs. Centene has since overhauled its PBM operation.
Still, a possible settlement in Georgia could bring in significant money to the state. California had the largest publicly disclosed settlement at $215 million, split with the federal government, but a settlement with Georgia could be in the range of the $88 million that Centene agreed to pay in the Ohio dispute, Reybold said.
The state should aggressively pursue a settlement with Centene, said Roland Behm, co-founder of the Georgia Mental Health Policy Partnership, who is a critic of Centene and its Georgia Medicaid plan. Behm said state Attorney General Chris Carr should take "the same tenacious prosecutorial action" against Centene that Carr's agency takes against individuals involved in fraud against Medicaid, the federal-state program that provides health insurance coverage for those with low incomes or disabilities.
Carr's office said in 2022 that it stood ready to represent Georgia in settlement negotiations with Centene. Carr, a Republican who has announced he's running for governor in 2026, received tens of thousands of dollars in campaign contributions from Centene, its subsidiaries, and its executives, as did Kemp, a fellow Republican, KFF Health News reported in 2022. Contributions to the Kemp and Carr campaigns were part of more than $26.9 million that Centene, its subsidiaries, its top executives, and their spouses donated to state politicians in 33 states, to their political parties, and to nonprofit fundraising groups from 2015 through 2022.
Since 2022, the company and its political action committee have contributed, combined, at least $2 million more to the campaigns of Florida and Georgia candidates of both political parties, along with state party organizations and political committees, according to state campaign finance records.
When asked about a possible settlement, a spokesperson for Carr, Kara Murray, directed a reporter to the Georgia Department of Community Health, which administers Medicaid.
Fiona Roberts, a spokesperson for that agency, then told KFF Health News that the department "is actively pursuing options to ensure regulatory compliance with the state's contract." She declined to comment further.
Florida's attorney general's office directed a reporter to the state agency that oversees Medicaid, the Florida Agency for Health Care Administration. But that agency did not respond to multiple phone calls and emails requesting comment.
Rebecca Grapevine of Healthbeat contributed to this article.
The Justice Department's years-long court battle to force UnitedHealth Group to return billions of dollars in alleged Medicare Advantage overpayments hit a major setback Monday when a special master ruled the government had failed to prove its case.
In finding for UnitedHealth, Special Master Suzanne Segal found that the DOJ had not presented evidence to support its claim that the giant health insurer exaggerated how sick patients were to illegally pocket more than $2 billion in overpayments.
"A mere possibility of an overpayment is not enough for the government to carry its burden," Segal wrote in an initial ruling. She recommended that UnitedHealth's motion to dismiss the case be granted. The recommendation, which is to be presented to the federal judge handling the case, can be appealed within two weeks.
The civil fraud case against UnitedHealth Group, the nation's largest Medicare Advantage insurer, was filed in 2011 by whistleblower Benjamin Poehling, a former company employee. The DOJ took over the case in 2017. Medicare Advantage is the privately run alternative to the traditional Medicare program for seniors.
"After more than a decade of DOJ's wasteful and expensive challenge to our Medicare Advantage business, the Special Master concluded there was no evidence to support the DOJ's claims we were overpaid or that we did anything wrong," UnitedHealth spokesperson Heather Soule said in a statement.
Wyn Hornbuckle, a spokesperson for the Justice Department, said the agency wouldn't comment on the ruling, which was filed in federal court in Los Angeles. Attorneys for whistleblower Poehling had no comment.
Medicare pays Advantage health plans higher rates to cover sicker patients but requires that their conditions be properly documented in medical records.
The DOJ alleges Medicare paid UnitedHealth Group more than $7.2 billion from 2009 through 2016 based on the company's efforts to boost revenue by reviewing patient records to find additional diagnoses and adding medical billing codes to their files. According to the DOJ, Medicare would have paid the company $2.1 billion less if it had deleted unsupported billing codes.
The Justice Department also alleged that in these chart reviews, the health insurance giant ignored overcharges that might have reduced bills.
But the special master, who was appointed by U.S. District Judge Fernando Olguin, concluded the government's case "depends entirely on speculation and assumptions about what the codes found by the United coders actually mean."
"If this stands, I think it is a major defeat for the government," said William Hanagami, an attorney who represented a different whistleblower in one of the earliest cases alleging billing fraud by a Medicare Advantage insurance company. Hanagami said he expects the government to appeal the decision.
Segal noted that UnitedHealth executives told Centers for Medicare & Medicaid Services officials about its chart review policies at an April 2014 meeting. At the time, CMS was considering a regulation to restrict use of chart reviews, but the agency backed off the regulation under pressure from the insurance industry. At the time, a CMS official described the industry's response as an "uproar."
The special master noted that United had requested the meeting with CMS officials, which she called "the opposite of concealment."
"The problem with the government's allegations is that the government knew of the very chart review practices which it now claims United prevented it from learning, and thus the government cannot have been duped into relying on any action or inaction by United in determining whether it had been the victim of overpayments," Segal wrote.
Segal noted CMS audits of UnitedHealth's Medicare Advantage plans had found that about 89% of billing codes were supported by patient medical records. The audit findings "undercut" the government's claim that the company engaged in widespread overbilling.
"This litigation has been pending for more than a decade," she wrote, "and the government has had ample opportunity to develop evidence in support of its theories. It has not."
The decision comes as UnitedHealth faces renewed investigations into its handling of Medicare Advantage coding, including a new Justice Department review.
Medicare Advantage insurance plans have grown explosively in recent years and now enroll about 33 million members, more than half of people eligible for Medicare.
The industry has been the target of dozens of whistleblower lawsuits and government audits alleging that the plans cost taxpayers too much money, including a demand last month by Senate Judiciary Committee chair Chuck Grassley (R-Iowa) that UnitedHealth explain its billing practices.
In his mid-80s, he had a stroke. Then lymphoma. Then prostate cancer. He was fatigued, isolated, not all that steady on his feet.
Then Tsubaki took part in an innovative care initiative that, over four months, sent an occupational therapist, a nurse, and a handy worker to his home to help figure out what he needed to stay safe. In addition to grab bars and rails, the handy worker built a bookshelf so neither Tsubaki nor the books he cherished would topple over when he reached for them.
Reading "is kind of the back door for my cognitive health — my brain exercise," said Tsubaki, a longtime community college teacher. Now 87, he lives independently and walks a mile and a half almost every day.
The program that helped Tsubaki remain independent, called Community Aging in Place: Advancing Better Living for Elders, or CAPABLE, has been around for 15 years and is offered in about 65 places across 26 states. It helps people 60 and up, and some younger people with disabilities or limitations, who want to remain at home but have trouble with activities like bathing, dressing, or moving around safely. Several published studies have found the program saves money and prevents falls, which the Centers for Disease Control and Prevention says contribute to the deaths of 41,000 older Americans and cost Medicare about $50 billion each year.
Despite evidence and accolades, CAPABLE remains small, serving roughly 4,600 people to date. Insurance seldom covers it (although the typical cost of $3,500 to $4,000 per client is less than many health care interventions). Traditional Medicare and most Medicare Advantage private insurance plans don't cover it. Only four states use funds from Medicaid,the federal-state program for low-income and disabled people. CAPABLE gets by on a patchwork of grants from places like state agencies for aging and philanthropies.
The payment obstacles are an object lesson in how insurers, including Medicare, are built around paying for doctors and hospitals treating people who are injured or sick — not around community services that keep people healthy. Medicare has billing codes for treating a broken hip, but not for avoiding one, let alone for something like having a handy person "tack down loose carpet near stairs."
And while keeping someone alive longer may be a desirable outcome, it's not necessarily counted as savings under federal budget rules. A 2017 Centers for Medicare & Medicaid Services evaluation found that CAPABLE had high satisfaction rates and some savings. But its limited size made it hard to assess the long-term economic impact.
It's unclear how the Trump administration will approach senior care.
The barriers to broader state or federal financing are frustrating, said Sarah Szanton, who helped create CAPABLE while working as a nurse practitioner doing home visits in west Baltimore. Some patients struggled to reach the door to open it for her. One tossed keys to her out of a second-story window, she recalled.
Seeking a solution, Szanton discovered a program called ABLE, which brought an occupational therapist and a handy worker to the home. Inspired by its success, Szanton developed CAPABLE, which added a nurse to check on medications, pain, and mental well-being, and do things like help participants communicate with doctors. It began in 2008. Szanton since 2021 has been the dean of Johns Hopkins University School of Nursing, which coordinates research on CAPABLE. The model is participatory, with the client and care team "problem-solving and brainstorming together," said Amanda Goodenow, an occupational therapist who worked in hospitals and traditional home health before joining CAPABLE in Denver, where she also works for the CAPABLE National Center, the nonprofit that runs the program.
CAPABLE doesn't profess to fix all the gaps in U.S. long-term care, and it doesn't work with all older people. Those with dementia, for example, don't qualify. But studies show it does help participants live more safely at home with greater mobility. And one study that Szanton co-authored estimated Medicare savings of around $20,000 per person would continue for two years after a CAPABLE intervention.
"To us, it's so obvious the impact that can be made just in a short amount of time and with a small budget," said Amy Eschbach, a nurse who has worked with CAPABLE clients in the St. Louis area, where a Medicare Advantage plan covers CAPABLE. That St. Louis program caps spending on home modifications at $1,300 a person.
Both Hill staff and CMS experts who have looked at CAPABLE do see potential routes to broader coverage. One senior Democratic House aide, who asked not to be identified because they were not allowed to speak publicly, said Medicare would have to establish careful parameters. For instance, CMS would have to decide which beneficiaries would be eligible. Everyone in Medicare? Or only those with low incomes? Could Medicare somehow ensure that only necessary home modifications are made — and that unscrupulous contractors don't try to extract the equivalent of a "copay" or "deductible" from clients?
Szanton said there are safeguards and more could be built in. For instance, it's the therapists like Goodenow, not the handy workers, who put in the work orders to stay on budget.
For Tsubaki, whose books are not only shelved but organized by topic, the benefits have endured.
"I became more independent. I'm able to handle most of my activities. I go shopping, to the library, and so forth," he said. His pace is slow, he acknowledged. But he gets there.
Kenen is the journalist-in-residence and a faculty member at Johns Hopkins University School of Public Health. She is not affiliated with the CAPABLE program.
A growing number of states have made it easier for doctors who trained in other countries to get medical licenses, a shift supporters say could ease physician shortages in rural areas.
The changes involve residency programs — the supervised, hands-on training experience that doctors must complete after graduating medical school. Until recently, every state required physicians who completed a residency or similar training abroad to repeat the process in the U.S. before obtaining a full medical license.
Since 2023, at least nine states have dropped this requirement for some doctors with international training, according to the Federation of State Medical Boards. More than a dozen other states are considering similar legislation.
About 26% of doctors who practice in the U.S. were born elsewhere, according to the Migration Policy Institute. They need federal visas to live in the U.S., plus state licenses to practice medicine.
Proponents of the new laws say qualified doctors shouldn't have to spend years completing a second residency training. Opponents worry about patient safety and doubt the licensing change will ease the doctor shortage.
Lawmakers in Republican- and Democratic-leaning states have approved the idea at a time when many other immigration-related programs are under attack. They include Florida, Iowa, Idaho, Illinois, Louisiana, Massachusetts, Tennessee, Virginia, and Wisconsin.
President Donald Trump has defended a federal visa program that many foreign doctors rely on, but they could still be hampered by his broad efforts to tighten immigration rules.
Supporters of the new licensing laws include Zalmai Afzali, an internal medicine doctor who finished medical school and a residency program in Afghanistan before fleeing the Taliban and coming to the U.S. in 2001.
He said most physicians trained elsewhere would be happy to work in rural or other underserved areas.
"I would go anywhere as long as they let me work," said Afzali, who now treats patients who live in rural areas and small cities in northeastern Virginia. "I missed being a physician. I missed what I did."
It took Afzali 12 years to obtain copies of his diploma and transcript, study for exams, and finish a three-year U.S.-based residency program before he could be fully licensed to practice as a doctor in his new country.
But a commission of national health organizations questions whether loosening residency requirements for foreign-trained doctors would ease the shortage. Doctors in these programs could still face licensing and employment barriers, it wrote in a report that makes recommendations without taking a stance on such legislation.
Erin Fraher, a health policy professor at the University of North Carolina who advises the commission and studies the issue, said lawmakers who support the changes predict they will boost the rural health workforce. But it's unclear whether that will happen, she said, because the programs are just getting started.
"I think the potential is there, but we need to see how this pans out," Fraher said.
Afzali struggled to support his family while trying to get his medical license. His jobs included working at a department store for $7.25 an hour and administering chemotherapy for $20 an hour. Afzali said nurse practitioners at the latter job had less training than him but earned nearly four times as much.
"I do not know how I did it," he said. "I mean, you get really depressed."
Many of the state bills to ease residency requirements have been based on model legislation from the Cicero Institute, a conservative think tank that sent representatives to testify to legislatures after proposing such programs in 2020.
The new pathways are open only to internationally trained physicians who meet certain conditions. Common requirements include working as a physician for several years after graduating from a medical school and residency program with similar rigor to those found in the U.S. They also must pass the standard three-part exam that all physicians take to become licensed in the U.S.
Those who qualify are granted a restricted license to practice, and most states require them to do so under supervision of another physician. They can receive full licensure after several years.
About 10 of the laws or bills also require the doctors to work for several years in a rural or underserved area.
But states without this requirement, such as Tennessee, may not see an impact in rural areas, researchers from Harvard Medical School and Rand Corp. argued in the New England Journal of Medicine. In addition to including that condition, states could offer incentives to rural hospitals that agree to hire doctors from the new training pathways, they wrote.
Lawmakers, physicians, and health organizations that oppose the changes say there are better ways to safely increase the number of rural doctors.
Barbara Parker is a registered nurse and former Republican lawmaker in Arizona, where the legislature is considering a bill for at least the fourth year in a row.
"It's a really poor answer to the doctor shortage," said Parker, who voted against the legislation last year.
Parker said making it easier for foreign-trained physicians to practice in the U.S. would unethically poach doctors from countries with greater health care needs. And she said she doubts that all international residencies are on par with those in the U.S. and worries that granting licenses to physicians who trained in them could lead to poor care for patients.
She is also concerned that hospitals are trying to save money by recruiting internationally trained doctors over those trained in the U.S. The former often will accept lower pay, Parker said.
"This is driven by corporate greed," she said.
Parker said better ways to increase the number of rural doctors include raising pay, expanding loan repayment programs for those who practice in rural areas, and creating accelerated training for nurse practitioners and physician assistants who want to become doctors.
The advisory commission — recently formed by the Federation of State Medical Boards, the Accreditation Council for Graduate Medical Education, and Intealth, a nonprofit that evaluates international medical schools and their graduates — published its recommendations to help lawmakers and medical boards make sure these new pathways are safe and effective.
The commission and Fraher said state medical boards should collect data on the new rules, such as how many doctors participate, what their specialties are, and where they work once they gain their full licenses. The results could be compared with other methods of easing the rural doctor shortage, such as adding residency programs at rural hospitals.
"What is the benefit of this particular pathway relative to other levers that they have?" Fraher said.
The commission noted that while state medical boards can rely on an outside organization that evaluates the strength of foreign medical schools, there isn't a similar rating for residency programs. Such an effort is expected to launch in mid-2025, the commission said.
The group also said states should require supervising physicians to evaluate participants before they're granted a full license.
Afzali, the physician from Afghanistan, said some internationally trained primary care doctors have more training than their U.S. counterparts, because they had to practice procedures that are done only by specialists in the U.S.
But he agreed with the commission's recommendation that states require doctors who did residencies abroad to have supervision while they hold a provisional license. That would help ensure patient safety while also helping the physicians adjust to cultural differences and learn the technical side of the U.S. health system, such as billing and electronic health records, the commission wrote.
Fraher noted that doctors in programs with supervision requirements need to find an experienced colleague with the time and interest in providing this oversight at a health facility willing to hire them.
The commission pointed out other potential hurdles, such as malpractice insurers possibly declining to cover physicians who obtain state licenses without completing a U.S. residency. The commission and the American Board of Medical Specialties also pointed to the issue of specialty certification, which is managed by national organizations that have their own residency requirements.
Physicians who aren't eligible to take board exams could lose out on employment opportunities, and patients might have concerns about their qualifications, the board wrote. But it said a majority of its member boards would consider certifying these doctors if states added requirements it recommended.
Lawmakers' plans to use these new licensing pathways to increase the number of rural doctors will require the foreign-trained doctors to navigate all these obstacles and unknowns, Fraher said.
"There's a lot of things that need to happen to make this a reality," she said.
Jagdish Whitten was on a run in July 2023 when a car hit him as he crossed a busy San Francisco street. Whitten, then 25, described doing "a little flip" over the vehicle and landing in the street before getting himself to the curb.
Concerned onlookers called an ambulance. But Whitten instead had friends pick him up and take him to a nearby hospital, the Helen Diller Medical Center, operated by the University of California-San Francisco.
"I knew that ambulances were expensive, and I didn't think I was going to die," he said.
Whitten said doctors treated him for a mild concussion, a broken toe, and bruises.
As he sat in a hospital bed, attached to an IV and wearing a neck brace, Whitten said, doctors told him that because he had suffered a traumatic injury, they had to send him by ambulance to the city's only trauma center, Zuckerberg San Francisco General Hospital.
After a short ambulance ride, Whitten said, emergency room doctors checked him out, told him he had already received appropriate treatment, and released him.
Then the bill came.
The Medical Procedure
Traumatic injuries are those that threaten life or limb, and some facilities specialize in providing care for them. For someone hit by a car, that can include stabilizing vital signs, screening for internal injuries, and treating broken bones and concussions. Zuckerberg Hospital is a Level 1 trauma center, meaning it can provide any care needed for severely injured patients.
In emergency medicine, it is standard to transfer patients to centers best equipped to provide care. Ambulances are typically used for transfers because they are able to handle trauma patients, with tools to aid in resuscitation, immobilization, and life support.
At the first hospital, Whitten said, doctors performed a thorough workup, including a CT scan and X-rays, and advised him to follow up with his primary care physician and an orthopedic doctor. He was evaluated at the second hospital and released without additional treatment, he said.
The Final Bill
$12,872.99 for a 6-mile ambulance ride between hospitals: a $11,670.11 base rate, $737.16 for mileage, $314.45 for EKG monitoring, and $151.27 for "infection control."
The Billing Problem: Surprise Bills Are Common With Ground Ambulances
Ground ambulance services are operated by a hodgepodge of private and public entities — with no uniform structure, or regulatory oversight, for billing — and most function outside insurance networks. Patients don't typically have a choice of ambulance provider.
There are state and federal laws shielding patients from out-of-network ambulance bills, but none of those protections applied in Whitten's case.
Whitten was insured under his father's employer-sponsored health plan from Anthem Blue Cross. So when he received a nearly $13,000 bill months after his short transfer ride, he sent a photo of it to his dad.
Brian Whitten said the bills from the two hospitals — and the family's out-of-pocket responsibility — were in line with what he had anticipated. But he was stunned by his son's ambulance bill from AMR, one of the nation's largest ambulance providers. Anthem Blue Cross denied the claim, saying the ambulance was out-of-network and required pre-authorization.
"It didn't make a whole lot of sense to me, because the doctor is the one who put him in the ambulance," Brian Whitten said. "It's not like somehow he just decided, ‘Hey, can I take an ambulance ride?'"
Kristen Bole, a UCSF spokesperson, said in a statement that the health system's standard of care is to stabilize patients and, when appropriate, transfer them to other medical facilities that are most appropriate to care for patients' needs, adding that ambulance transfers between hospitals are standard practice.
While the medical system at large relies on negotiated prices for services, ambulance services operate largely outside of the competitive marketplace, said Patricia Kelmar, senior director of health care campaigns for PIRG, a nonpartisan consumer protection and good-government advocacy organization.
Ambulance transfers between hospitals to ensure the highest quality of care available are fairly common, Kelmar said. And with many hospitals being purchased and consolidated, it would follow that the number of ambulance transfers between facilities could increase as specialized medical units at any given hospital are downsized or eliminated, she said.
According to a study of private insurance claims data conducted in 2023, about 80% of ground ambulance rides resulted in out-of-network billing.
Generally, out-of-network providers may charge patients for the remainder of their bill after insurance pays. In some cases, patients can be on the hook even when they did not knowingly choose the out-of-network provider. These bills are known as "surprise" bills.
"It's a financial burden, a significant financial burden," said Kelmar, who is a member of the committee created to advise federal lawmakers on surprise bills and emergency ambulance transportation.
Eighteen states have implemented laws regulating surprise ambulance billing. A California law cracking down on surprise ambulance billing took effect on Jan. 1, 2024 — months after Jagdish Whitten's ambulance ride.
But Kelmar said those state laws don't really help people with employer-sponsored insurance, because those plans are beyond state control — which is why federal legislation is so important, she said.
As of 2022, federal law protects patients from receiving some surprise bills, especially for emergency services. But while lawmakers included protections against air ambulance bills in the law, known as the No Surprises Act, they excluded ground ambulance transports.
The Resolution
Whitten's father filed an insurance appeal on his son's behalf, which Anthem granted. The insurer paid AMR $9,966.60.
Michael Bowman, a spokesperson for Anthem, said AMR had not submitted all the information it required to process the claim, leading to the initial denial. After consulting with AMR, Anthem paid its coverage amount, Bowman said.
But the insurer's payment still left Whitten with a $2,906.39 bill for his out-of-network ambulance ride. Brian Whitten said he called an AMR customer service number several times to contest the remaining charges but was unable to bypass its automated system and speak with a human.
"I couldn't find a way to talk to somebody about this bill other than how to pay it, and I didn't want to pay it," he said.
Unsuccessful and frustrated, Brian Whitten paid the remaining bill in January 2024, he said, concerned it would be turned over to a collection agency and hurt his son's credit — and his well-being.
There was one more twist: He was shocked when he later reviewed his credit card statements and discovered that AMR had quietly but fully refunded his payment in October.
"It's amazing that he got his money back," Kelmar said. "That's what's shocking."
In a statement, Suzie Robinson, vice president of revenue cycle management with AMR, said the company's third-party billing agency regularly performs audits to ensure accuracy. An audit of Jagdish Whitten's bill "revealed that the care provided did not meet the criteria for critical care," Robinson said, which prompted the full refund.
Robinson said audits indicated fewer than 1% of its 4 million medical encounters annually are billed incorrectly.
The Takeaway
Robinson said patients who feel that AMR has billed them incorrectly should contact the company via email.
For patients in need of an ambulance in an emergency, there are few protections — and usually few options: Sometimes you don't have a better choice than to get in.
Federal protections require that health plans cover certain surprise bills, with patients paying only what they would if they had received in-network care. Expanding those protections to ground ambulance bills would require Congress to act.
Ambulance providers deserve to be appropriately compensated for their vital role in our medical system, Kelmar said. But the system as it stands almost incentivizes providers to charge a higher rate, which can lead to surprise billing and financial hardship for patients and their families, she said.
Kelmar said she worries not just about the debt those bills create for consumers but also that people may decline vital ambulance transportation in an emergency, for fear of getting hit with an exorbitant bill.
"We just need to bring some sense back to the system," she said.
Bill of the Month is a crowdsourced investigation by KFF Health News and The Washington Post's Well+Being that dissects and explains medical bills. Since 2018, this series has helped many patients and readers get their medical bills reduced, and it has been cited in statehouses, at the U.S. Capitol, and at the White House. Do you have a confusing or outrageous medical bill you want to share? Tell us about it!
The lobby at this St. John's Community Health clinic in South Los Angeles bustles with patients. But community health worker Ana Ruth Varela is worried that it's about to get a lot quieter. Many patients, she said, are afraid to leave their homes.
"The other day I spoke with one of the patients. She said: 'I don't know. Should I go to my appointment? Should I cancel? I don't know what to do.' And I said, 'Just come.'"
Since Donald Trump's return to the White House, fear of mass deportations carried out by U.S. Immigration and Customs Enforcement has gripped immigrant communities.
For years, a long-standing policy prevented federal immigration agents from making arrests at or near sensitive locations, including schools, places of worship, hospitals, and health centers. It was one of the first policies Trump rolled back in January, just hours after his inauguration.
Acting Department of Homeland Security Secretary Benjamine Huffman revoked the directive on Jan. 21. In an accompanying press release, a DHS spokesperson said the action would assist agents searching for immigrants who have committed crimes. "The Trump Administration will not tie the hands of our brave law enforcement, and instead trusts them to use common sense," the statement said.
The speed of the change took Darryn Harris by surprise.
"I thought we had more time," said Harris, chief government affairs and community relations officer for St. John's.
Harris is racing to teach more than 1,000 St. John's workers how to read warrants as they train for a new role — teaching patients their constitutional rights.
California Attorney General Rob Bonta, a Democrat, is advising clinics to post information about patients' right to remain silent and to provide patients with contact information for legal-aid groups.
Bonta is also urging health care providers to avoid including patients' immigration status in bills and medical records. His office directs that while staff should not physically obstruct immigration agents, they are under no obligation to assist with an arrest.
Even though immigration arrests took place in hospitals during Trump's first term, the overall policy was still one of deference to "sensitive locations." Now, however, DHS states that the previous rules hindered law enforcement efforts by creating sites where people without legal status could evade capture.
Matt Lopas, director of state advocacy and technical assistance for the National Immigration Law Center, said that in order for immigration officers to access health information or go into private spaces such as exam rooms, they must present a warrant signed by a judge.
"It's incredibly important that every health care center has somebody who is trained to be able to read those warrants" and determine their validity, Lopas said.
In the San Francisco Bay Area, Zenaida Aguilera has been tapped to read warrants for La Clínica de La Raza. She is the compliance, privacy, and risk officer for the clinic network. If immigration agents show up, she's on call for all 31 of the organization's community clinics.
Aguilera is also now in charge of training hundreds of health staffers. She has trained about 250 thus far, but the majority of that work is yet to come.
"We have about, probably, a thousand more staff," she said.
She fears the Trump administration will target California for immigration enforcement because of its approximately 2 million residents without legal status, the highest of any state, according to the Pew Research Center. In 2022, 11 million people were in the U.S. without authorization.
Aguilera said La Clínica plans to post patients' constitutional rights in clinic lobbies and will provide resources such as contact information for legal-aid groups.
"We would like to just do the work of caring for our patients rather than train our staff on what to do if there's an ICE official that tries to come into our clinics," Aguilera said.
This article is from a partnership that includes NPR and KFF Health News.
HELENA, Mont. — Despite concerns about what Congress and the Trump administration might have planned for Medicaid, Montana's Republican-led legislature and GOP governor appear ready to keep the state's Medicaid expansion program in place beyond its scheduled end date this summer.
State lawmakers don't have the luxury of waiting until the federal picture sharpens. They must decide before the session ends in early May whether to lift a June 30 sunset date for the expansion program, which covers about 76,000 adults.
However, the likelihood that significant changes lie ahead for the joint federal-state Medicaid program has spurred discussion of whether legislators should — or can — prepare for what may be coming. That's the challenge for lawmakers this session, said Republican state Rep. Jane Gillette during a recent meeting of the budget subcommittee she chairs that works on the Medicaid budget.
"What are the different options we have for bracing ourselves for that?" Gillette said.
The U.S. House is working on a budget bill to reflect President Donald Trump's priorities, including allocating up to $4.5 trillion to extend tax cuts that would otherwise expire.
A plan passed by the House Budget Committee on Feb. 13 calls for $880 billion in cuts over the next 10 years for the committee that oversees, among other things, Medicaid spending. Ideas reportedly under discussion include federal work requirements for some Medicaid enrollees and a decrease in the share of costs the federal government pays for people covered by the expansion program.
Some of the proposals would shift significant costs to the states, noted Robin Rudowitz, a vice president and the director of the Program on Medicaid and the Uninsured at KFF, a health information nonprofit that includes KFF Health News. If that happens, states will need to raise revenue or cut spending elsewhere to continue the same level of Medicaid coverage, she said.
There are "no easy answers or options for states in these scenarios," she said.
The GOP-controlled Montana House of Representatives easily passed a bill to make the Medicaid expansion program permanent on Feb. 10 by a 63-37 vote. Then on Feb. 20, House Bill 245 passed the first of two votes required for Senate approval. Gov. Greg Gianforte has not publicly said whether he would sign the bill, but he previously said he believes the expansion program should continue if strong work requirements are in place.
In late January, the budget subcommittee that Gillette chairs was reviewing Medicaid expansion's financial implications when talk quickly turned to the possible federal changes, particularly a drop in the federal matching rate.
Republican state Sen. Carl Glimm noted that observers have called a lower federal matching rate "pretty low-hanging fruit." The change would require congressional action, though, and members noted that could take time.
The federal government pays 90% of the health care costs of expansion enrollees. That group is made up of adults ages 19 to 64 without disabilities and who have annual incomes at or below 138% of the federal poverty level, or $21,597 for an individual.
Until the federal Affordable Care Act allowed states to extend Medicaid to this group, the program was generally limited to low-income children, pregnant women, and adults who are blind, disabled, or at least 65. The federal match for those groups in Montana will be about 62% in the next state fiscal year, which begins in July.
The state spent nearly $1 billion on Medicaid expansion in 2024, with its share of the costs totaling just under $100 million. Budget committee staff said a 10% reduction in the federal share would add roughly $100 million in state costs. If the state's share goes from 10% to the regular state match of 38%, the state would pay about $280 million more a year for expansion.
Subcommittee member Russ Tempel, a Republican senator, noted that the federal share changed in the past due to unexpected events, such as covid-19.
"Something's going to happen that's unpredictable," he said. "It's happened before, and it's going to happen again, so we're kind of a little bit shooting in the dark."
But Republican Sen. Jeremy Trebas focused on the likely federal changes when urging senators to support his bill to tighten the work requirements in current law and, if federal approval were denied, eventually end the program.
"We should match up our state policy to coming federal policy so that we're not caught off guard and expectations aren't radically altered by what the federal government does," he said during a committee hearing on Senate Bill 199.
The bill died last week on the Senate floor when all Democrats voted against it, along with a block of nine Republicans who have broken with their party on other issues this session. Roughly the same coalition also killed a bill by Glimm that would have phased out the expansion.
Trebas said recently he expects HB 245 to pass but also believes that federal Medicaid changes could happen more quickly than some think possible, forcing a special Montana legislative session to adjust to those changes.
Gillette, who voted against HB 245, said in a recent interview that the legislature should provide the Gianforte administration with a range of options to allow it to "course correct" without further legislative involvement if Medicaid expansion continues and federal changes come down before the legislature meets again in 2027.
State Senate President Matt Regier introduced a bill Feb. 15 to limit the expansion population to people below 100% of the federal poverty level and to give the state health agency the ability to limit spending or improve program integrity.
Regier's bill also would make the expansion program contingent on the federal government approving a "community engagement" waiver, which includes work requirements, and it calls for lawmakers to vote on whether to hold a special session if the federal Medicaid matching rate drops more than three months before the next regular session.
But HB 245 sponsor Rep. Ed Buttrey, another Republican, said in a recent interview that existing law takes care of any future decrease in federal support by requiring either the state to increase premiums for the program or the legislature to appropriate additional funds if the program is to continue.
Buttrey also said the legislature can't make decisions now based on what federal law might be in the future. He said it's unlikely that federal Medicaid policy would change quickly, but that if it did, the program affects such a large percentage of the state's population that a special session would be warranted.
"I can't think of one that's more important than that," he said.
Republicans, who narrowly control Congress, are pushing proposals that could sharply cut funding to the government health insurance program for poor and disabled Americans, as a way to finance President Donald Trump's agenda for tax cuts and border security.
Democrats, hoping to block the GOP's plans and preserve Medicaid funding, are rallying support from hospitals, governors, and consumer advocates.
At stake is coverage for roughly 79 million people enrolled in Medicaid and its related Children's Health Insurance Program. So, too, is the financial health of thousands of hospitals and community health centers — and a huge revenue source to all states.
On Feb. 13, the House Budget Committee voted to seek at least $880 billion in mandatory spending cuts on programs overseen by the House Energy and Commerce Committee. That committee oversees Medicaid, which is expected to bear much of the cuts.
Senate Republicans, working on their own plan, have not proposed similar deep cuts. Sen. Ron Wyden of Oregon, the Finance Committee's top Democrat, said he expects "an effort to keep the Medicaid cuts hidden behind the curtain, but they're going to come sooner or later."
Since Trump took office, Republicans in Washington have discussed making changes to Medicaid, particularly by requiring that enrollees prove they are working. Because most enrollees already work, go to school, or serve as caregivers or have a disability, critics say such a requirement would simply add red tape to obtaining coverage, with little impact on employment.
Other GOP ideas that could gain traction toward meeting budget-cutting goals include reducing the federal government's share of costs for certain enrollees or for the program overall.
Both Trump and House Speaker Mike Johnson say they are only trying to cut what they describe as "waste, fraud, and abuse" in the program, but have yet to offer examples or specifics.
Trump has said he would "love and cherish" Medicaid along with Medicare. During a Fox News interview that aired Feb. 18, Trump repeated his assurance that Medicaid, along with Social Security and Medicare, was not "going to be touched."
Known as the workhorse of the U.S. health system, Medicaid covers Americans from the beginning of life to the end — paying for 4 in 10 births and care costs for more than 60% of nursing home residents. The program operates as a state-federal partnership, with the federal government paying most of the money and matching state funds regardless of how many people enroll.
Medicaid, which turns 60 this summer, was created as part of President Lyndon B. Johnson's "Great Society" strategy to attack poverty along with Medicare, the federal health insurance program for people 65 and older.
In today's era of extreme partisanship on Capitol Hill, few topics highlight the ideological chasm between the major political parties better than Medicaid.
Unlike Democrats who view Medicaid as a way to ensure health care is affordable and accessible regardless of income, many Republicans in Washington see Medicaid as a broken and wasteful welfare program that's grown too big and covers millions of adults who don't deserve the government assistance. Many Republicans in Congress say "able-bodied" adults could get coverage from a job or by purchasing insurance on their own.
Nearly all Republicans opposed the 2010 Affordable Care Act, which expanded Medicaid by offering coverage to millions of low-income adults and helped edge the country closer to Democrats' long-sought goal of all Americans having health coverage. In exchange for expanding Medicaid, the federal government offered states a larger funding match to cover those individuals.
But while most Republican-controlled states accepted the federal expansion dollars — some only after voters approved ballot initiatives in favor of Medicaid expansion — GOP leaders in Congress have remained steadfastly against the program's growth.
When Republicans last controlled Congress and the White House, the party sought big cuts to Medicaid as part of efforts in 2017 to repeal and replace the ACA. That campaign failed by a razor-thin margin, partly due to concerns from some congressional Republicans over how it would harm Medicaid and the private industry of health plans and hospitals that benefit from it.
Now, a more conservative GOP caucus has again put a bull's-eye on Medicaid's budget, which has grown by at least $300 billion in eight years due largely to the covid pandemic and the decision by more states to expand Medicaid. The House budget plan seeks to free up $4.5 trillion to renew Trump's 2017 tax cuts, which expire at the end of this year.
"Medicaid is increasingly caught in the middle of partisan polarization in Washington," said Jonathan Oberlander, a health policy professor at the University of North Carolina and the editor of the Journal of Health Politics, Policy and Law. "This is not just resistance to the ACA's Medicaid expansion; it is a broader change in the politics of Medicaid that puts the program in a more precarious place."
Medicaid presents a tempting target for Republicans for several reasons beyond its sheer size, Oberlander said. "The first is fiscal arithmetic: They need Medicaid savings to help pay for the costs of extending the 2017 tax cuts," he said, noting Trump has taken off the table cuts to Medicare, Social Security, and national defense — the other most costly government programs.
The GOP cuts would also help scale back the program, which covered 93 million people at its apex during the covid pandemic, when states were prohibited for three years from terminating coverage for any enrollee. Oberlander said the cuts also would allow Republicans to strike a blow against the ACA, often called Obamacare.
Republicans' latest revamping effort comes as Medicaid expansion has become entrenched in most states — and their budgets — over the past decade. Without federal expansion dollars, states would struggle to afford coverage for low-income people on the program without raising taxes, cutting benefits, or slashing spending on other programs such as education.
And since Trump's first-term effort to cut Medicaid, additional red states such as Utah, Oklahoma, Idaho, and Missouri have expanded the program, helping drop the nation's uninsured rate to a record low in recent years.
Medicaid is popular. About 3 in 4 Americans view the program favorably, according to a January 2025 KFF poll. That's similar to polling from 2017.
Here are a few strategies the GOP reportedly is considering to reduce the size of Medicaid:
Cutting ACA Medicaid funding. Through Medicaid expansion, the ACA provided financing for the program to cover adults with incomes up to 138% of the federal poverty level, or $21,597 for an individual. The federal government pays 90% of the cost for adults covered through the expansion, which 40 states and Washington, D.C., have adopted. The GOP could lower that funding to the same match rate the federal government pays states for everyone else in the program, which averages about 60%.
Shifting to block or per capita grants. Either of these two proposals could lower federal funding for states to operate Medicaid while giving states more discretion over how to spend the money. Annual block grants would give states a set amount, regardless of the number of enrollees. Per capita grants would pay the states based on the number of enrollees in each state. Currently, the federal government matches a certain percentage of state spending each year with no cap. Limiting the federal funding would hamper Medicaid's ability to help states during difficult economic times, when demand for coverage rises with falling employment and incomes, while states also have fewer tax dollars to spend.
Adding work requirements. Republicans in Washington are looking to insert work requirements into federal law. During Trump's first term, his administration allowed several states to condition coverage for adults on whether they were working, unless they met exemptions such as caregiving or going to school. Arkansas became the first to implement the measure, leading to 18,000 people losing coverage there. Federal judges ruled in 2018 that Medicaid law does not allow for work requirements in the program, which stopped efforts by Trump and several states to impose them in his first term. Several states are taking steps to add a requirement, including Ohio and Montana.
Lawrence Jacobs, founder and director of the University of Minnesota's Center for the Study of Politics and Governance, said Republicans will face challenges within their own ranks to make major Medicaid cuts, noting House members may be hesitant to cut Medicaid if warned it could lead to hospital closures in their district.
America's Essential Hospitals, a trade group representing safety-net hospitals that treat the disadvantaged, is encouraging its members to reach out to their lawmakers to make sure they know not only the cuts' potential impact on patients, but also how they could lead to job cuts and service reductions affecting entire communities.
"The level of cuts being discussed would be incredibly damaging and catastrophic for our hospitals," said Beth Feldpush, the group's senior vice president of policy and advocacy.
Said Jacobs: "The politics of cutting Medicaid is really quite fraught, and it's hard to make a prediction about what will happen at this point."
We'd like to speak with current and former personnel from the Department of Health and Human Services or its component agencies who believe the public should understand the impact of what's happening within the federal health bureaucracy. Please message KFF Health News on Signal at (415) 519-8778 or get in touch here.
When Colleen Henderson's 3-year-old daughter complained of pain while using the bathroom, doctors brushed it off as a urinary tract infection or constipation, common maladies in the potty-training years.
After being told her health insurance wouldn't cover an ultrasound, Henderson charged the $6,000 procedure to her credit card. Then came the news: There was a grapefruit-sized tumor in her toddler's bladder.
That was in 2009. The next five years, Henderson said, became a protracted battle against her insurer, UnitedHealthcare, over paying for the specialists who finally diagnosed and treated her daughter's rare condition, inflammatory pseudotumor. She appealed uncovered hospital stays, surgeries, and medication to the insurer and state regulators, to no avail. The family racked up more than $1 million in medical debt, she said, because the insurer told her treatments recommended by doctors were unnecessary. The family declared bankruptcy.
"If I had not fought tooth and nail every step of the way, my daughter would be dead," said Henderson, of Auburn, California, whose daughter eventually recovered and is now a thriving 20-year-old junior at Oregon State University. "You pay a lot of money to have health insurance, and you hope that your health insurance has your well-being at the forefront, but that's not happening at all."
While insurance denials are on the rise, surveys show few Americans appeal them. Unlike in Henderson's case, various analyses have found that many who escalate complaints to government regulators successfully get denials overturned. Consumer advocates and policymakers say that's a clear sign insurance companies routinely deny care they shouldn't. Now a proposal in the California Legislature seeks to penalize insurers who repeatedly make the wrong call.
While the measure, SB 363, would cover only about a third of insured Californians whose health plans are regulated by the state, experts say it could be one of the boldest attempts in the nation to rein in health insurer denials — before and after care is given. And California could become one of only a handful of states that require insurers to disclose denial rates and reasoning, statistics the industry often considers proprietary information.
The measure also seeks to force insurers to be more judicious with denials and would fine them up to $1 million per case if more than half of appeals filed with regulators are overturned in a year.
In 2023, state data show, about 72% of appeals made to the Department of Managed Health Care, which regulates the vast majority of health plans, resulted in an insurer's initial denial being reversed.
"When you have health insurance, you should have confidence that it's going to cover your health care needs," said Sen. Scott Wiener, the San Francisco Democrat who introduced the bill. "They can just delay, deny, obstruct, and, in many cases, avoid having to cover medically necessary care, and it's unacceptable."
A spokesperson for the California Association of Health Plans declined to comment, saying the group was still reviewing the bill language. Gov. Gavin Newsom's spokesperson Elana Ross said his office generally does not comment on pending legislation.
Concerned about spiraling consumer health costs, state lawmakers across the nation have increasingly looked for ways to verify that insurers are paying claims fairly.
In 2024, 17 states enacted legislation dealing with prior authorization of care by private insurers, according to the National Conference of State Legislatures. Connecticut, which has one of the most robust denial rate disclosure laws, publishes an annual report card detailing the number and percentage of claims each insurer has denied, as well as the share that ends up getting reversed. Oregon published similar information until recently, when state disclosure requirements lapsed.
In California, there's no way to know how often insurers deny care, which health experts say is especially troubling as mental health care is reaching crisis levels among children and young adults. According to Keith Humphreys, a health policy professor at Stanford University, it's easier to deny mental health care because a diagnosis of, say, depression can be more subjective than that of a broken limb or cancer.
"We think it's unacceptable that the state has absolutely no idea how big of a problem this is," said Lishaun Francis, senior director of behavioral health for the advocacy group Children Now, a sponsor of the bill.
Under Wiener's proposal, private insurers regulated by the Department of Managed Health Care and the Department of Insurance would be required to submit detailed data about denials and appeals. They would also need to explain those denials and report the outcomes of the appeals.
For appeals that make it to the state's independent medical review process, known as IMR, insurers whose denials are overturned more than half the time would face staggering penalties. The first case that brings a company above the 50% threshold would trigger a fine of $50,000, with a penalty ranging from $100,000 to $400,000 for a second. Each one after that would cost $1 million.
If passed, the measure would cover roughly 12.8 million Californians on private insurance. It would not apply to patients on Medi-Cal, the state's Medicaid program, or Medicare, and it would exclude self-insured plans offered by large employers, which are regulated by the U.S. Department of Labor and cover roughly 5.6 million Californians.
The phrase "deny and delay" continues to reverberate across the health care industry after the killing of UnitedHealthcare CEO Brian Thompson. A survey by NORC at the University of Chicago released shortly after the brazen attack revealed that 7 in 10 people said they believed denials for health coverage and profits by health insurance companies bore a great deal or a moderate amount of responsibility for Thompson's death.
Wiener called Thompson's killing a "cold-blooded assassination" but said his bill grew out of a narrower proposal that failed last year aimed at improving mental health coverage for children and adults under age 26. But he acknowledged the nation's reaction to the killing underscores the long-simmering anger many Americans feel about health insurers' practices and the urgent need for reform.
Humphreys, the Stanford professor, said the U.S. health system creates strong financial incentives for insurers to deny care. And, he added, state and federal penalties are paltry enough to be written off as a cost of doing business.
"The more care they deny, the more money they make," he said.
Increasingly, large employers are starting to include language in contracts with claim administrators that would penalize them for approving too many or too few claims, said Shawn Gremminger, president of the National Alliance of Healthcare Purchaser Coalitions.
Gremminger represents mostly large employers who fund their own insurance, are federally regulated, and would be excluded from Wiener's bill. But even for such so-called self-funded plans, it can be nearly impossible to determine denial rates for the insurance companies hired simply to administer claims, he said.
While it could be too late for many families, Sandra Maturino, of Rialto, said she hopes lawmakers tackle insurance denials so other Californians can avoid the saga she endured to get her niece treatment.
She adopted the girl, now 13, after her sister died. Her niece had long struggled with self-harm and violent behavior, but when therapists recommended inpatient psychiatric care, her insurer, Anthem Blue Cross, would cover it for only 30 days.
For more than a year, Maturino said, her niece cycled in and out of facilities and counseling because her insurance wouldn't cover a long-term stay. Doctors tested a laundry list of prescription drugs and doses. None of it worked.
Anthem declined a request for comment.
Eventually, Maturino got her niece into a residential program in Utah, paid for by the adoption agency, where she was diagnosed with bipolar disorder and has been undergoing treatment for a year.
Maturino said she didn't have the energy to appeal to Anthem. "I wasn't going to wait around for the insurance to kill her, or for her to hurt somebody," Maturino said.
McMINNVILLE, Tenn. — Each month, Michelle Shaw went to a pain clinic to get the shots that made her back feel worse — so she could get the pills that made her back feel better.
Shaw, 56, who has been dependent on opioid painkillers since she injured her back in a fall a decade ago, said in both an interview with KFF Health News and in sworn courtroom testimony that the Tennessee clinic would write the prescriptions only if she first agreed to receive three or four "very painful" injections of another medicine along her spine.
The clinic claimed the injections were steroids that would relieve her pain, Shaw said, but with each shot her agony would grow. Shaw said she eventually tried to decline the shots, then the clinic issued an ultimatum: Take the injections or get her painkillers somewhere else.
"I had nowhere else to go at the time," Shaw testified, according to a federal court transcript. "I was stuck."
Shaw was among thousands of patients of Pain MD, a multistate pain management company that was once among the nation's most prolific users of what it referred to as "tendon origin injections," which normally inject a single dose of steroids to relieve stiff or painful joints. As many doctors were scaling back their use of prescription painkillers due to the opioid crisis, Pain MD paired opioids with monthly injections into patients' backs, claiming the shots could ease pain and potentially lessen reliance on painkillers, according to federal court documents.
Now, years later, Pain MD's injections have been proved in court to be part of a decade-long fraud scheme that made millions by capitalizing on patients' dependence on opioids. The Department of Justice has successfully argued at trial that Pain MD's "unnecessary and expensive injections" were largely ineffective because they targeted the wrong body part, contained short-lived numbing medications but no steroids, and appeared to be based on test shots given to cadavers — people who felt neither pain nor relief because they were dead.
Four Pain MD employees have pleaded guilty or been convicted of health care fraud, including company president Michael Kestner, who was found guilty of 13 felonies at an October trial in Nashville, Tennessee. According to a transcript from Kestner's trial that became public in December, witnesses testified that the company documented giving patients about 700,000 total injections over about eight years and said some patients got as many as 24 shots at once.
"The defendant, Michael Kestner, found out about an injection that could be billed a lot and paid well," said federal prosecutor James V. Hayes as the trial began, according to the transcript. "And they turned some patients into human pin cushions."
The Department of Justice declined to comment for this article. Kestner's attorneys either declined to comment or did not respond to requests for an interview. At trial, Kestner's attorneys argued that he was a well-intentioned businessman who wanted to run pain clinics that offered more than just pills. He is scheduled to be sentenced on April 21 in a federal court in Nashville.
According to the transcript of Kestner's trial, Shaw and three other former patients testified that Pain MD's injections did not ease their pain and sometimes made it worse. The patients said they tolerated the shots only so Pain MD wouldn't cut off their prescriptions, without which they might have spiraled into withdrawal.
"They told me that if I didn't take the shots — because I said they didn't help — I would not get my medication," testified Patricia McNeil, a former patient in Tennessee, according to the trial transcript. "I took the shots to get my medication."
In her interview with KFF Health News, Shaw said that often she would arrive at the Pain MD clinic walking with a cane but would leave in a wheelchair because the injections left her in too much pain to walk.
"That was the pain clinic that was supposed to be helping me," Shaw said in her interview. "I would come home crying. It just felt like they were using me."
'Not Actually Injections Into Tendons at All'
Pain MD, which sometimes operated under the name Mid-South Pain Management, ran as many as 20 clinics in Tennessee, Virginia, and North Carolina throughout much of the 2010s. Some clinics averaged more than 12 injections per patient each month, and at least two patients each received more than 500 shots in total, according to federal court documents.
All those injections added up. According to Medicare data filed in federal court, Pain MD and Mid-South Pain Management billed Medicare for more than 290,000 "tendon origin injections" from January 2010 to May 2018, which is about seven times that of any other Medicare biller in the U.S. over the same period.
Tens of thousands of additional injections were billed to Medicaid and Tricare during those same years, according to federal court documents. Pain MD billed these government programs for about $111 per injection and collected more than $5 million from the government for the shots, according to the court documents.
More injections were billed to private insurance too. Christy Wallace, an audit manager for BlueCross BlueShield of Tennessee, testified that Pain MD billed the insurance company about $40 million for more than 380,000 injections from January 2010 to March 2013. BlueCross paid out about $7 million before it cut off Pain MD, Wallace said.
These kinds of enormous billing allegations are not uncommon in health care fraud cases, in which fraudsters sometimes find a legitimate treatment that insurance will pay for and then overuse it to the point of absurdity, said Don Cochran, a former U.S. attorney for the Middle District of Tennessee.
Tennessee alone has seen fraud allegations for unnecessary billing of urine testing, skin creams, and other injections in just the past decade. Federal authorities have also investigated an alleged fraud scheme involving a Tennessee company and hundreds of thousands of catheters billed to Medicare, according to The Washington Post, citing anonymous sources.
Cochran said the Pain MD case felt especially "nefarious" because it used opioids to make patients play along.
"A scheme where you get Medicare or Medicaid money to provide a medically unnecessary treatment is always going to be out there," Cochran said. "The opioid piece just gives you a universe of compliant people who are not going to question what you are doing."
"It was only opioids that made those folks come back," he said.
The allegations against Pain MD became public in 2018 when Cochran and the Department of Justice filed a civil lawsuit against the company, Kestner, and several associated clinics, alleging that Pain MD defrauded taxpayers and government insurance programs by billing for "tendon origin injections" that were "not actually injections into tendons at all."
Kestner, Pain MD, and several associated clinics have each denied all allegations in that lawsuit, which is ongoing.
Scott Kreiner, an expert on spine care and pain medicine who testified at Kestner's criminal trial, said that true tendon origin injections (or TOIs) typically are used to treat inflamed joints, like the condition known as "tennis elbow," by injecting steroids or platelet-rich plasma into a tendon. Kreiner said most patients need only one shot at a time, according to the transcript.
But Pain MD made repeated injections into patients' backs that contained only lidocaine or Marcaine, which are anesthetic medications that cause numbness for mere hours, Kreiner testified. Pain MD also used needles that were often too short to reach back tendons, Kreiner said, and there was no imaging technology used to aim the needle anyway. Kreiner said he didn't find any injections in Pain MD's records that appeared medically necessary, and even if they had been, no one could need so many.
"I simply cannot fathom a scenario where the sheer quantity of TOIs that I observed in the patient records would ever be medically necessary," Kreiner said, according to the trial transcript. "This is not even a close call."
Jonathan White, a physician assistant who administered injections at Pain MD and trained other employees to do so, then later testified against Kestner as part of a plea deal, said at trial that he believed Pain MD's injection technique was based on a "cadaveric investigation."
According to the trial transcript, White said that while working at Pain MD he realized he could find no medical research that supported performing tendon origin injections on patients' backs instead of their joints. When he asked if Pain MD had any such research, White said, an employee responded with a two-paragraph letter from a Tennessee anatomy professor — not a medical doctor — that said it was possible to reach the region of back tendons in a cadaver by injecting "within two fingerbreadths" of the spine. This process was "exactly the procedure" that was taught at Pain MD, White said.
During his own testimony, Kreiner said it was "potentially dangerous" to inject a patient as described in the letter, which should not have been used to justify medical care.
"This was done on a dead person," Kreiner said, according to the trial transcript. "So the letter says nothing about how effective the treatment is."
At the time, Pain MD defended the injections and its practice of discharging patients who declined the shots. When a former patient publicly accused the company of treating his back "like a dartboard," Pain MD filed a defamation lawsuit, then dropped the suit about a month later.
"These are interventional clinics, so that's what they offer," Jay Bowen, a then-attorney for Pain MD, told The Tennessean newspaper in 2019. "If you don't want to consider acupuncture, don't go to an acupuncture clinic. If you don't want to buy shoes, don't go to a shoe store."
Kestner's trial told another story. According to the trial transcript, eight former Pain MD medical providers testified that the driving force behind Pain MD's injections was Kestner himself, who is not a medical professional and yet regularly pressured employees to give more shots.
One nurse practitioner testified that she received emails "every single workday" pushing for more injections. Others said Kestner openly ranked employees by their injection rates, and implied that those who ranked low might be fired.
"He told me that if I had to feed my family based on my productivity, that they would starve," testified Amanda Fryer, a nurse practitioner who was not charged with any crime.
Brian Richey, a former Pain MD nurse practitioner who at times led the company's injection rankings, and has since taken a plea deal that required him to testify in court, said at the trial that he "performed so many injections" that his hand became chronically inflamed and required surgery.
"‘Over injecting killed my hand,'" Richey said on the witness stand, reading a text message he sent to another Pain MD employee in 2017, according to the trial transcript. "‘I was in so much pain Injecting people that didnt want it but took it to stay a patient.'"
"Why would they want to stay there?" a prosecutor asked.
"To keep getting their narcotics," Richey responded, according to the trial transcript.
Throughout the trial, defense attorney Peter Strianse argued that Pain MD's focus on injections was a result of Kestner's "obsession" with ensuring that the company "would never be called a pill mill."
Strianse said that Kestner "stayed up at night worrying" about patients coming to clinics only to get opioid prescriptions, so he pushed his employees to administer injections, too.
"Employers motivating employees is not a crime," Strianse said at closing arguments, according to the court transcript. "We get pushed every day to perform. It's not fraud; it's a fact of life."
Prosecutors insisted that this defense rang hollow. During the trial, former employees had testified that most patients' opioid dosages remained steady or increased while at Pain MD, and that the clinics did not taper off the painkillers no matter how many injections were given.
"Giving them injections does not fix the pill mill problem," federal prosecutor Katherine Payerle said during closing arguments, according to the trial transcript. "The way to fix being a pill mill is to stop giving the drugs or taper the drugs."
