Villages Health where did all the money go?
 

The Villages has received over $361,000,000 in over payments from the FEDS.
The bankruptcy filings has the US taxpayers or Medicare listed as an unsecured creditor due 361 Million US $. Where is that money? That is $6500 per patient.
I noticed that the rent was paid to TV. The rent looks to be 1,135,000 per month, but no rent is forecast for October, Nov, or Dec in the pro-forma DIP budget.

- The Villages Health (TVH) ran a unique business model for a large health care provider serving predominately a senior community. Unlike just about ever other similar health care provider, TVH primary care operation has not accept traditional medicare, only specific Medicare Advantage plans.

- Upcoding, when more diagnoses than are actually present are reported to increase medicare payments, are very rare with traditional Medicare and are almost exclusively limited to home care. On the other hand, upcoding has been widely abused with Medicare Advantage plans because under MA plans, payments are made on a risk-adjusted basis meaning higher risk scores (based on reported diagnoses) lead to higher payments.

- Despite the fact that patients with traditional Medicare and supplemental plans are generally sicker and require more health care than Medicare Advantage plan holders, Medicare Advantage plans pay out, on average, 22% more per patient than those with traditional medicare.

- Without audited financial statements, including a detailed sources and uses of funds statement, it is impossible to figure out what happened to the $$$ referenced by the author of this thread. That being said, based on the bankruptcy filing information, the amount of reported assets relative to liabilities certainly indicates the money wasn't retained in THV surplus account.

- A Florida Bankruptcy Judge preliminarily approved a $39 million debtor-in-possession (known as DIP financing) plan for TVH. DIP financing is a last ditch effort to raise money, often when in bankruptcy proceedings, to stay in operation during restructuring. DIP lenders require extremely stringent terms to insure their capital is protected, such as hard collateral and being court selected to be the first to be paid within the debtors capital structure. Based on TVH's reported assets, there won't be much money left after paying off the DIP loan for either their other creditors and the money owed to Medicare.

- Below is a statement from Latham and Watkins, a firm hired to help CenterWell (Humana) in the acquisition of TVH Assets, while not taking on the Liabilities. One thing is for certain, CenterWell is diving into a hornets nest, as evident by the long list of attorneys with various areas of expertise, retained to guide them through this process. No one in their right mind would dive into a hornets nest without lots and lots of protection. One can only imagine how much money the health care provider will spend on attorneys fees, rather than providing health care.

The Villages Health (TVH), announced that it has entered into a "stalking horse" Asset Purchase Agreement with CenterWell Senior Primary Care, the nation's largest senior-focused value-based primary care provider. The agreement provides for CenterWell, the healthcare services business of Humana Inc., to acquire TVH's assets as a going concern, including eight primary care centers and two specialty care centers. A Court order approving the sale, following an auction process during which other parties may submit an offer to purchase TVH's assets, will be a condition of the transaction moving forward and closing.

Latham & Watkins LLP represents CenterWell in the transaction with a corporate deal team led by Washington, D.C. partner Brian Mangino and New York partner Amber Banks and New York counsel Richard Quay, with associates Alice Bradshaw, Lauren Stern, and Daniel Maggen. Advice was also provided on intellectual property matters by Washington, D.C. partner Morgan Brubaker, with associate Tyra Richmond; on healthcare regulatory matters by Washington, D.C. partners Jason Caron and Joseph Hudzik, Chicago partner Terra Reynolds, and Washington, D.C. counsel Nicole Liffrig Molife, with associates Chad Leiper, Megan Lich, Margaret Rote, and Danielle Scheer; on data privacy matters by Bay Area partner Heather Deixler, with associates Kathryn Parsons-Reponte and Priyanka Krishnamurthy Crissman; on insurance matters by Century City partner Kirsten Jackson and New York counsel Alexander Traum; on tax matters by Washington, D.C. partner Andrea Ramezan-Jackson, with associate Nolon Blaylock; on benefits matters by Washington, D.C. partner David Della Rocca and Washington, D.C. counsel Laura Szarmach, with associate Rebecca Fishbein; on labor matters by New York counsel Sandra Benjamin, with associate Jenny Bobbitt; on real estate matters by New York partner Dara Denberg and New York counsel Shira Bressler, with associate Sarah Jeon; on finance matters by New York partner Kendra Kocovsky, with associate Benedict Bussmann; on environmental matters by New York counsel David Langer, with associate Tal Carmeli; and on restructuring matters by Washington, D.C./New York partner Andrew Sorkin and Chicago partner Caroline Reckler, with associates Isaac Ashworth and Brian Rosen.

- Just reporting some relevant facts here, what actually happened to the $$ is up to ones interoperation of the facts.

I am sure the Sun will be telling us the facts of the case.

If you believe that have a slightly used bridge to sell.:pepper2:

Medical clinics serving mainly Medicare Advantage (MA) patients, such as TVH, generally operate very differently than traditional medical practices/ clinics. OP may be thinking about the business model of traditional medical practices. MA clinics operate differently and it’s complicated.

Perhaps much of the overpayment funds are with the Medicare Advantage insurance company(ies) that TVH works with under contract. The insurance company(ies) likely owes the US government (CMS) the overpayment. (CMS pays the MA insurer, and the insurer pays something to the MA clinic under terms of their contract.) But depending on the contract(s) between TVH and the insurance company(ies), the insurance companies may have the legal right to claw back overpayment funds from TVH for TVH’s mis-coding. Hence, the bankruptcy.

This is a business bankruptcy case so many details of TVH business dealings and contracts are not in the public domain and likely never will be. Speaking simply, business bankruptcy cases are about how much do the creditors and owners get from the bankrupt estate. In this case, the owners of TVH may get nothing for their equity stake after creditors, lawyers, etc get paid.

Don’t expect to see this bankruptcy case on a TV series. CMS overpayments are not rare. Each year, CMS makes billions of dollars of overpayments. And medical provider upcoding is also not rare.

CMS Takes Important Steps to Recover Overpayments from Medicare Advantage-2025-06-05

Medicare Part C Improper Payment Measurement (IPM) | CMS

I don’t understand how the government is involved. If the Villages was mistakenly over billing by $90 million a year, wouldn’t they be over billing the Medicare Advantage plans - UHC, Humana, and BCBS?

From my research, Medicare pays a fixed amount each month to the private insurance company offering the plan to cover your medical expenses.

Medicare pays the insurance company a predetermined, fixed monthly amount (often referred to as a "capitation payment") for each enrollee, regardless of the actual medical services used. Apparently this is about $1,000 a month!!!

The insurance company, not Medicare, is responsible for managing and paying for your healthcare services. When you receive medical care, the provider (e.g., doctor, hospital) bills the insurance company administering your Medicare Advantage Plan, not Medicare directly.

In Original Medicare (Parts A and B), providers bill Medicare directly for covered services, and Medicare pays its share (typically 80% for Part B services), with you covering the rest (e.g., 20% coinsurance).

In contrast, Medicare Advantage shifts the financial risk to the private insurance company, which receives the fixed payment and manages all claims.

So if the insurance companies were over billed, how is Medicare involved?

I’ve read all the posts so is there a simple answer to the question where did the $350 million go if that’s the right answer. They claimed assets of $50 to $100 million in the chapter 11.

That is only partially true. It is not a fixed payment in the Medicare Advantage system. CMS pays the MA insurance company a _risk-adjusted_ amount for each beneficiary. This means CMS’s MA payment to the insurance company is higher for sicker beneficiaries and lower for healthier beneficiaries. See the first link in my previous message. One aspect of this is a medical provider might upcode their services to make patients appear sicker so the CMS payment from the government is higher. Medicare Advantage is a complicated business model, not to mention the complex metrics for assessing the level of health for each MA beneficiary. It’s sort of like actuarial work and involves specialists and computer software.

The information is not in the public domain and likely will never be. I guess much (but not all) of the overpayments was/is with the MA insurance company(ies). See my first post how TVH health might be legally responsible for reimbursement. Only insiders and the government know. Others don’t.

I understand that inquiring minds want to know details but they likely will never get information. Come to think of it, there might be an opportunity for a new TV series about all of this.

So is that what happened here? The Medicare Advantage insurance companies were not over billed but Medicare overpaid on the capitation rate because TVH upcoded to make patients appear sicker than they actually were.

Even if you increased the capitation from $1,000 to $3,000, that would be $2,000 overpayment per patient so it would have to 45,000 patients to over bill $90,000,000.

Yes and the old adage, "It was fun while it lasted", comes to mind. One wonders how much of this is going on all over the country.

Since the court filing lists the US Government as a debtor I’m going to assume that that insurance companies are not involved and the US government is owed the $. If the money was spent on perks and bonuses for staff and docs any company that takes over will have a hard time retaining anyone.

If TVH gets away with all these overpayments something is really rotten in Denmark as Shakespeare used to say.

This kind of reminds me of the whole mortgage disaster, but on a different scale. In both cases, industry regulators created a moral hazard that provided the opportunity to make lots of money despite knowing the whole thing was a house of cards that would eventually come tumbling down. With subprime mortgages, the government wanted everyone to be able to own a home regardless of their financial capacity to actually repay the loan. Government guaranteed mortgages, coupled with significantly relaxed underwriting standards, created a moral hazard which allowed people to buy homes (or more expensive homes) than they could reasonably afford. Wall Street knew the loans were bad, but they didn’t care, they were making a fortune in the mortgage business and were all in. With Medicare Advantage plans, the moral hazard is the government (CMS) making risk-adjusted payments per MA patient, incentivizing upcoding to receive greater payments. In both cases, the opportunity to make lots of money now, despite knowing it’s not necessarily the right thing to do, wins out. Hence the term “moral hazard”. It’s a game of musical chairs, where everyone wins (except for taxpayers), right up until when the music stops playing.

That source is not necessarily the sole source of MA-related revenues TVH might receive. As I said, Medicare Advantage is complex. It’s not a simple HMO capitation model for medical clinics. Incentive bonuses and shared savings payments from CMS are among other possible sources of revenue for a MA clinic.

Anything specific about TVH is speculation since the records are not public.

TVH aside, is it safe to assume some of the revenue generated from upcoding is used by the Medicare Advantage Insurers to subsidize stuff like little to no monthly subscriber premiums, dental, hearing, vision, and other free stuff like health club memberships that aren’t available to those on traditional Medicare with a supplemental plan? It brings to mind the old adage, “if something seems too good to be true, then it’s most likely too good to be true”! There has to be a reason that Medicare pays, on average, 22% more per person on Advantage plans than traditional Medicare, despite the fact that people on traditional Medicare tend to be sicker and require more care? And if that is in fact the case, is it safe to expect the cost of Advantage plan premiums to increase and/or the benefits not available to traditional Medicare to begin to disappear?

Most of it is subject to the Federal Freedom of Information act, so the finances are public, as is everything involving the so-call "fraud", once that's settled.

The bankruptcy proceedings open up many records. The amount of debt and the top debters are available on the court website. Even the Daily Sunny could find it. The pro-forma DIP plan is also in court documents. What the new operator of the facilities will do with the business is not public but may be revealed in court documents.
The stalking horse should find out where the money went so they don't become a Judas Goat.

I signed up for TVH when it first opened and in a year was so disappointed that I moved back to Medicare Plan F.

The medical records by individual which was over coded is not available under the freedom of information act, that would be a patient privacy issue.

so even if they were available, not sure you can determine which was uploaded and which wasn't to get through the formulas to get to the overpayment amount. . .

Has the Morse family made any statement on the bankruptcy and the billing errors

The issue does not make the Villages look good so I would think that their public relations firm would try to get ahead of the issue.

It should all be available via FOI, other than patient names. If it was submitted to Medicare, it's a public document and subject to disclosure, with identifying information redacted.

There have been some posters who should have reasonable knowledge of what's been going on with TVH, but some media reports, suggest TVH's actions were more nefarious. I have no real clue how all this happened, but $361M seems far beyond a "misunderstanding" or "computer glitch". I have a former golfing partner who lost his medical license and served a significant prison sentence, for "over billing Medicare" and that was 7-8 years ago, before the Feds got real serious about routing out abuse.

"The Villages Health System LLC, which operates clinics for retirees living in the Villages in Central Florida, said in a July 3 court filing that it logged patient diagnoses that “were not clinically supported or otherwise did not meet Medicare coding and payment guidance.”"

(Villages Health System Sees $350 Million in Medicare Overcharges)

Call me crazy, but that sounds dangerously close to an admission of guilt.

Villages Health where did all the money go?

A legitimate question. Let me speculate with an analogy, since I doubt it is under the CEO's mattress:

You own Snowbird Enterprises, a company that manufactures and sells widgets solely to the US Government at $2.00/widget. You start with one factory and a staff of 6, but your business grows fairly rapidly due to the demand for widgets. You make some profit, and use that to build more factories, hire more people and attract new professional widget makers. Maybe there's some cash, maybe not, since the books pretty much balance. And because you were dealing with a government bureaucracy, both when setting up your business and as an ongoing concern, you hired outside consultants to make sure you were doing everything right, including the pricing of widgets. Those auditors tell you all along that everything is being done by the book.

Time goes by, like 12 years, and you decide to sell your widget business, so you start negotiating with Widget Mart. To your dismay, they look at your widget pricing and tell you they disagree with the consultants you've hired----it is their opinion that you've been manufacturing type xyz5 widgets, which the government is only allowed, by law, to pay $1.50 each. You look at the difference between xyz5 and the xyz4 widgets that you've been selling, and it still isn't clear who's right since the definition of these widgets is extremely vague and subject to interpretation. So you report to the government that you MAY have been charging too much for widgets. And of course that agency agrees that they paid too much and you now owe them $360 million.

But you don't have $360 million, not even close. You have buildings, and equipment that is generally only good for making widgets, payroll, and bills for utilities and supplies, but no cash---because that's where the money went

Simplistic example, but the general message is accurate.

It sounds like an admission that a mistake was made, nothing more. Actually, it may indicate nothing more than a difference of opinion on exactly what the diagnostic and billing codes actually require to meet the criteria set forth.

That's one possibility, I heard it was because all the hospital patients were only drinking water and not buying off the menu.

:mornincoffee:

That was a subsidiary of TVH-----Katie Belle's :1rotfl::1rotfl::1rotfl:

TVH customers/patients were impacted…
 

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Patients most likely also overpaid TVH facilities and doctors through their deductibles and copays due to the inflated procedure codes. For example if the procedure should have been coded to pay $100 and instead was coded to pay $200. Then the patient pays $200 in their deductible up to max deductible (and/or a percent of the $200 in their copay amount). Will these overpayments get reimbursements?

I know nothing about being a doctor, but surely have some experience with government requirements and "forms".

I get what you're saying and it makes sense, other than the shear magnitude of the error. It seems unlikely that such a disagreement over interpretation or standards, could amass a discrepancy of $360,000,000. To quote Everett Dirksen, "a million here, a million there ... next thing you know, we're talking about real money".

I don't understand how an auditor who has never seen nor has access to the patient information can dispute a diagnosis?

What would the patient impact have been if treatment was based on the auditors diagnostic interpretation?

Not sure I really agree. Your theory might make sense with a business that produces products. TVH, however, provides services and the capital outlay to expand a service business is much less than is needed to expand manufacturing capabilities. The listed assets certainly don't indicate those overpayments went to purchase tangible assets.

Pfizer sold $100 billion in vaccines yet its stock went from the low 30's to the low 20's. So, just like Pfizer's profits, I think this overpayment money went somewhere it should not have.

I don't understand how some people are saying it was an over billing issue and its OK because they self reported.

Overpayment is an interesting term.

What makes you think that TVH doesn't have outside auditors that they pay to consult on exactly these issues? (They do). The real question is: What happens when the auditors you pay say everything is OK but the auditors for a potential buyer says it's not? I suppose CMS gets the final word (they did), and the final word is "you owe us a lot of $$$"

Maybe, maybe not. I'm sure TVH will get to "entertain" an army of forensic accountants.

And I don't understand how anyone can post that this was criminal fraud without knowing the facts or understanding the process. That's OK, as I said, the villagers are out with torches and pitchforks. I would prefer holding off on the accusation of criminal fraud until and unless the DOJ charges them and a judge/jury convicts them. But that's only American due process and presumption of innocence. Mob mentality on social media is much better :1rotfl::1rotfl::1rotfl:

The word isn't "interesting", it's "accurate"

Hold on a minute here. That statement was written by a lawyer and reviewed by several other lawyers before being put out there as a statement. I’m sorry, but I don’t think we can make any assumptions from a statement written by someone whose sole responsibility is to protect the subject.

Bigger picture thought here. Forget about upcoding responsibilities, intent, blame, where did the $$ go, etc…. The bigger picture here is that before this event came to light, the Villages already arguably had both not enough and substandard health care relative to the size of the senior population. For an area dominated by a senior population, where availability of quality healthcare is extremely important, this could have serious consequences. Think about it, the largest health care provider serving the community is now operating out of bankruptcy, holding on by a thread using DIP financing to stay operational while a bankruptcy court decides its fate. Like everyone else, I’ve read the carefully crafted public statements coming from TVH and CenterWell (Humana) about how this is all going to turn out wonderful for TVH patients. Unfortunately, it’s very difficult to envision a scenario where reality and those statements intersect. Make no mistake, Humana is a publicly traded company taking a strategic risk in acquiring TVH with the intent of vertical integration. Their strategy is to be the dominant health care provider in the ever growing senior marketplace. On the positive side for Humana, vertical integration can provide them with cost savings and effeciencies, which would lead to higher profits. On the negative side for patients, vertical integration can crowd out competition, leaving Humana with a quasi monopoly. For the consumer, competition is a wonderful thing. Think about a scenario where Comcast was the only internet provider in your area, not ideal to say the least.

Bottom line, this introduces more risk to a marketplace that already is pushing the health care system to the brink. Add to that the fact that the place is growing at a breakneck pace with no end in sight. I think that’s the big picture people should be focusing on.

Traditional Medicare only pays 80% hence most of the 22% difference in payments for MA vs Traditional Medicare

Finally getting closer to the problem. Money goes from Medicare to Advantage Plan and then to TVH. And if you don't think the Advantage Plan isn't involved in the coding I seriously doubt it. Also involvement with Universities for research and new building may affect at what rate codes are paid. Interesting how UHC stock has tanked this year. Fraud. abuse, loopholes and mistakes can all be involved.

I agree. Nor can we assume it means something different than what it states either.