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Dannenhoffer’s Allegation of Profiteering at CCO Shows Problems with Secrecy and Public Money

In his lawsuit filed this week in federal court in Eugene, Roseburg pediatrician and former Architrave CEO Dr. Bob Dannenhoffer alleges the Architrave board voted to delay correcting overpayments to physicians -- a vote made in secret because CCOs are exempt from public meetings laws.
January 29, 2016

A lawsuit waged against an operator of Medicaid services for one of the state’s coordinated care organizations has produced damning allegations of Medicare and Medicaid fraud that were made in part because of the secret environment that state policymakers have created for the CCOs to manage care for people on the Oregon Health Plan.

In his lawsuit against his former employer, Architrave, Dr. Bob Dannenhoffer alleges that the Architrave board overpaid the Douglas County Independent Practitioners Association for family planning services, but the board -- meeting in secret -- voted to delay correcting those overpayments.

The CCO boards are allowed to make decisions about how public dollars are spent locally, but the public has no knowledge of their actions because the boards are not subject to state transparency laws, creating an environment devoid of accountability, where only a lawsuit might bring their decisions to light when trouble occurs.

Architrave Health is a managed care organization that serves Medicaid members on behalf of the Umpqua Health Alliance in Douglas County, including Roseburg. It’s owned by the local hospital, Mercy Medical Center and the local physician’s organization, the Douglas County Independent Practitioners Association, or DCIPA, the doctor’s group that had benefited from the overpayments.

Rep. Mitch Greenlick, D-Portland, has once again introduced legislation that would require the 16 CCO’s boards of directors to meet openly according to public meetings laws -- public oversight that has not hindered the state’s very successful public medical school and top tier hospital, Oregon Health & Science University.

Greenlick said Thursday the court case “absolutely” strengthens his argument that the CCO boards are not operating with enough transparency, and that their handling of billions of public Medicaid dollars needs to be examined with more public scrutiny.

In the past he has been blocked in his transparency efforts through the lobbying of the Coalition for a Healthy Oregon, which, along with the Douglas County Physicians PAC, has been a large source of campaign cash for Democratic leaders, including former Gov. John Kitzhaber and Sen. Alan Bates, D-Medford, who has been forced to raise large amounts of money to beat back two tough re-election battles.

Architrave is hardly the only CCO that has been accused of profiting from public largesse because of secrecy over decision-making. In Klamath County, Cascade Health Alliance has been accused of shutting out nurse practitioners from its network so that it doesn’t have to share state revenues with them.

The more limited network has meant that patients have had long wait times to see providers, according to Fabrice Dolce, a director of a behavioral health clinic in Klamath Falls. Since the CCOs are paid the same amount per member per month regardless if they actually treat all of their patients, Oregon has created a perverse incentive for the CCOs to provide as little care as possible, so long as they still can meet a minimal set of quality metrics and not overwhelm emergency rooms, which would increase their costs.

As Architrave CEO, Dannenhoffer insisted that the salaries of doctors in DCIPA’s subsidiary Umpqua Medical Group be independently reviewed to make sure they reflected fair market value. Some were too high, according to the complaint cited in the Roseburg News-Review.

The Umpqua Medical Group review showed doctors were receiving kickbacks, including extra payments when they prescribed certain drugs or made referrals to some health services for Medicare patients, in violation of federal law. According to Dannenhoffer, Medicare had been improperly billed for $10 million over four years.

Dannenhoffer first filed a Medicare fraud complaint against Architrave with the federal government a year ago, and was fired weeks later. The lawsuit claims that firing him for that disclosure violated the law, and seeks monetary damages as well as his reinstatement as the company’s CEO. The Roseburg pediatrician was reached for comment Thursday, but referred all questions to his attorney.

His attorney, Jennifer Middleton, told The Lund Report that Dannenhoffer is “doggedly determined” to return to his old job because his passion is serving the low-income residents of Douglas County, and that can primarily be achieved at Architrave.

Pac/West Communications, which represents Architrave and COHO, denounced Dannenhoffer’s lawsuit in a statement: “We are disappointed that this action has been filed and we deny that any of Dr. Dannenhoffer's claims have any merit. Dr. Dannenhoffer was terminated, a year ago, for reasons entirely unrelated to issues he now raises in this lawsuit.”

Chris can be reached at [email protected].

Comments

Submitted by Nick Benton on Sat, 01/30/2016 - 07:19 Permalink

As a full time surgeon and Board Member of one of the last larger physician owned, private multi specialty group practices left in Oregon, I can tell you that Medicaid is tough to manage.  If you take capitation, you can be accused of poor access and withholding care.  If you sub-contract as a fee for service provider, you can be accused of churning patients at a high volume unnecessarily.  Even then, the rates you get paid barely cover overhead.  It will be interesting to see the details of this case.  I am always skeptical of allegations of greedy doctors.  Individual doctors here and there, yes.  Most of the doctors in the entire county?  Unlikely.  Keep in mind the whistleblower is in for a huge payday if he prevails.  Going forward, many physicians will be making hard decisions about whether they can even afford to do business with the state Medicaid CCO's.  Only hospital employed physicians may be able to do this, as they are insulated from the financial aspects.  That is, until some business guy who is now their boss starts cracking the whip......

Dr Nick Benton 

Submitted by Darryl George on Mon, 02/01/2016 - 14:55 Permalink

I've been filing complaints to various state and federal agencies for years regarding the abuses and frauds being perpetrated here in Douglas County by many of the organizations that receive state and federal funds.  Many procedures, imaging, and other services are more expensive here than anywhere else.  Providers are continually padding their computer-generated and "pre-filled out" chart notes with fraudulent physical examinations that did not occur, according to the patients when asked.  When providers bother to note the time they supposedly took with the patients, it's usually over-inflated too, again per patients.  

State and federal law prohibits discrimination against patients for treatment, but providers have been treating OHP patients differently for years.  If you have a good commerical insurance plan and need pain medications, you can often get it.  If you have OHP and common pain problems, you are denied outright.  They claim it's because it's a non-covered benefit.  So are many antibiotics, yet they will write for them, even for non-life threatening conditions.  Why can't they write for non-covered pain medications in the same manner?  They could, but they CHOOSE not to.  

Letters to the last two and our current governor went unheeded.  Letters to our state and national congressmen went unheeded.  Letters to the President of the U.S., Medicare, OHA, the VA and other agencies went unheeded.  Letters to multiple state and national news agencies, even The Lund Report, failed to generate any interest.  It wasn't until one of their own doctors, an insider, complained that anyone took notice.  And even then it took a lawsuit to bring out these alleged abuses.  These various organizations have made big donations to politicians for years.  Did that help them to get the laws they wanted on the books and to block laws they didn't like?  There is no transparency in their actions and that's how they like it, even when they have been using state and federal funds.  

Multiple providers have benefited too for years off the bonuses they earned for denying services and treatments to patients.  More covered services mean smaller bonuses; less covered services and more denials means bigger bonuses to their organizations and their members.  Dr. Dannehoffer himself has benefited in multiple ways through this process for years too by being a member and in their employment.  I filed Medicare fraud notices long before Dr. Dannenhoffer ever did.  Maybe he only responded when Medicare contacted him regarding my complaints?  And then maybe he realized that he better "self-report" their abuses before they would get hit with multi-million dollar fines and some directors, like himself, might even face jail time.  I look forward to all the media coverage over this lawsuit and to see how Mercy, DCIPA, UHA, and Architrave pull out all the plugs to safeguard their money-making ventures.

Dr. Darryl George

Submitted by Chris Gray on Tue, 02/02/2016 - 10:18 Permalink

In response to the comment by Dr. Benton, the federal whistleblower complaint filed by Dr. Robert Dannenhoffer seeks his reinstatement as CEO of Architrave so he can continue his work to improve the delivery of health services to low-income Douglas County residents. His complaint, if successful, entitles him to back pay and compensation for the damage to his reputation, but does not entitle him to any portion of the $10 million of improper Medicare billings. Dr. Dannenhoffer does not assert in his complaint, and does not believe, that most doctors in Douglas County are greedy.

Submitted by Thomas S Duncan on Sat, 02/13/2016 - 07:52 Permalink

I would love to see an actual accounting --  It has been my impression since the beginning of the transition from medicine as a profession to "healthcare" as an industry (say the last 25 years or so), that the prime beneficiaries have mainly been non-physician managers, shareholders of for-profit corporations, and the occasional greedy doctor who violates professional ethics to make the profiteering possible.

The majority of physicians, and the overwhelming majority of paitients are not well served by the current developments in "healthcare".