Texas Pharmacy Owner Sentenced in $41M Health Insurance Fraud
Why isn’t BUCA being shut down for defrauding Medicare Advantage?
Introduction
On October 31, 2024, The Insurance Journal posted Texas Pharmacy Owner Sentenced in $41M Health Insurance Fraud. It seems that Ivor Jolla and Shannon Turley were found guilty of health insurance fraud and he was sentenced to ten years in prison and $41 million in restitution. She has yet to be sentenced. Yes, this has nothing to do with the health insurance fraud the big insurance companies, Blue Cross, United, Cigna and Aetna (BUCA) perpetrated against Medicare Advantage, but we have to wonder why this little guy got put in the penitentiary and BUCA is still trampling all over medicine and literally killing people.
The Problem
Two of the past three weekly episodes of this channel have been about fraud perpetrated by one or more, or all of the big payers. Definitive proof was provided and we reported it to you. Why, then, does this pharmacy owner wind up behind bars and these big payers just get off scot free, without even any fines that we have been able to find? We are going to suppose that levying fines would just increase costs for all as the big payers simply pass fines on to the patient/consumer. Why aren’t we going after (legally of course) the big, fat cat business people who are holding us hostage and very very literally killing people every day with complication, denials, delays, pre-authorizations and all the other tactics they use to increase astronomical profits?
Side Note
We published Data Science Would Have Revealed Fraud Perpetrated by the Major Health insurance Carriers last week and have to wonder why the fraud described above was only uncovered after Jolla and Turley had stolen $41 million worth of “headache sprays, pain creams, and scar creams.” Maybe your humble reporter knows something that all the greatest minds in healthcare finance do not? Cutting internal costs is just as effective at increasing profits as acquiring more revenue. More on that later when we discuss how we cut costs.
The Solution
The solution, of course, is to put health insurance companies out of business, and we are going to show you how, right here and right now. First, you don't want greedy profit-above-everything, including murder, business people in charge of your healthcare. The Commonwealth Fund identified several problems in their paper “U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes” That basically boiled down two problems:
Health insurance is too expensive
Patient education is largely ignored
If we can address these two problems, we can fix the US healthcare system.
The Concept
Health insurance companies have two inputs: a patient and a procedure, and one output: a check to the practice for the procedure performed. That is it. If we automate the process between the input and the output, then we have eliminated everything the insurance company does. The only other thing we need to add would be some way to educate and incentivize the patient on how to live a healthy lifestyle. That would result in fewer claims, causing reduced rates for everyone.
The Execution
We at Sentia have designed and developed a solution that completely automates health insurance. We provide the Electronic Medical Records (EMR) system to the practice, and when they code a patient encounter, we pull out the procedures performed and pay for them in real time. There is no adjudication, no denials, no medical coding, no big buildings, no people and most importantly, little to no cost once the system is built. For this service we charge $10 per month plus the actual cost of the risk. Remember that according to iii.org, your health insurance company only returns 53% of your premiums as benefits. We can return the 47% they waste, on average to the patient, in lieu of the previously stated $10 per month, plus the actual cost of the risk. There are other efficiencies we will explain, and a way to manage chronic, behavior-based disease.
Patient Education
Also remember that treatment for chronic, behavior based disease consumes 84%, or $3.7 trillion, of the $4.4 trillion spent on healthcare each year in the US. The average of avoidable deaths per 100,000 in OECD countries is 225. In the US it is 335, or about 1/3 higher. If we could bring the US average down to the OECD average, we would save about $1.2 trillion. That is a further reduction in costs of about a quarter of the total.
How do we do this? We offer financial incentives for people who live a healthier lifestyle as measured by our built-in health and wellness system. This system takes into account measurements taken at the primary care physician’s practice, like height, weight and blood pressure, plus things screened for in blood work. Additionally, there is a mental health screening right in the wellness package. This system looks at all these factors and then prescribes patient education based on the results. At Sentia, this is part of the system. We can tell when the patient opened the patient education and how long they spent reading it, and offer a small discount for simply doing so. A larger discount is offered for reading and following the education, as evidenced by better results in the patient screening.
The Finances
Let’s look at big round numbers. Let’s say we can save the patient about 40% on their health insurance up front. Let’s say that we save the people of the US another 25% by being educated about healthy living and getting to the average OECD deaths per 100,000. We know that eliminating medical coding, providing a free EMR to the practice and putting compliance and efficacy reporting into that system will save each and every practitioner an additional $77,000 per year that they currently spend. That however is only about 2% of the total, so we’ll just ignore it. If we total all that up, we see more than 60% savings. That means that we would have not only the best healthcare on the planet but also the cheapest.
Conclusion
We have shown a way to save about 60% from the cost of health insurance and have addressed both of The Commonwealth Fund’s two conclusions about health insurance in the US: cost and education. We have all of this written and deployed in a prototype application. The only thing we really need to get this all started is to clean up that application and turn it into an enterprise application with logging, administration and redundancies in hardware. We will need funding, probably about $100 million over the first two years, like other startup health insurance companies. For comparison, United Healthcare had revenue of $371.6 billion and net earnings of $22.3 billion. With about 60% savings we should service and retain 90% or more of the 300 million insured people in the US. That gives us a revenue of $36 billion, however, everything in our system is automated so that is a $32.4 billion profit at a 90% profit margin.
This figure shows that this is a viable business proposition.
We have shown a way to make patients healthier by educating them on the consequences of their behavior, and a way to capitalize on that to the sum of $1.2 trillion or about 25%. If we add that to the process automation savings of our solution, we are in the ballpark of more than 60% savings in total. We already have the best doctors and the best equipment; we just need to implement the above detailed framework to give them all the tools necessary for success.
We have this system in prototype now, fully functioning.
Contact us here or on our site and we will be happy to provide a demonstration of the fully functional prototype.
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We have built a comprehensive health information system to keep the patient healthy and on the right track with the ability to incentivize healthy living. Implementing this system should be fairly simple and will completely revolutionize the way healthcare is paid for, saving countless lives. We have shown a way to use this system to make the best healthcare system in the world also the most efficacious and the most affordable, and a way to move toward value-based care.
See the video version of this article on YouTube