Health insurers are regarded as fierce defenders of healthcare dollars. But the case of David Williams shows one reason America's healthcare costs continue to rise. The personal trainer spent years posing as a doctor and billing the nation's top insurers, making off with millions.

By Marshall Allen

This story was co-published with Vox and first appeared on Friday, July 19, 2019 in ProPublica.

Ever since her 14-year marriage imploded in financial chaos and a protective order, Amy Lankford had kept a wary eye on her ex, David Williams.

Williams, then 51, with the beefy body of a former wrestler gone slightly to seed, was always working the angles, looking for shortcuts to success and mostly stumbling. During their marriage, Lankford had been forced to work overtime as a physical therapist when his personal training business couldn't pay his share of the bills.

So, when Williams gave their three kids iPad Minis for Christmas in 2013, she was immediately suspicious. Where did he get that kind of money? Then one day on her son's iPad, she noticed numbers next to the green iMessage icon indicating that new text messages were waiting. She clicked.

What she saw next made her heart pound. Somehow the iPad had become linked to her ex-husband's personal Apple device and the messages were for him.

Most of the texts were from people setting up workouts through his personal training business, Get Fit With Dave, which he ran out of his home in Mansfield, Texas, a suburb of Fort Worth. But, oddly, they were also providing their birthdates and the group number of their health insurance plans. The people had health benefits administered by industry giants, including Aetna, Cigna and UnitedHealthcare. They were pleased to hear their health plans would now pay for their fitness workouts.

Lankford's mind raced as she scrolled through the messages. It appeared her ex-husband was getting insurance companies to pay for his personal training services. But how could that be possible? Insurance companies pay for care that's medically necessary, not sessions of dumbbell curls and lunges.

Insurance companies also only pay for care provided by licensed medical providers, like doctors or nurses. Williams called himself "Dr. Dave" because he had a Ph.D. in kinesiology. But he didn't have a medical license. He wasn't qualified to bill insurance companies. But, Lankford could see, he was doing it anyway.

As Lankford would learn, "Dr. Dave" had wrongfully obtained, with breathtaking ease, federal identification numbers that allowed him to fraudulently bill insurers as a physician for services to about 1,000 people. Then he battered the system with the bluntest of ploys: submit a deluge of out-of-network claims, confident that insurers would blindly approve a healthy percentage of them. Then, if the insurers did object, he gambled that they had scant appetite for a fight.

By the time the authorities stopped Williams, three years had passed since Lankford had discovered the text messages. In total, records show, he ran the scheme for more than four years, fraudulently billing several of the nation's top insurance companies — United, Aetna and Cigna — for $25 million and reaping about $4 million in cash.

In response to inquiries, Williams sent a brief handwritten letter. He didn't deny billing the insurers and defended his work, calling it an "unprecedented and beneficial opportunity to help many people."

"My objective was to create a system of preventative medicine," he wrote. Because of his work, "hundreds of patients" got off their prescription medication and avoided surgery.

There are a host of reasons healthcare costs are out-of-control and routinely top American's list of financial worries, from unnecessary treatment and high prices to waste and fraud. Most people assume their insurance companies are tightly controlling their healthcare dollars. Insurers themselves boast of this on their websites.

In 2017, private insurance spending hit $1.2 trillion, according to the federal government, yet no one tracks how much is lost to fraud. Some investigators and healthcare experts estimate that fraud eats up 10% of all healthcare spending, and they know schemes abound.

Williams' case highlights an unsettling reality about the nation's health insurance system: It is surprisingly easy for fraudsters to gain entry, and it is shockingly difficult to convince insurance companies to stop them.

Williams' spree also lays bare the financial incentives that drive the system: Rising healthcare costs boost insurers' profits. Policing criminals eats away at them. Ultimately, losses are passed on to their clients through higher premiums and out-of-pocket fees or reduced coverage.

Insurance companies "are more focused on their bottom line than ferreting out bad actors," said Michael Elliott, former lead attorney for the Medicare Fraud Strike Force in North Texas.

As Lankford looked at the iPad that day, she knew something else that made Williams' romp through the healthcare system all the more surprising. The personal trainer had already done jail time for a similar crime, and Lankford's father had uncovered the scheme.

Scanning her ex-husband's texts, Lankford, then 47, knew just who to call. During the rocky end of her marriage, her dad had become the family watchdog. Jim Pratte has an MBA in finance and retired after a career selling computer hardware, but even the mention of Williams flushed his face red and ratcheted up his Texas twang. His former-son-in law is the reason he underwent firearms training.

Lankford lived a few minutes away from her parents in Mansfield. She brought her dad the iPad and they pored over message after message in which Williams assured clients that their insurance would cover their workouts at no cost to them.

Lankford and Pratte, then 68, were stunned at Williams' audacity. They were sure the companies would quickly crackdown on what appeared to be a fraudulent scheme.

Especially because Williams had a criminal record.

In early 2006, while Williams and Lankford were going through their divorce, the family computer started freezing up. Lankford asked her dad to help her recover a document. Scrolling through the hard drive, Pratte came upon a folder named "Invoices," and he suspected it had something to do with Williams.

His soon to be ex-son-in-law had had a promising start. He'd wrestled and earned bachelor's and master's degrees at Boise State University, and a Ph.D. at Texas A&M University, before landing a well-paying job as a community college professor in Arlington. But the glow faded when the school suddenly fired him for reasons hidden by a confidential settlement and by Williams himself, who refused to reveal them even to his wife.

Out of a job, Williams had hustled investments from their friends to convert an old Winn-Dixie grocery store into a health club called "Doc's Gym." The deal fell apart and everyone lost their money. The failure was written up in the local newspaper under the headline: "What's up with Doc's?"

Inside the "Invoices" folder, Pratte found about a dozen bills that appeared to be from a Fort Worth nonprofit organization where his daughter and Williams took their son Jake for autism treatment. As Pratte suspected, the invoices turned out to be fake. Williams had pretended to take Jake for therapy, then created the false bills so he could pocket a cash "reimbursement" from a county agency.

In November 2008, Williams pleaded guilty in Tarrant County District Court to felony theft. He was sentenced to 18 months in jail and was released on bail while he appealed.

Things took an even darker turn about two years later when Williams and Lankford's 11-year-old son showed up to school with bruising on his face. Investigators determined that Williams had hit the boy in the face about 20 times. Williams pleaded guilty to causing bodily injury to a child, a felony, which, coupled with the bail violation, landed him in jail for about two years.

The time behind bars didn't go to waste. Williams revised the business plan for Get Fit With Dave, concluding he needed to get access to health insurance.

Williams detailed his plans in letters to Steve Cosio, a tech-savvy friend who ran the Get Fit With Dave website in exchange for personal training sessions. Cosio, whose name later popped up on Lankford's son's iPad, kept the letters in their original envelopes and shared them with ProPublica. He said he never suspected Williams was doing anything illegal.

In his letters, Williams said that when he got out, instead of training clients himself, he would recruit clients and other trainers to run the sessions. "It has the potential for increased revenue."

He asked Cosio to remove the term "personal training" from his website in another letter, adding "95 percent of my clients are paid for by insurance, which does not cover 'personal training,' I have to bill it as 'therapeutic exercise.' It is the same thing, but I have to play the insurance game … Insurance pays twice as much as cash pay so I have to go after that market."

Williams downplayed his child abuse conviction — "I can honestly say that I am the only one in here for spanking their child" — and included a dig at his ex-father-in-law, Pratte: "an evil, evil man. He is the reason for my new accommodations."

Williams told Cosio he needed to raise a quick $30,000 to pay an attorney to get him access to his children. "I will need to get a bunch of clients in a hurry."

To set his plan in motion, Williams needed what is essentially the key that unlocks access to healthcare dollars: a National Provider Identifier, or NPI number.

The ID number is little known outside the medical community but getting one through the federal government's Medicare program is a rite of passage for medical professionals and organizations. Without it, they can't bill insurers for their services.

One would think obtaining an NPI, with its stamp of legitimacy, would entail at least some basic vetting. But Williams discovered and exploited an astonishing loophole: Medicare doesn't check NPI applications for accuracy — a process that should take mere minutes or, if automated, a millisecond. Instead, as one federal prosecutor later noted in court, Medicare "relies on the honesty of applicants."

Records show Williams first applied for an NPI under his own name as far back as 2008. But it wasn't until 2014 that Williams began to ramp up his scheme, even though now he wasn't just unlicensed, he was a two-time felon. He got a second NPI under the company name, Kinesiology Specialists. The following year, he picked up another under Mansfield Therapy Associates. In 2016, he obtained at least 11 more, often for entities he created in the areas where he found fitness clients: Dallas, Nevada, North Texas and more. By 2017, he had 20 NPIs, each allowing him a new stream of billings.

For every NPI application, Williams also obtained a new employer identification number, which is used for tax purposes. But he never hid who he was, using his real name, address, phone number and email address on the applications. He added the title "Dr." and listed his credentials as "PhD." Under medical specialty he often indicated he was a "sports medicine" doctor and provided a license number, even though he wasn't a physician and didn't have a medical license.

Medicare officials declined to be interviewed about Williams. But in a statement, they acknowledged that the agency doesn't verify whether an NPI applicant is a medical provider or has a criminal history. The agency claims it would need "explicit authority" from the Department of Health and Human Services to do so — and currently doesn't have it. Regulations, and potentially the law, would need to be revised to allow the agency to vet the applications, the statement said.

Medicare does verify the credentials of physicians and other medical providers who want to bill the agency for their Medicare patients.

To those charged with rooting out fraudsters, the current regulations seem like an invitation to plunder.

"Medicare has to make sure that the individuals who apply for NPIs are licensed physicians — it's that simple," said Elliott, the former prosecutor who ran about 100 healthcare fraud investigations.

Elliott, who now does white-collar criminal defense, said he knows of two other cases currently under federal investigation in which non-licensed clinic administrators lied to obtain NPI numbers, then used patients' information to file false claims worth millions.

Medicare warns NPI applicants that submitting false information could lead to a $250,000 fine and five years in prison. But since Medicare started issuing NPIs in 2006, officials said they could not identify anyone who had been sanctioned.

So, for those bent on fraud, the first step is easy; the online approval for an NPI takes just minutes.

Williams got out of jail in November 2012 and launched an aggressive expansion with an irresistible pitch: Time to get those private personal training sessions you thought you couldn't afford!

"Now accepting most health insurance plans," his Get Fit With Dave website announced. He added a drop-down menu to his site, allowing potential clients to select their health insurance provider: Aetna. Blue Cross Blue Shield. United.

He began building a team, soliciting trainers from the strength and conditioning department at Texas Christian University. He met with new recruits at local fast food joints or coffee shops to set them up. To the trainers, the business appeared legit: They even signed tax forms. Before long, Williams' network stretched throughout Texas and into Colorado, Idaho and Nevada.

One Fort Worth trainer recalled meeting Williams through one of his clients, a Southwest Airlines flight attendant. Williams, he said, seemed like a real doctor, and it wasn't hard to imagine an insurer's wellness program covering fitness. Plus, it was good money — about $50 an hour and Williams paid him for multiple clients at once if he did boot camps, said the trainer, who asked that his name not be used so he wouldn't be tarnished by his association with Williams. Williams, he said, even gave him an iPad, with "Kinesiology Specialists" etched on the back, to submit bills and paid him via direct deposit.

Clients came to Williams through his business cards, his website and word-of-mouth. Williams, records show, quickly verified if their insurance companies would cover his fees — although he didn't tell clients that those fees would be billed as medical services, not personal training. To ensure the clients paid nothing, he waived their annual deductibles — the portion patients pay each year before insurance kicks in. Authorities said Williams banked on being able to file enough claims to quickly blow through their deductibles so he could get paid.

Meredith Glavin, a flight attendant with Southwest, told the authorities she got in touch with Williams after her co-workers said insurance was covering their workouts. After providing her name, address and insurance information on the Get Fit With Dave website, Williams emailed back with the good news: "Everything checks out with your insurance. My services will be covered at no cost to you."

During a follow-up phone call, Glavin said, they discussed her fitness and weight loss goals and then Williams connected her with a trainer. The workouts were typical fitness exercises, she said, not treatment for a medical condition. But insurance claims show Williams billed the sessions as highly complex $300 examinations to treat "lumbago and sciatica," a condition in which nerve pain radiates from the lower back into the legs.

He used his favorite billing code — 99215 — to bill Glavin's insurer, United, the claims show. The code is supposed to be used less often because it requires a comprehensive examination and sophisticated medical decision-making, warranting higher reimbursement. In all, Williams used the code to bill United for more than $20.5 million — without apparently triggering any red flags at the insurer. For that code alone, the insurance giant rewarded him with $2.5 million in payments.

Eventually, Get Fit With Dave expanded to about a dozen trainers and around 1,000 patients, said a source familiar with the case. And, court records show, the checks from insurance companies, some over $100,000, kept rolling in.

Williams bought a couple of pick-up trucks, a new Harley Davidson motorcycle and a fancy house. But greed didn't seem his only motivation. "I made $50K last week," he wrote in a December 2014 text to a friend. "Seriously it means nothing. It is not about the money. I have had a lot taken away from me, and maybe I am trying to prove something ... Maybe it is my way of giving the finger to everyone???"

A few miles away, his former father-in-law watched Williams' illegal business blossom with growing outrage. Pratte kept his grandson's iPad on his desk, near his computer, and checked it every day. The texts appeared boring, even routine, but Pratte knew they were evidence of ongoing fraud.

"I have another flight attendant friend who is interested in signing up as well," a new client texted to Williams.

"Tell him to show up with his insurance card," Williams replied.

To Pratte, the text messages were a "gold mine." This is the stuff that will really nail his rear end, he recalled thinking as he read the messages. He couldn't wait to share his findings with the insurers. How often do they get cases wrapped up in a bow?

But when he and Lankford began contacting insurers, they were soon bewildered. When Pratte told Aetna that he wanted to report a case of fraud, he said the customer service representative asked for his member number, then told him non-members couldn't report criminal activity. Lankford, who happened to be covered by Aetna, made the complaint, but they say they never heard back.

An Aetna spokesman told ProPublica that the insurer could find no record of Pratte's call but said the company's fraud hotline takes tips from anyone, even anonymous callers.

Lankford sent an email to Cigna's special investigations unit in January 2015 "regarding one of your providers that concerns me." She provided Williams' company name, address, cellphone number, Social Security number and more, and she described his scheme. "He has no medical license or credentials," she wrote. "He was in prison for felony theft."

A supervisory investigator called to ask for the names of personal trainers, which Lankford provided. But, again, there was silence.

Pratte could see many of the clients worked for Southwest and had their benefits administered by United. He jotted down the name, address, phone number, birthdate and member identification number of the potential clients on a yellow legal pad — all the information the insurer and Southwest would need to investigate the fraud. This is so easy, Pratte recalled thinking as he wrote down the details, all they have to do is cross-reference this.

Because Southwest self-funds its benefits, the company was on the hook for the bills, which would eventually total about $2.1 million according to a source familiar with the case. It paid United to administer the company's plan and ensure the claims it covered were legitimate. Pratte said he called the airline in the fall of 2015 and spoke to someone in the human resources department who said they would pass the information to the right people. "That was the last I heard," he said. Southwest declined to comment for this story. It still pays United to administer its benefits.

Pratte started calling United in the fall of 2014 and spoke to a fraud investigator who took the information with interest, he said. But within a couple of weeks he was told she moved to a different position. Pratte continued calling United over the following two years, making about a dozen calls in total, he said. "He is not a doctor," Pratte told whoever picked up the phone. "So, I don't see how he can be filing claims."

In early 2015, Lankford emailed additional information to the investigator. The investigator wrote back, thanking Lankford and saying she forwarded the details to the people who research licenses. "They will investigate further," she said in the email.

Meanwhile, the text messages showed Williams continuing to sign up — and bill for — United members.

Frustrated, Pratte made one final call to United in 2016, but he was told the case was closed. United said he'd have to call the Texas Department of Insurance for any additional details. Pratte had already filed a complaint with the regulator but reached out again. The department told him that because he hadn't personally been defrauded, it would not be able to act on his complaint.

To Pratte, it appeared he had struck out with Aetna, United, Southwest and the Texas Department of Insurance. "I was trying to get as many people as possible to look into it as I could," Pratte said recently. "I don't know if that tells me they are incompetent. Or they don't care. Or they're too busy."

A case summary, prepared by the Texas Department of Insurance, shows it first learned of the Williams case in January 2015 but lacked staff to investigate. A spokesman said the regulator later received Pratte's complaint but didn't pursue it after learning that United had already investigated and closed its case.

Meanwhile, some Get Fit With Dave clients had begun noticing odd claims on their insurance statements.

Nanette Bishop had heard about Williams when a fellow Southwest flight attendant handed her the trainer's business card and said, "You've got to meet Dr. Dave." (Bishop said the Southwest legal department advised her not to speak with ProPublica. Details about her interaction with Williams come from court records.)

Bishop said she started strong with the workouts but "fizzled" quickly. Her daughter, who was also on her plan and signed up for workouts, only did a couple sessions. Bishop said she had a hard time staying consistent because she was traveling a lot — for much of October 2014 she was in Germany. Later, she noticed in her insurance records that Williams had been paid for dozens of sessions over many months, even during the time she'd been abroad.

Bishop texted Williams in January 2015 to tell him he needed to refund all the money. "I never worked out four [times] a week and [my daughter] quit the first week of September," she wrote. Bishop also called United and Southwest Airlines to report the overbilling.

About a month later, Williams received a letter from a subsidiary of United ordering a review Bishop's medical records.

Another client texted Williams with concerns that her United insurance plan had been billed for 18 workouts in December 2015. That couldn't be accurate, the woman wrote. "I had to take December off due to my work schedule and family in town," she wrote. "I understand that people need to be paid but this seems excessive."

While Pratte, Lankford and some of Williams' clients repeatedly flagged bogus bills, the mammoth health insurers reacted with sloth-like urgency to the warnings. Their correspondence shows an almost palpable disinterest in taking decisive action — even while acknowledging Williams was fraudulently billing them.

Cigna appears to have been the quickest to intervene. In January 2015, Cigna sent Williams a letter, noting that he wasn't a licensed medical provider and had misrepresented the services he provided. The insurer said he needed to pay back $175,528 and would not be allowed to continue billing.

"I just got a $175K bill in the mail," Williams texted to a friend. "Cigna insurance has been overpaying me for the past 18 months and they want it back. I knew that they were reimbursing at too high of a rate so I can't really complain."

By then Williams had more than one National Provider Identifier, so he just switched numbers and kept billing Cigna. More than a year later, in May 2016, Cigna sent another letter, saying he now owed $310,309 for inappropriate payments. In total, the company paid him more than $323,000. Williams never gave any of it back. Cigna declined to comment about the Williams case.

Aetna wrote Williams in January 2015 to say it had reviewed his claims and found he wasn't licensed, resulting in an overpayment of $337,933. The letter said there appeared to be "abusive billing" that gave "rise to a reasonable suspicion of fraud." But the insurer also gave him a month to provide documentation to dispute the assessment. When Williams hadn't responded in three months, an Aetna investigator wrote to Williams' attorney, saying, "We are willing to discuss an amicable resolution of this matter," and gave him two more weeks to respond.

That August, an Aetna attorney sent Williams' attorney another letter, noting that Williams had submitted "fraudulent claims" and had continued to submit bills "even after his billing misconduct was identified."

In January 2016 — a year after Aetna first contacted him — Williams agreed to a settlement that required him to refund the company $240,000 "without admission of fault or liability by either party."

But that didn't stop, or even appear to slow, Williams. Not only did he renege on that promise, he picked one of his other NPI numbers and continued to file claims resulting in another $300,000 in payments from Aetna. In total, Aetna paid Williams more than $608,000.

In emails, Ethan Slavin, a company spokesman, didn't explain why Aetna settled with Williams instead of pursuing criminal prosecution. He blamed the insurer's slow response on the lengthy settlement process and Williams' tactic of billing under different organizations and tax identification numbers. Williams did repay some of the money before defaulting, Slavin said.

United, one of the largest companies in the country, paid out the most to Williams. The insurer brought in $226 billion last year and has a subsidiary, Optum, devoted to digging out fraud, even for other insurers. But that prowess is not reflected in its dealings with Williams.

In September 2015, United wrote to Williams, noting his lack of a license and the resulting wrongful payments, totaling $636,637. But then the insurer added a baffling condition: If Williams didn't respond, United would pay itself back out of his "future payments." So while demanding repayment because Williams was not a doctor, the company warned it would dock future claims he would be making as a doctor.

Williams responded a month later, noting that he had a Ph.D. in kinesiology and did rehab, so he met the qualifications of a sports medicine doctor.

United responded in November 2015 with the same argument: he wasn't licensed and thus needed to repay the money, again warning that if he didn't, United would "initiate repayment by offsetting future payments."

Williams took United up on its offer. "Please offset future payments until the requested refund amount is met," he responded.

Then Williams turned to another NPI number, records show, and continued submitting claims to United.

In January 2016, Williams agreed to settle with United and repay $630,000 in monthly installments of $10,000. Inexplicably, the agreement refers to Williams as "a provider of medical services or products licensed as appropriate under the laws of the state of TX" and notes that the settlement doesn't terminate his continued participation in United's programs.

In 2016, Williams obtained a new batch of NPI numbers from Medicare. As usual, he used his real name, address and credentials on the applications. The additional numbers allowed him to continue to make claims to United.

In November 2016, United investigators caught Williams again — twice. They sent two letters accusing him of filing 820 claims between May 2016 and August 2016 and demanded repayment. Again, almost inconceivably, the company threatened to cover his debt with "future payments."

In December 2016, United notified Williams he had only repaid $90,000 of the initial $630,000 he owed and was in default. The following month, United told him he had to pay the remaining $540,000 within 20 days or he could face legal action. Williams replied, saying he wanted to renegotiate the settlement, but the insurer declined. Late that month, United said its inappropriate payments to Williams had ballooned to more than $2.3 million.

A United spokeswoman said it was difficult to stop Williams because he used variations on his name and different organizations to perpetrate the fraud. "He did everything he could not to get caught," Maria Gordon-Shydlo said.

She acknowledged getting the complaints from Lankford and Pratte, as well United members, but defended the response of the company, saying it had eventually referred Williams to law enforcement.

The insurer is continuing "to improve our processes and enhance our systems so we can catch these schemes on the front-end," she said, "before a claim is paid and to recoup dollars that were paid as a result of provider misconduct."

In all, United paid Williams more than $3.2 million — most of it after the insurer had caught him in the act.

But in reality, the losses weren't all United's. Most of the fraud was funded by its client, Southwest.

Many healthcare experts and fraud investigators said they weren't surprised to hear that insurers were slow to stop even such an outlandish case of fraud.

"It's just not worth it to them," said Dr. Eric Bricker, an internist who spent years running a company that advised employers who self-funded their insurance.

For insurance behemoths pulling in billions, or hundreds of billions, in revenue, fraud that sucks away mere millions is not even a rounding error, he said.

And perhaps counterintuitively, insurance companies are loath to offend physicians and hospitals in their all-important networks — even those accused of wrongdoing, many experts have said. They attract new clients by providing access to their networks.

This ambivalence toward fraud, Bricker and others said, is no secret. Scammers like Williams are "emblematic of gazillions of people doing variants of the same thing," Bricker said. Insurers embolden them by using a catch-and-release approach to fraud, in which the insurers identify criminals, then let them go.

Joe Christensen has pursued fraud for both government and commercial insurers, serving as a director in Aetna's Special Investigations Unit, a team of more than 100 people ferreting out fraud, from 2013 to 2018 and as the director of Utah's insurance fraud division for 13 years. Fraud in government programs, like Medicare and Medicaid, gets more publicity, he said, and has dedicated arms of agencies pursuing fraudsters. But the losses may be even greater in the commercial market because the dollar levels are higher, he said.

Some commercial insurers take a passive approach, Christensen said, in part because it's expensive to press a fraud case. At Aetna, he said, investigators would identify cases of apparent fraud, but it was up to the executives and legal team to decide how to handle them. Taking fraudsters to civil or criminal court requires resources, so the company often settled for trying to get repaid through settlements or blocking a suspect provider from billing, he said.

Christensen said while he was at Aetna, investigators almost never sought to partner with law enforcement agencies to pursue criminal cases. Last spring, he became the SIU director for a Southern California-based Medicaid plan called L.A. Care Health Plan, where he was allowed to take a proactive approach. In just about a year, he said, his much smaller team began 37 criminal investigations with law enforcement agencies. The cases are in different stages, but so far there have been seven arrests, four search warrants and one conviction. Christensen recently took a job with an insurer in Utah, where his family lives, so he could be closer to them.

ProPublica asked Aetna how many criminal cases it had pursued in 2017 and 2018. A company official said the question could not be answered because it does not track such cases.

In the spring of 2017, more than four years after Williams first began billing insurers, one of them, United, finally brought him to the attention of the FBI's heath care fraud squad.

One May day, agents from the FBI and the newly engaged Texas Department of Insurance knocked on the door of Williams' sprawling six-bedroom home — a spread he'd boasted to one trainer that he'd purchased with cash. Williams didn't invite them in. He refused to answer questions, claiming his attorney had dealt with the questionable billings.

Undaunted, just days later, Williams used a freshly minted NPI number to send another bill to United. The last known claim he submitted was on June 3, 2017, according to a source familiar with the investigation.

That October, Williams' long run came to an end when he was arrested by the FBI.

The following May, Williams' trial began in the United States District Court for the Northern District of Texas. The prosecution didn't have to make a complex argument. Williams had billed for non-medically necessary services and wasn't a medical provider — a "slam dunk case" said the agent on the case.

But the testimony served as a cheat sheet for how to defraud the health insurance industry and mostly get away with it.

Without irony, the prosecutor, P.J. Meitl, argued that Williams had preyed on a health insurance system that relies "on trust, relies on honesty" when it pays claims.

He called fraud investigators from Aetna, Cigna and United, who testified that their companies auto-pay millions of claims a year. It's not cost effective to check them, they said. "Aetna relies on the honesty of the person submitting the claim verifying that it's true," testified Kathy Richer, a supervisor in Aetna's Special Investigations Unit.

In a similar manner, Medicare trusts that people who apply for NPI numbers are actually medical providers, Meitl told the jury. Medicare "does not investigate or verify whether an individual is actually a healthcare provider before issuing an NPI number."

Williams' attorney, Wes Ball, argued that the case was the sign of a "broken" healthcare system and blamed insurers for making a financial decision not to review Williams' claims before paying them. United failed to protect Southwest's money, Ball said, and "might be a vendor you might not want to hire."

As for the NPI numbers, anyone could have checked Williams' credentials, he said.

The jury wasn't convinced, convicting Williams of four counts of healthcare fraud.

The judge sentenced him to a little more than nine years in federal prison and ordered him to pay $3.9 million in restitution to United, Aetna and Cigna.

Insurers promote themselves as guardians of healthcare dollars. United says on its website it wants to "help employers manage" medical expenses, resulting in "lower costs." Aetna promises employers "affordability." Cigna promises "increased savings."

But private health insurers allow so much fraud that prosecutors use an idiom to describe the rare person who gets caught: "Pigs get fat, hogs get slaughtered."

"Pigs" can steal millions, if they bill just enough to avoid notice. But if they get greedy and bill too many millions, they "become a data outlier," said Elliott, the former fraud task force prosecutor. "You get slaughtered."

Williams took years to reach hog status.

Part of the problem, experts say, is that healthcare fraud is often misunderstood as shafting greedy insurers — not the folks paying for health insurance. Ultimately, insurers don't bear the cost. For their self-funded clients, like Southwest, they merely process the claims. For their traditionally insured clients, they can recover any losses by increasing deductibles and premiums and decreasing coverage.

Williams appears to have duped more than insurers. His twin brother, Dan Williams, recently retired as the assistant special agent in charge of the Dallas field office for criminal investigation for the Internal Revenue Service. He spent 27 years ferreting out fraud, and he gets the irony. "You're not the first person to point that out," he said.

Dan Williams said his brother's sudden riches from the training business piqued his investigative instincts, but he "trusted" his brother when "he told me he was authorized to bill insurance companies."

In his letter to ProPublica, Williams did not address the issues in the case or even acknowledge that any of his activities were wrong. Instead, he blamed his former wife.

"It grieves me that the consequences of a bitter and hurtful divorce have resulted in the ending of this unprecedented and beneficial opportunity to help many people," he wrote.

Lankford and Pratte are proud of their part in ending his scheme, if still baffled that they had to play such a central role in uncovering it.

If it hadn't been for the iPad messages, "I have to believe he would still be billing insurance companies from a Caribbean island," Pratte said.

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Nonprofit hospitals pay virtually no local, state or federal income tax. In return, they provide community benefits, including charity care to low-income patients. In Memphis, Methodist Le Bonheur Healthcare has brought 8,300 lawsuits for unpaid medical bills in just five years.

This article was first published on Thursday, June 27, 2019 in ProPublica, and was produced in partnership with MLK50, which is a member of the ProPublica Local Reporting Network.

MEMPHIS, Tennessee — In July 2007, Carrie Barrett went to the emergency room at Methodist University Hospital, complaining of shortness of breath and tightness in her chest. Her leg was swollen, she'd later recall, and her toes were turning black.

Given her family history, high blood pressure and newly diagnosed congestive heart failure, doctors performed a heart catheterization, threading a long tube through her groin and into her heart.

Her share of the two-night stay: $12,109.

Barrett, who has never made more than $12 an hour, doesn't remember getting any notices to pay from the hospital. But in 2010, Methodist Le Bonheur Healthcare sued her for the unpaid medical bills, plus attorney's fees and court costs.

Since then, the nonprofit hospital system affiliated with the United Methodist Church has doggedly pursued her, adding interest to the debt seven times and garnishing money from her paycheck on 15 occasions.

Barrett, 63, now owes about $33,000, more than twice what she earned last year, according to her tax return.

"The only thing that kept me levelheaded was praying and asking God to help me," she said.

She's among thousands of patients the massive hospital has sued for unpaid medical bills. From 2014 through 2018, Methodist filed more than 8,300 lawsuits, according to an MLK50-ProPublica analysis of Shelby County General Sessions Court records. Older cases like Barrett's, which dates back nearly a decade, remain on the court's docket.

Other hospitals in Memphis and around the country also sue patients. According to a study published Tuesday in the Journal of the American Medical Association, researchers found more than 20,000 debt lawsuits filed by Virginia hospitals in 2017. More than 9,300 garnishment cases occurred that year, and nonprofit hospitals were more likely to garnish wages.

But Methodist's aggressive collection practices stand out in a city where nearly 1 in 4 residents live below the poverty line.

Its handling of poor patients begins with a financial assistance policy that, unlike many of its peers around the country, all but ignores patients with any form of health insurance, no matter their out-of-pocket costs. If they are unable to afford their bills, patients then face what experts say is rare: A licensed collection agency owned by the hospital.

Lawsuits follow. Finally, after the hospital wins a judgment, it repeatedly tries to garnish patients' wages, which it does in a far higher share of cases than other nonprofit hospitals in Memphis.

Its own employees are no exception. Since 2014, Methodist has sued dozens of its workers for unpaid medical bills, including a hospital housekeeper sued in 2017 for more than $23,000. That year, she told the court, she made $16,000. She's in a court-ordered payment plan, but in the case of more than 70 other employees, Methodist has garnished the wages it pays them to recoup its medical charges.

Nonprofit hospitals are generally exempt from local, state and federal taxes. In return, the federal government expects them to provide a significant community benefit, including charity care and financial assistance.

Methodist does provide some charity care — and pegs its community benefits as more than $226 million annually — but experts faulted it for also wielding the court as a hammer.

"If Warren Buffett walks in and needs a heart valve procedure and then stiffs the hospital, then yes, you should sue Warren Buffett," said John Colombo, a University of Illinois College of Law professor emeritus who has testified before Congress about the tax-exempt status of nonprofit hospitals. "I can't think of a situation in which thousands of your patients would fit that."

Several nonprofit hospitals don't sue patients at all, such as Bon Secours Hospitals in Virginia, which stopped pursuing debt suits in 2007, and the University of Pittsburgh Medical Center, which includes more than 20 facilities.

Some of Methodist Hospital's cousins — health systems affiliated with the United Methodist Church — also don't sue patients. That's the case with Methodist Health System, which operates four hospitals in the Dallas area. The collection policy of the seven-hospital Houston Methodist system states: "At no time will Houston Methodist impose extraordinary collection actions such as wage garnishments," liens on homes, or credit bureau notification.

"We are a faith-based institution and we don't believe taking extraordinary measures to seek bill payments is consistent with our mission and values," a Houston Methodist spokesperson said by email.

Methodist Le Bonheur, which says it is the second largest private employer in Shelby County, boasts on its website that it's committed to a "culture of compassion." Last year, Fortune magazine ranked the hospital among the 100 Best Companies to Work For.

Methodist declined repeated requests to interview its top executives.

Instead it sent a statement that said, "Outstanding patient debts are only sent to collections and then to court as a very last resort, and only after continued efforts to work with the patients have been exhausted."

"We strongly believe in providing exceptional care to all members of the community — regardless of ability to pay."

Methodist's collection activities are playing out in the second-poorest large metropolitan area in the nation, where jobs have long been concentrated in low-wage industries such as warehousing and logistics. More than 40% of Memphis workers earn less than $15 an hour, according to one economic development report.

For the rest of this year, MLK50 and ProPublica will explore how hospitals, businesses and others in Memphis make it nearly impossible for low-income workers to make ends meet.

Beverly Robertson, who served on Methodist's board from 2003 to 2012, said she was surprised to learn from a reporter about the hospital's collection practices. During her lengthy tenure, she said, board members were never informed about the lawsuits against patients.

"I wish I'd known some of this," said Robertson, president and CEO of the Greater Memphis Chamber and previously executive director of the National Civil Rights Museum.

The Rhythm of General Sessions Court

 

On Jan. 16, Barrett appeared in Shelby County General Sessions Court to try to stop Methodist's latest attempt to garnish her paycheck from her part-time job at Kroger, where she makes $9.05 an hour.

She had plenty of company: All 80 lawsuits on the Division 5 docket that morning had been filed by Methodist.

On this morning, Barrett faced Judge Betty Thomas Moore, who has been on the bench for nearly 21 years. Moore expeditiously moved through cases, pausing occasionally to question defendants or lecture them on money management, and to ask Methodist's attorneys what judgment amount they sought or the monthly payment they'd accept.

Barrett, a devout woman whose denomination eschews makeup and jewelry, stood when Moore called her name.

She waited as the judge flipped through her file, which contained a record of the case, including a motion she filed to reinstate her payments at $40 a month. That's the amount a judge approved two years earlier, but Barrett had stopped making payments after she lost her job.

Barrett had submitted a sworn affidavit of income and property, which spelled out her dependents, bank account balances, debts, assets and monthly expenses. Barrett wrote that her checking account had $20 in it. Her monthly income was $750 per month, and her expenses were about twice that.

What caught the judge's eye, though, was the amount owed to the hospital.

"It's over a $30,000 balance," Moore said, incredulously. "It has actually doubled."

Though Barrett had made sporadic payments, they were dwarfed by the mountains of interest the hospital tacked onto her account.

It wasn't that she didn't want to pay, Barrett tried to tell the judge, but that she couldn't. She had to stop working to care for her sister, who died of cancer in November.

"You gotta pay," replied Moore tersely. She too is a Christian, and from the bench, she often gives God credit for her journey from humble beginnings in South Memphis to elected office. Barrett began to tell the judge that now that she had a new job, she could pay more reliably, but Moore cut her off.

"That I don't want to hear. … It's your fourth motion. One time, you just didn't show up!" Moore said, as Barrett started coughing — a nervous reaction, she explained later.

"Have a seat, ma'am," said an irritated Moore. "I'm going to think about it for a minute."

Lots of lawsuits and garnishments

 

Between 2014 and 2018, more than 163,000 debt lawsuits were filed in Shelby County General Sessions Court, primarily by debt buyers, auto loan companies and hospitals.

Only one plaintiff, Midland Funding, which buys unpaid debt, sued more frequently than Methodist. (Midland declined to comment.)

Methodist filed more than 8,300 lawsuits, compared with more than 6,700 filed by competitor Baptist Memorial Health Care and just over 1,900 by Regional One Health, the county's public hospital. St. Jude Children's Research Hospital, also headquartered in Memphis, doesn't bill families for care not covered by insurance.

With $2.1 billion in revenue and a health system that includes six hospitals, Methodist leads the market: In 2017, it had the most discharges per year and profits per patient, according to publicly available data analyzed by Definitive Healthcare, an analytics company. Methodist says it has "a hospital in all four quadrants of the greater Memphis area, unparalleled by any other healthcare provider in our region," plus more than 150 outpatient centers, clinics and physician practices.

The number of lawsuits Methodist files isn't out of proportion to its size, at least compared to Baptist or Regional One. But where it does stand out is the share of cases in which it seeks a wage garnishment order, an action that can upend the lives of low-wage defendants.

A court-ordered garnishment requires that the debtor's employer send to the court 25% of a worker's after-tax income, minus basic living expenses and a tiny deduction for children under 15. The court then sends that payment to the creditor.

Methodist secured garnishment orders in 46% of cases filed from 2014 through 2018, compared with 36% at Regional One and 20% at Baptist, according to an analysis of court records by MLK50 and ProPublica. It is unclear what explains this difference.

Turning to the legal system to settle debts is a choice, not a mandate, said Jenifer Bosco, staff attorney at the National Consumer Law Center, a nonprofit focusing on consumer law for low-income and other disadvantaged people. "A lot of medical debts are just handled through the collections process," she said. "Certainly some end up in court, but it seems like this hospital is especially aggressive."

Methodist's Dogged Pursuit of the Poor

 

Barrett has worked only low-wage jobs, be it cleaning medical offices or sorting packages at FedEx's largest distribution facility, known as the hub.

But for the last nine years, Methodist has been on Barrett's trail, following her from one low-wage job to another.

To successfully garnish a debtor's paycheck, Methodist, like all creditors, has to clear two hurdles. First, the hospital needs to know where the person works, since garnishment requires the employer's cooperation.

Next, the debtor must have enough after-tax income to clear the law's earnings exemption, which protects $217.50 per week of a debtor's after-tax income – the equivalent of 30 hours at the federal minimum wage of $7.25 an hour.

At first, the hospital couldn't figure out where Barrett worked. It filed garnishment attempts at FedEx and then at Sodexo, which provides housekeeping and other services for corporations, only to learn from the companies that Barrett hadn't worked there in years.

By September 2011, Barrett was working at T.J.Maxx, tagging clothes headed for the clearance racks. Methodist served her employer with a garnishment attempt, only to run into the second hurdle: She often didn't make enough to have her pay garnished.

Time and again over the next six years, the hospital tried to garnish Barrett's pay. Sometimes it succeeded, once collecting $3.67. Other times it failed. Four times, T.J.Maxx returned the garnishment order to the court, marking "Net Earnings Less Than Exemptions."

While state law spares the poorest debtors from wage garnishment, it doesn't stop creditors from adding interest to the underlying debt.

Barrett, 63, gets ready for an evening shift at Kroger. Barrett's employer expects workers to have their uniforms on when they enter the grocery store. (Andrea Morales for MLK50)

Methodist knew that Barrett was a low-income worker, yet it added interest to her account seven times, in amounts ranging from $46 to $7,340.

Charging that much interest to a low-income patient is "unconscionable," said Fred Morton, a retired minister of Christ United Methodist Church in East Memphis.

"That's a 21st-century version of slavery," said Morton, who serves on the economic justice committee for MICAH, a coalition of community and faith-based organizations. "That kind of indebtedness. … That's horrible to me."

By 2017, Barrett had moved in with a friend and her mother, both amputees, and cared for them in exchange for a place to stay.

In April of that year, Barrett filed a motion to stop the wage garnishment and offered to pay $40 per month. She told the court her income was $800 per month.

The judge agreed, but then Barrett's sister, who was unmarried and never had children, fell ill. When Barrett stopped working to care for her, she fell behind on her payments.

"I went and borrowed money through those payday loans to make those payments," she said. "It was just a struggle for me."

Every 30 days, she pays $60 to renew the $300 loan, at an effective annual interest rate of more than 240%.

Financial Assistance Required, but Is It Offered?

 

The Affordable Care Act, former President Barack Obama's signature health care legislation, is best known for expanding access to health insurance coverage. But it also imposed new requirements on nonprofit hospitals, namely that they have charity care policies and share them with patients.

But the rules do not specify how generous those policies must be — and Methodist is among the least generous in the state, according to MLK50-ProPublica's review of policies at Tennessee nonprofit hospitals.

While dozens of hospitals offer free or highly discounted care that helps shield low- and middle-income patients, regardless of insurance status, from crushing debt, Methodist does not.

That's especially problematic for people with high-deductible health insurance plans, defined by the IRS as those with deductibles over $1,350 for an individual and over $2,700 for a family. The number of adults with employer-based, high-deductible health insurance nearly tripled from 2007 through 2017, according to a 2018 report from the Centers for Disease Control and Prevention.

Methodist said it is required by insurers to collect copayments and deductibles. That said, the hospital added: "We know some insured patients have high copays and deductibles that place a financial burden on the patient. As a mission-driven organization, we will work with these patients seeking assistance."

Methodist's financial assistance policy is outdated, said Michele Johnson, executive director of the Tennessee Justice Center, which advocates for expanded health care access.

"Methodist's rules were written at a time when there was just not this epidemic of underinsured people in the state," Johnson said. "The reality has changed faster than their policy has changed."

Methodist said it offers 0% interest payment plans for insured and uninsured patients who have trouble paying their bills, but only offers those before court action commences. Methodist also noted that it provides an automatic 70% discount it provides to those who identify as uninsured and the free care to patients at or below 125% of the federal poverty guidelines, which for a single adult would be just over $15,600. Uninsured patients who earn more than that, but less than twice the poverty limit, are also eligible for discounts.

"We are committed to working with all patients who are struggling with medical expenses. Our desire is to work with patients early in the process to set up a payment plan that meets their individual need," the hospital said in a statement.

The hospital's contentions, however, do not match the text of its financial assistance, billing and collections policies or the frequently asked billing questions on the hospital's website. None of those mention interest-free payment plans.

Methodist, like its peers, also gets assistance from the state of Tennessee to help offset its costs for providing uncompensated care. In the first three months of 2019, the state gave more than $31 million to qualifying hospitals. Of that, Methodist Le Bonheur Healthcare's hospitals received nearly $5 million, according to a quarterly report submitted to the Tennessee General Assembly.

For years, nonprofit hospitals that sue hundreds of patients have been the subject of investigative reports and lawmakers' scrutiny.

A 2014 ProPublica report on Mosaic Life Care (formerly Heartland Regional Medical Center) in Missouri revealed that the small hospital filed 11,000 lawsuits over a five-year period. Following the story and a Senate investigation led by Sen. Chuck Grassley, R-Iowa, Mosaic rewrote its financial assistance policies and erased nearly $17 million of patients' debt.

"We were doing the medically right thing for the person, but on the financial responsibility part, we were doing the wrong thing," Dr. Mark Laney, president and CEO of Mosaic, told the St. Joseph News-Press at the time.

Aggressive debt collection practices are "contrary to the philosophy behind tax exemption," Grassley wrote in a September 2017 op-ed for the medical and science news outlet Stat.

"Such hospitals seem to forget that tax exemption is a privilege, not a right. In addition to withholding financial assistance to low-income patients, they give top executives salaries on par with their for-profit counterparts."

In 2017, Methodist paid its president and CEO, Dr. Michael Ugwueke, $1.6 million in total compensation. That same year, Gary Shorb, the hospital's CEO from 2001 to 2016, earned more than $1.2 million for serving as Ugwueke's adviser. In 2018, the hospital brought in $86 million more than it spent, according to an end-of-year revenue bond disclosure statement.

Methodist Sends a Defendant in Circles

 

Across the country, medical debt is common, but it falls hardest on nonwhite residents and people who live in the South, according to the Debt in America report released by the Urban Institute, a Washington, D.C.-based think tank.

In Shelby County, twice as many nonwhite county residents have medical debt in collections as white residents — 23% compared with 11%.

More than half the county's residents are African Americans, as were more than 90% of Methodist's defendants observed by a reporter in court this year.

That includes Raquel Nelson, who appeared in court the same morning as Barrett.

Nelson's employer-provided health insurance covered the majority of a hospital bill for her 2016 hysterectomy, but she still owes $2,200.

This was not the first time Nelson had been a defendant. Methodist sued her in 2013 for $850 in hospital bills for her children, who are now grown. (She has since paid off that debt.) Three years ago, Baptist sued her for $5,000 after an overnight stay for chest pains. She's paying $50 a month.

Nelson, 43, doesn't regret choosing a career in social services, although her bachelor's and master's degrees left her with $100,000 in student loans, which are in deferment.

Prescriptions to treat chronic illnesses including hypothyroidism, plus supplies for a machine to treat sleep apnea, total more than $200 a month.

When money is tight, Nelson pays just enough on her utility bill to keep the lights on. Her June utility bill was more than $500, and about $200 is the past due amount.

She can't bring herself to keep a written budget. "If I do, it'll be frightening because I'll be thinking, 'How am I even surviving?'"

When a process server handed her the warrant on Dec. 4, stating she'd been sued by Methodist, he also gave her a card to call Consolidated Recovery Systems, a subsidiary of Revenue Assurance Professionals, the licensed debt collection agency owned by Methodist. She called the hospital's collection agency and was told that if she didn't pay $175 per month, she could meet them in court.

So Nelson went to court, where she asked the hospital to send her an itemized bill, so she could verify the debt was hers.

She returned to court in April, agreed the debt was hers and the next week filed a motion to pay $75 a month, the same amount she'd offered the collection agency.

In May, Nelson was back in court, this time before Judge John Donald. "I'm nervous," she whispered, as Donald raced through the cases.

She stood when the judge called her name. Donald asked Methodist's attorney if $75 a month would be acceptable.

"That's fine, your honor," said Dewun Settle, one of two attorneys Methodist has hired to represent the hospital in court.

"You're free to go," Donald said, waving Nelson toward the door.

Outside the courtroom, Nelson tallied her costs, including time off work, parking fees for three trips to court and a $27 filing fee all for Methodist's lawyers to agree to the same monthly payment the hospital's collection agency refused.

"They were just being greedy," she said.

A Familiar Rhythm

 

Methodist's attorneys tag team the cases. Settle presents the cases to the judge. R. Alan Pritchard moves between the courtroom and the hallway, where he negotiates payment plans with defendants. Attorney's fees add 33% to the initial hospital bill in each case, turning a $2,000 bill into a $2,660 lawsuit, before court fees and interest.

The judges' rulings will follow the defendants for months, years, even decades. But Settle doesn't need to say much for the judge to be the hospital's heavy.

He usually asks for more than the defendant offered, and then the judges almost always lean on the defendant.

In February, Judge Deborah Henderson was unmoved as a charter school employee explained that student loans and caring for her ailing mother kept her from paying any more than $40 per month.

"It is admirable that you are helping your disabled mom, but there is a difference between a moral responsibility and a legal responsibility," Henderson said. "This debt is your legal obligation," she said, before ordering the educator to pay $75 per month.

The defendant left the courtroom in tears.

Even when a defendant complies with a court order and pays the amount agreed and on time, Methodist often seeks more.

That's what happened to a FedEx worker and mother of two the hospital summoned to court in April.

Court records show she'd made her $50 per month payments as scheduled for the past year. The sworn affidavit detailing her finances showed that her monthly expenses were $170 more than her income.

Judge Lonnie Thompson, elected in 1998, had these documents before him as he listened to Settle argue that the mother should pay more.

"She is paying on time," Settle allowed. "We're seeking an increase for $100 a month so the balance won't continue to increase."

The hospital had added more than $400 since September, raising the defendant's debt to nearly $7,000.

Thompson turned to the defendant. "Can you pay $75?"

"My house is in foreclosure right now," she replied.

Thompson pressed her and the defendant grew frustrated.

"I can't agree to it if I can't pay," the defendant said.

"If I sign the order," Thompson said sternly, "you have to pay it."

"I mean, I don't have it to pay," she replied.

Thompson relented and agreed to let her continue paying $50 a month. Three weeks later, she filed for bankruptcy.

Pritchard and Settle referred questions to Methodist. Henderson and Thompson did not return emails seeking comment.

If a defendant had an attorney, the lawyer might be able to negotiate a discount on the debt or maybe a reduction in the attorney's fees.

Without counsel, defendants navigate the system on their own, often poorly. When a judge asked one defendant if she was represented by counsel, the defendant pointed to Pritchard, who shook his head.

Of 80 cases on the Jan. 16 docket, only one defendant was represented by a lawyer.

Neither the judge nor the court staffers can give legal advice.

"I was telling my daughter, and she was saying, 'You need to talk to somebody,'" Barrett recalled. She thought about going to a free legal clinic offered by Memphis Area Legal Services, she said, "but when you're the only sole support in your household, you can't just take off days."

When the Tennessee Justice Center gets the rare call from a patient drowning in hospital bills, Johnson or her staff will call their contacts at that hospital.

"We'll say, 'This is a really heartbreaking story,' and a lot of times they'll just write the bill off," she said. "I don't know if that's because they know that we know our way to the media, but we don't necessarily threaten that. But they see us on the news a lot."

Constrained by the Law

 

Before she ran for Shelby County General Sessions Court judge in 1998, Moore was a public defender trying capital cases. She was starting to get burned out, but she didn't want to leave public service.

She won that election and the two since.

Moore has an easy rapport with attorneys Settle and Pritchard. And she tries to maintain a firm, but friendly demeanor with defendants.

In late May, she told a courtroom packed with defendants that she'd been where they are: Sued by creditors and having her wages garnished.

It was back in the 1980s, Moore said during an interview in her chambers, when she was a new attorney with the public defender's office.

"I had a husband who walked off, left me with the kids, stopped paying child support and kept it moving. And I struggled," she said.

She filed for bankruptcy in 1995.

Her empathy surfaces on her Facebook page, where she has posted articles about a subprime auto lender and an essay about the insecurity of a life in poverty.

Years ago, she took a stand when she heard cases involving car lenders who charged what she saw as exorbitant interest rates.

"I would strike it out and say: '32%? That is unconscionable.' That's the legal word you can use to say, 'I ain't doing it,'" she said.

In response, the creditors' lawyers sent letters reminding her that the law allowed them to charge the contractual interest rate.

"I just stopped striking it out because there was really no gray area with that. The law said this is what it is."

Moore said she can't be — and isn't — swayed by the relative power of the parties involved, even when the plaintiff is a massive, profitable health care system and the defendants are often poor and without counsel. "If you start factoring that in, then you become biased."

In April, Moore heard the case of a mother of three who owed more than $3,000. In her slow pay motion, the defendant proposed paying $30 per month.

Moore turned to Settle. "What do y'all need on that?" she asked.

At least $200 a month, Settle replied.

"I can't do $200," said the defendant, who works at a warehouse.

Moore then turned to the defendant's sworn affidavit of income and property. The mother's $2,000 monthly income left her $1,300 in the red.

Moore zeroed in on the ages of her sons (11, 17 and 19) and the defendant's sizable clothing allowance and food budget. They were old enough, Moore reasoned, to sacrifice a little so their mother could pay more.

The 11-year-old is autistic, nonverbal, wears diapers and can only eat pureed foods, the mother told the judge. Moore shared that an elderly relative was on a similar diet, but she didn't cut the defendant a break.

"Even with what you told me, I think you can do $100," she said, before signing a court order directing the defendant to pay $130 per month.

On the same morning Barrett and Nelson were in court, a Shelby County Schools kindergarten teacher came to confront a $6,800 debt.

Settle asked for $140 per month. The teacher countered with $50 a month, but the judge seemed offended.

"I won't even consider it," Moore said. The teacher's husband, who'd accompanied his wife to court, spoke up, but Moore cut him off.

"You married a grown-ass woman," Moore snapped.

"Please don't curse," the teacher said.

"I apologize," Moore said quickly. "It's just frustrating."

Taped to a door in the judge's chambers is a prayer that says in part: "Help me to treat others today as I desire to be treated."

She said she reads it every time she heads to the bench.

"I want to do and say what is right and pleasing to God because sometimes these folk, honey, they'll make you want to cuss," she said.

Debt That Will Follow Her to the Grave

 

After Moore heard the rest of the cases on the docket that January day, she called Barrett's name again.

Barrett stood, and Settle asked the judge to set her payments at $100 a month.

The judge agreed, denying Barrett's motion to pay $40 per month.

"This is going to be my last time setting this up," Moore said sternly. "You gone be paying on this for many, many months to come."

Months later, Barrett was still bothered by the outcome.

"If you know I can't pay $40, why you think I can pay $100?" Barrett said.

If she'd had a chance, she would have told the judge she was perpetually late on her utility bill and sometimes, she's had to let her car insurance lapse because she can't afford it. "She don't take but a few seconds to make that sentence. It was just moving them in and moving them out. They don't have no kind of empathy for people."

Between February and May, Barrett managed to make her payments on time, by shorting other bills and relying on payday loans. But this month, she missed her payment due date.

If Methodist doesn't add any interest to Barrett's debt and she pays as ordered, she will pay it off in 330 months.

She will be 90 years old.

Not long after her day in court, Barrett filed her 2018 taxes.

She made $13,800.

"It's in the hands of God now," she said. "There's only so much I can do."

 Wendi C. Thomas is the editor of MLK50: Justice Through Journalism. Email her at wendicthomas@mlk50.com and follow her on Twitter at @wendicthomas.

A policy review follows months of turmoil at the cancer center, which pledged an overhaul, including new rules on public disclosure and limits on outside profits.

This article was first co-published on Thursday, April 4, 2019 in ProPublica and The New York Times.

Top officials at Memorial Sloan Kettering Cancer Center repeatedly violated policies on financial conflicts of interest, fostering a culture in which profits appeared to take precedence over research and patient care, according to details released on Thursday from an outside review.

The findings followed months of turmoil over executives' ties to drug and health care companies at one of the nation's leading cancer centers. The review, conducted by the law firm Debevoise & Plimpton, was outlined at a staff meeting on Thursday morning.

It concluded that officials frequently violated or skirted their own policies; that hospital leaders' ties to companies were likely considered on an ad hoc basis rather than through rigorous vetting; and that researchers were often unaware that some senior executives had financial stakes in the outcomes of their studies.

In acknowledging flaws in its oversight of conflicts of interest, the cancer center announced on Thursday an extensive overhaul of policies governing employees' relationships with outside companies and financial arrangements — including public disclosure of doctors' ties to corporations and limits on outside work.

The review was one of several steps the nonprofit cancer center has taken in the wake of reports last year by The New York Times and ProPublica that several top executives and board members had profited from relationships with drug companies, outside research ventures or corporate board memberships.

Those revelations prompted Memorial Sloan Kettering, based in New York, to hire outside firms to conduct inquiries into those relationships as well as into internal allegations of ethical lapses.

The scrutiny of researchers' stakes in startups has intensified at a time when venture capitalists are betting millions of dollars on the next potential cure for cancer and when expensive treatments like immunotherapy have fueled public concern over rising drug prices.

The spotlight on the deals at Memorial Sloan Kettering also swayed other leading cancer centers, like Dana-Farber Cancer Institute in Boston and Fred Hutchinson Cancer Research Center in Seattle, to reconsider their policies.

Dr. Walid Gellad, director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, said the changes appeared to be more comprehensive than those in place at many other health care institutions.

"Memorial Sloan Kettering really does seem to be taking this seriously and this document, I think, shows it," he said, referring to the hospital's revised policies. "Kudos to them."

At the staff meeting, Mark P. Goodman, co-chairman of the law firm's commercial litigation group, told doctors that the review found "a number of instances of serious noncompliance with MSK's conflict-of-interest policies," according to a recording. A spokesman for the hospital, Mike Morey, declined to provide a copy of Debevoise's findings.

The conflicts and some profit-making deals — which were not specified at the meeting — did not occur through intentional misconduct, Goodman said. Rather, the review exposed inadequate oversight and a lack of established protocols for examining whether employees' and executives' affiliations with corporations could result in biased results that favored a company's products.

Goodman also said the review, involving interviews with 36 current and former employees and board members and an examination of 25,000 documents, did not find that the ethical shortcomings had hurt patients or compromised research. In an email, Goodman disputed the characterization of the findings as violations of rules and said the report did not conclude that top officials acted in a concerted way.

In his presentation, he referred instead to "noncompliance" with hospital policies and to instances where executives appeared not to have followed existing policies.

Scott Stuart, chairman of the cancer center's Boards of Overseers and Managers, said in an emailed statement: "We took a deep and honest look at what went wrong at our own institution, examined what was occurring in the wider cancer research community, and are putting in place best practices that will not only allow us to learn from our mistakes, but will contribute to best practices for the wider research community."

The cancer center has been reeling from the series of reports by the Times and ProPublica, including that its chief medical officer, Dr. José Baselga, had failed to disclose millions of dollars in payments from drug and health care companies in dozens of articles in medical journals.

Baselga resigned in September, and he also stepped down from the boards of the drugmaker Bristol-Myers Squibb and Varian Medical Systems, a radiation equipment manufacturer. The British-Swedish drugmaker AstraZeneca hired Baselga to run its new oncology unit this year.

Additional reports detailed how other top officials at Memorial Sloan Kettering had cultivated lucrative relationships with for-profit companies, including an artificial intelligence startup, Paige.AI, that was founded by a member of the cancer center's executive board, the chairman of its pathology department and the head of one of its research laboratories. The hospital struck an exclusive deal with the company to license images of 25 million patient tissue slides that had been collected over decades.

Another article detailed how a hospital vice president was given a nearly $1.4 million stake in a newly public company as compensation for representing Memorial Sloan Kettering on its board.

In October, Memorial Sloan Kettering's chief executive, Dr. Craig B. Thompson, resigned from the boards of Charles River Laboratories, an early-stage research company, and the drugmaker Merck.

Then, in January, Memorial Sloan Kettering went a step further, barring its top executives from serving on the corporate boards of drug and health care companies. Hospital officials also instituted policy changes to limit the ways in which its top executives and leading researchers could profit from work developed at Memorial Sloan Kettering, which admits about 23,500 cancer patients each year.

Goodman said at the staff meeting that the law firm had not found evidence of intentional wrongdoing — defined as "a conscious decision to engage in misconduct" — by the hospital's leaders or board members.

"Although we did not identify evidence of breaches of fiduciary duty, we did find that processes and controls for the review and management of senior executive and board-level conflicts were deficient and resulted in instances of noncompliance with MSK policies," Goodman said.

Specifically, he noted, plans to manage executive conflicts of interest, a requirement at the hospital, "were not implemented because it was felt to be unnecessary or because there was a failure to realize that a management plan was needed."

Goodman also said that hospital leaders' corporate ties were handled differently from other employees. Beginning in 2014, senior executives were no longer required to vet financial relationships with a conflict-of-interest advisory committee because the hospital felt the committee should not be asked to make decisions about executives to whom it reported. While Goodman said that rationale made sense, the general counsel's office — tasked with overseeing the leaders' conflicts — did not put in place formal procedures to examine potential problems.

"As a result," Goodman said, "conflicts were allowed to persist without formal firewalls in place."

Hospital leaders also did not always disclose to faculty and staff when they had relationships to companies whose research was being conducted at Memorial Sloan Kettering, Goodman said.

The policy changes that Memorial Sloan Kettering announced on Thursday include the creation of a board committee to focus on overseeing conflicts, an existing hospital policy that the law firm learned had not been carried out.

The hospital also said it would disclose financial interests of faculty members and researchers on its website and create a more centralized review of conflicts between employees' work at the hospital and their outside duties.

Other changes included new limits on how income is distributed from research discoveries that originate at Memorial Sloan Kettering, and regular audits to ensure the hospital is complying with its own rules. The cancer center reinforced its earlier statements that many profits from outside work should flow back to MSK research.

Heather H. Pierce, the senior director for science policy and regulatory counsel at the Association of American Medical Colleges, said the hospital decided to undergo a review that "was far broader than the initial concerns that were raised." As an outside member of the task force recommending changes, Pierce noted that "there was nothing that wasn't up for discussion."

Gellad, of the University of Pittsburgh, said the issues raised at a prominent institution like Memorial Sloan Kettering have placed others on notice. "We've seen what happens when these conflicts, even if they're only perceived, they lead to problems in terms of how an institution is judged," Gellad said. "Every institution, if they're not, should look to see how that impacted Memorial Sloan Kettering."

Katie Thomas covers the pharmaceutical industry for The New York Times.

Hospital leaders released the scathing government inspection report this week, along with a plan to correct significant lapses in patient care.

This story was first published Tuesday, February 26, 2019, by Pro Publica and the Houston Chronicle.

By Mike Hixenbaugh, Houston Chronicle, and Charles Ornstein, ProPublica

Six days after Thanksgiving last year, a 73-year-old woman showed up at Baylor St. Luke's Medical Center in Houston. Her body was retaining too much fluid after a dialysis treatment, and she was in need of emergency medical care.

What happened next could have killed her.

Hospital staff put in a request to give the woman a blood transfusion, but the order was meant for another patient with a different blood type. Fortunately, the St. Luke's laboratory caught the error, sparing the woman from harm.

Four days later, however, hospital staff committed a similar mistake, only this time workers in the lab didn't notice when a blood sample arrived with another patient's blood in it. As a result, a 75-year-old woman was given the wrong blood, mistaken for a patient who had been in her ER room immediately before her.

She died the next day after repeated bouts of cardiac arrest.

The fatal mistake followed a pattern of blood labeling errors at St. Luke's during the past year, according to a scathing report issued last month by the Centers for Medicare and Medicaid Services and made public Tuesday by the hospital. The government report came after a yearlong investigation by the Houston Chronicle and ProPublica that documented numerous lapses in patient care at a hospital once regarded as among the nation’s best for cardiac care.

St. Luke's leaders released the 99-page inspection report on Tuesday, along with a document detailing the hospital's efforts to correct the problems. In a letter posted on the hospital's website, St. Luke's CEO Doug Lawson called the government's findings "deeply disappointing." He also wrote that he expects regulators to find additional problems when they return to the hospital for a comprehensive audit of patient care practices in the coming weeks.

Lawson said newly hired St. Luke's executives have already made several changes to bring the hospital into compliance with federal standards, including an improved training program to ensure blood samples are labeled properly. The hospital has also enhanced its quality improvement program, Lawson wrote, and officials have made it easier for staff to report patient safety concerns to senior leadership.

"It is our responsibility to learn from these mistakes, and we take this responsibility very seriously," Lawson wrote. "An incident like this should never happen."

Dr. Ashish Jha, an expert in hospital quality, reviewed the government's findings and said it appeared St. Luke's was struggling to meet basic care standards. The labeling mistakes, he said, seemed indicative of "a broader systemic problem."

"These are really basic errors that I didn't really think happened that often anymore," said Jha, who directs Harvard University's Global Health Institute.

St. Luke's appeared to miss warning signs in the months prior to the deadly mistake, according to the government report.

An internal hospital committee identified problems with the way staff had been labeling blood samples a year ago, according to the federal report, but the unsafe practices continued. In total, regulators identified 122 incidents from a recent four-month period, from September to January, in which St. Luke's staff made blood labeling errors, some more serious than others.

These problems were compounded by a short-staffed nursing crew that lacked training in how to detect adverse reactions during transfusions and a hospital laboratory with too few workers on staff to always catch potentially fatal labeling mistakes, according to the government report.

The violations are the latest in a series of setbacks for St. Luke's. The Medicare agency cut off funding for heart transplants at St. Luke's last year after the Chronicle-ProPublica investigation documented an outsized number of patient deaths and unusual surgical complications following the procedure in recent years.

The news organizations also reported on poor outcomes following heart bypass surgery, repeated complaints about inadequate nursing care, a recent rise in the number of deaths after liver and lung transplants, and a physician's lawsuit alleging that he was retaliated against after raising concerns that some of his patients had received unnecessary medical treatments in intensive care units.

Hospital officials said repeatedly that problems identified by reporters had already been corrected, and they denied retaliating against the physician.

After the botched blood transfusion, hospital leaders have taken a different tack. Days after the inspection, the hospital’s board of directors announced it had dismissed CEO Gay Nord and three other top executives.

The report released Tuesday details how the fatal mistake occurred.

Medical staff had drawn blood from an ER patient on Dec. 2 but failed to discard the sample after that patient was discharged. The vial of blood was still in the hospital room when staff brought in a 75-year-old woman who had been rushed to St. Luke’s by ambulance. When a doctor ordered a transfusion, staff mistakenly sent the tube containing the prior patient's blood sample, placing a new label over the original.

Jha, the quality expert, said the double-labeling error was an egregious mistake, but with the proper checks in place, it shouldn't have led to the woman’s death.

"A lab should never accept a specimen that has two labels of two different patients," he said.

Government inspectors found that the lab at St. Luke's did not have a policy on whether technicians should accept blood samples with multiple labels.

The situation was made worse by poor nursing care, regulators wrote. Many nurses at St. Luke's had not been trained on how to identify signs of a blood transfusion gone wrong. Staff continued to give the 75-year-old woman the wrong blood despite a worsening adverse reaction, according to the report.

The government report details numerous incidents in which St. Luke's nurses failed to track patient vital signs while administering transfusions, making it impossible to detect problems.

"The findings present a likelihood that serious blood transfusion reactions may not be detected in an expeditious manner, which could delay appropriate response and treatment, and could result in death or injury to a patient," inspectors wrote.

The hospital did not make changes in the weeks that followed, according to the report. In a meeting at St. Luke's on Jan. 10, more than a month after the death, hospital leaders acknowledged they still were not tracking labeling mistakes.

The hospital has since hired several new officials to guide St. Luke's on its "journey back to excellence," Lawson wrote in his letter Tuesday.

"This is a challenging time for our hospital," he wrote. "While we cannot go back and change the past, we can focus our efforts on recreating the Baylor St. Luke's you have known and trusted."