Double-Dipping by PPP Healthcare Loan Recipients
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Double-Dipping by PPP Healthcare Loan Recipients

Despite Massive Government Cash Infusions, Healthcare Companies Belly Up to the Public Trough for More

Philip Mattera

While healthcare providers have faced significant challenges during the COVID-19 pandemic, it was still surprising to see that sector show up as the largest recipient of assistance under the Paycheck Protection Program.

That’s because hospitals and other providers already were receiving 10s of billions of dollars in federal aid from other CARES Act programs.

To the growing list of PPP defects, we can add: double-dipping by healthcare providers.

Take the case of Bronxcare, which operates facilities in New York City. Two of its units were revealed to have gotten PPP loans worth $2 to $5 million each. Previously, it received more than $100 million from the HHS Provider Relief Fund.

Some of the double-dippers have checkered records when it comes to regulatory compliance, including issues relating to billing irregularities.

The Great Plains Health Alliance, a health system based in Kansas, received seven PPP loans worth up to $11 million. Previously, it received more than $24 million in grants under the Provider Relief Fund as well as $16 million in expedited funds through the Medicare Accelerated and Advance Payment Program.

The Erie County Medical Center in Buffalo, N.Y., received a loan worth $5 million to $10 million after getting more than $40 million from the Provider Relief Fund and $35 million-plus in accelerated Medicare payments.

Bronxcare, Great Plains and Erie County Medical are all non-profits, but double-dipping also can be found among for-profit healthcare providers.

Vibra Healthcare, which operates hospitals in 18 states, received at least 16 PPP loans worth between $24 million and $56 million. As ProPublica pointed out in its investigation of the company, Vibra applied for the loans in the names of numerous subsidiary LLCs rather than the parent company name.

Triple Dipping

Zwanger-Pesiri Radiology, which operates imaging facilities in New York City and Long Island and received a loan worth $2 million to $5 million, also got $4 million from the Provider Relief Fund and $9 million in accelerated Medicare payments.

Covid Stimulus Watch contains data on more than 40 healthcare companies that got PPP loans as well as assistance from other CARES Act programs.

These overlaps are made more controversial by the fact that some double-dippers have checkered records of regulatory compliance, including issues relating to billing irregularities. For example, in 2016 Vibra Healthcare had to pay $32.7 million to resolve a federal False Claims Act case alleging that it billed Medicare for medically unnecessary services. In 2019 it paid $6.2 million to settle a Medicare fraud case.

In 2016 Zwanger-Pesiri paid $10.5 million to settle allegations it billed Medicare and Medicaid for procedures not ordered by physicians. Along with the usual civil allegations, the company pleaded guilty to two counts of criminal fraud.

In 2013, Erie County Medical Center paid $268,000 to the New York State attorney general to resolve allegations of excessive Medicaid billing. And it paid $335,000 to the U.S. Labor Department for wage and hour violations.

Monitoring Assistance Needed

The healthcare providers may have broken no rules in applying for loans while also receiving assistance from other COVID-19 programs. However, their ability to do so points to the need for the federal government to take a more coordinated approach to CARES Act assistance.

The fact that some of the double-dippers have a history of misconduct—including cheating the same federal government now awarding them grants and loans—highlights the need for even greater scrutiny.

Featured image: Erie County Medical Center, Buffalo, N.Y.

July 20, 2020