Missouri Attorney General Josh Hawley's office has opened an investigation into a firm associated with the owner of Fulton Memorial Hospital.
"Our office is actively investigating this matter," Press Secretary Mary Compton said in a statement Wednesday. "Those who violate the law will be investigated and prosecuted to the fullest extent of the law."
Hospital Partners Inc. is being investigated on accusations of fraudulent billing procedures. Jorge Perez is part owner of that company and is listed as vice president, treasurer and director of Hospital Partners Inc., according to the company's 2017 annual report filed with the Florida Secretary of State. The president/secretary/director of Hospital Partners is David L. Byrns, investigated by Missouri Auditor Nicole Galloway.
As previously reported by the Fulton Sun:
On Aug. 9, Galloway released an audit of Putnam County Memorial Hospital - a 14-bed facility in Unionville. She said her office uncovered $90 million in inappropriate lab billings by hospital leadership and associates.
In September 2016, the Putnam County Hospital Board hired Byrns and Hospital Partners Inc., to take over management of the hospital.
Galloway's news release stated a billing scheme was uncovered in which the lab services company also owned by Byrns and Hospital Lab Partners LLC conducted lab work across the country. The audit said Hospital Lab Partners billed lab work through Putnam County Memorial Hospital to insurance companies using the hospital's account. In exchange, Galloway said, the hospital would receive a cut of the insurance payouts.
The hospital received more than $90 million since November 2016, passing most of the money along to Byrns' lab company and its affiliates, Galloway said.
"However, during this time, the vast majority of billings were for patients who had never been to or received services from Putnam County Memorial Hospital," the audit release said. "Instead, the hospital submits the bills for their services to the insurance companies, funneling millions of dollars through the hospital and reducing it to what is essentially a shell organization for labs across the country."
Galloway also said the hospital paid more than $10 million in lab management fees.
According to CBS News and other news sources, Hospital Partners Inc. has filed a counter lawsuit against Galloway in Putnam County Circuit Court in late March. The lawsuit claims Hospital Partners Inc. was illegally booted out of the management role at Putnam County hospital and that it is seeking $2 million in damages from the hospital's board of trustees and Galloway. The board of the directors of Putnam Memorial is being represented by attorney Joe Bednar, who verified the hospital was bring sued by Hospital Partners Inc.
"There's nothing simple about the issues presented," he said of the complex situation. "We're now getting sued by them."
Other billing practices by Hospital Partners Inc. have also been questioned, including filing insurance claims through small rural hospitals which are reimbursed at higher rates.
Fulton Memorial's involvement
In September 2017, Perez and other officials from his company EmpowerHMS announced they purchased Fulton Memorial Hospital. Last March, the Fulton Sun confirmed Perez' company had not purchased the facility after all, and it was still owned by NueHealth, a Leawood, Kansas firm.
"He's the management company," Isabel Schmedemann, former chief executive officer of the Fulton hospital, said at that time. "It (the sale) has not closed. He's the one signing our paychecks."
On Wednesday, Norman Davis, who said he is the chief financial officer of the Fulton Medical Center, confirmed two things. Schmedemann is no longer an employee at Fulton Medical Center, and the sale still is not completed.
"She's no longer with the company," Davis said, adding, "The purchase is still going on."
He also said the interim CEO of Fulton Medical Center is Ravi Raj, who was not available for comment.
As of Wednesday, EmpowerHMS was still not listed as a business entity in Missouri, according to the Secretary of State's office. The office also had no listing of a Jorge Perez as a registered business agent.
According to EmpowerHMS.com, the company is located in North Kansas City, Missouri. Perez is listed on that website as CEO and Michael Christensen is listed as HMS-Hospital Network President. Christensen did not immediately return a phone call.
Fulton Medical Center, formerly Callaway Community Hospital, is a 37-bed facility. It does not appear to have a current website.
Callaway Community Hospital also owned and operated Fulton Medical Clinic at 850 W. Hospital Drive in Fulton. Andrea Bedrosian, marketing and public relations department employee with the clinic and hospital, said the clinic is open as normal for business and the clinic will soon be moving into the hospital building.