How to get your hospital shut down: the bizarre, slow downfall of the most expensive hospital in Texas

A hospital known for surprising people with extreme bills continued to accept patients after money for staff and equipment ran out

Somehow, the semi-empty building in a suburb of Dallas called Texas General Hospital was still considered a legitimate hospital, offering something like treatment to the patients who dared enter its doors.

Over the past year, hospital personnel had become fearful of using the expired IV tubing and ventilators. The ABG machine, used to check lung function, also stopped working. The sinks in the cafeteria no longer delivered hot water.

Much of the nursing staff stopped showing up to work because they hadn’t been paid. So did the radiology and respiratory teams, after their checks bounced. For a brief period in May, there was no physician overseeing emergency care in the ER.

The ER patients treated at the hospital over the course of 2018 -- a total of 4,083 people -- were directed by the hospital, in state-mandated patient rights’ notices, to report complaints to an incorrect telephone number. It's unclear if that was by design.

One such patient, referred to only as Patient #24, showed up early on June 6, 2018. A nurse working in the ER paged five on-call nurses, as the hospital no longer could afford to keep them in the building full-time. All but one of the nurses refused to come to work.

The fate of Patient #24 and other details about his or her case remain a mystery; the incident is only public record because inspectors with the Center for Medicaid Services (CMS) happened to show up that same day for an unannounced inspection. They made a note of Patient #24’s predicament and the other troubling conditions at the hospital. (CMS has provided a copy of the inspection report to ConsumerAffairs, from which the above account is based).

“It has been getting harder to get nurses to come in when they are on-call and called in to take care of a patient that is admitted,” a hospital staffer explained to the CMS investigators that day.

Still, the hospital kept its doors open. Two months later, another patient was brought to the hospital. This particular person was suffering a hemorrhagic stroke. Texas General Hospital has never been outfitted with a traditional stroke unit or a dedicated maternity ward, which isn’t a requirement under state or federal laws. But in order to get the patient transferred elsewhere, the nurse on duty needed a read on the patient’s CT scan. No one was there to read the scan that day in early August.

“The hospital breaks all kinds of laws,” the nurse who had treated the stroke patient said, in an interview with CMS investigators who returned to the facility in August.

“I have had a hospital decline a transfer because I did not have a read on an X-Ray,” the nurse added. The fate of that patient was also not detailed in the CMS reports.

Astronomical bills

For six years, Texas General Hospital has been a bizarre fixture in north Texas, a facility known as the most expensive hospital in the state despite numerous patient reports of minimal care.

It had only opened several years prior, when, in 2015, patients reported receiving astronomical hospital bills in the mail. Some ranged between a quarter-million and half-million dollars. The patients said that they received no warning beforehand that the hospital was out-of-network, for-profit, and rejected by nearly all insurance plans other than Medicare and Medicaid.

Staffing issues and safety issues have also plagued the hospital, though those issues received less attention than the billing did. An earlier inspection by the state found that Texas General Hospital had no policy for investigating patient deaths. The hospital also failed to investigate five surgeries “that potentially injured the patients,” including one gastric sleeve operation resulting in a person dying. Elective surgeries such as gastric operations have been advertised as among the hospital’s few specialties.

Overall, state investigators in 2015 determined that Texas General Hospital “failed to ensure the quality of the medical care provided to patients.” But it would be another three years until the hospital lost its Medicare and Medicaid funding.

Patients at the mercy of hospital prices

It may come as a surprise that losing the government contracts took that long. Then again, the workings of the American hospital industry have never exactly made sense to outsiders.

A state lawmaker and others who have vowed to do something about Texas General Hospital’s “fraudulent and abusive billing practices,” as one health insurer described them, reached the same impasse that has afflicted American consumers for years; the hospital industry enjoys broad freedom to charge patients whatever price they deem fit, regardless of the quality of their care.

While Medicare and Medicaid care is regulated by strict price controls, patients on private insurance or who are uninsured are often at a hospital’s mercy when it comes to billing.

"The most vulnerable, or the people without power, they have to pay whatever the hospital asks,” Dr. Ge Bai, an accountant and economics professor at Johns Hopkins University, tells ConsumerAffairs.

Bai, an immigrant from China, had never seen an American hospital bill before. Then she moved to the States, and in 2009, gave birth. The bill that she received afterward was completely dumbfounding.

“Then I asked myself, if I am a certified public accountant, and I cannot figure out a hospital bill...”

Bai has since become an expert in United States healthcare costs. In one study, she partnered with researchers at the Johns Hopkins Bloomberg School of Public Health to calculate hospital bills and found that the average American hospital charges consumers 3.4 times its Medicare-allowable costs.

“Hospital bills are very high for people that do not have negotiating power,” Bai says, adding that there are virtually no regulations in most states to help those patients.

Some hospitals have taken that regulatory freedom to new extremes. The paper authored by Bai and colleagues found that the fifty most expensive hospitals in the United States charge an average of ten times the Medicare-allowable cost of services, or markups of more than 1,000 percent.

Based on data from 2012, Texas General Hospital charged 10.8 times the Medicare-allowable and ranks #11 on Bai’s list.The listing gave Texas General Hospital the distinct honor of being the worst price-gouger in the state, despite only having been open at the time for one year.

Since then, prices have climbed even higher. In 2015, the most recent year for which Bai’s data is available, Texas General Hospital’s billing ratio reached 15.4 times Medicare-allowed costs. As her paper notes, extreme billing affects all consumers because it drives up the price of premiums and other associated costs.

A rural hospital crisis allows for-profit institutions to flourish

As a recent report in Politico details, the company behind Texas General Hospital has been able to thrive across Texas thanks in large part to a rural hospital crisis in the state. Eighteen hospitals in rural parts of Texas, serving people who are largely uninsured, have shut their doors since 2013.

The tiny town of Bowie, population 5,000, lost its publicly-owned hospital in 2015 after residents rejected a tax increase following a drop in oil and gas production. The next nearest hospital was nearly 30 miles away until the Hashmi Group, a company run by heart surgeon Dr. Hasan Hashmi and his sons, stepped in the following year.

“I know they use a different billing model,” Bowie Fire Chief Doug Page tells ConsumerAffairs, referring to the private, out-of-network model

Dr. Hasan Hashmi with nurse Charlyn Wagley. Photo credit: Amy Martyn

Still, the facility in Bowie is the first line of defense when people in town are having an emergency. Many of the employees at the original Bowie hospital were able to keep their jobs and continue working at the facility under the Hashmi Group, Page says.

A similar story played out in the rural Texas town of Grand Saline, after the Hashmi Group purchased a hospital that otherwise would have shuttered.

But making the case for the Hashmi Group’s purchase of Texas General Hospital, the troubled facility near Dallas, is more difficult. The original hospital in its place had been abandonced since 2002 and sits in the town of Grand Prairie, a suburb situated between Fort Worth and Dallas. The metro area has plenty of hospitals, though Hashmi and his sons pitched the new hospital as a much-needed service when they re-opened the facility in 2012.  

Patients like Autumn McCool Heisler say that they were given no advance warning that Texas General Hospital was private under the new owners. Heisler drove there in 2016 after breaking her knee cap; it seemed easier to go to a hospital only a few miles away than deal with long waits at the larger facilities in the metro area.

Heisler remembers being the only patient in the emergency room that day, something that she says should have given her pause. A doctor in the ER told her that her knee wasn’t broken and initially refused to give her an X-Ray, she says. She remembers arguing with him to force him to change his mind.  

After finally getting the X-Ray, a knee immobilizer, and a pain shot, Heisler went home. Then she received a bill in the mail for $17,000, she tells ConsumerAffairs. She called the hospital to ask if it was a typo. It wasn’t.

“I broke out in hysterical laughter and am like, ‘I’m not paying this bill,’” Heisler says. The hospital sent her the bill a few more times. Eventually, the notices stopped coming. It all seemed like a half-hearted attempt to collect her debt. In previous interviews, the Hashmi group has claimed that they do not aggressively pursue the bills of patients who refuse to pay.

"I’ve never seen anything like it,” Heisler adds. “Why not just charge reasonable rates and actually put more efforts into collecting their bills?”

The Hashmi group could not be reached by ConsumerAffairs to answer that question; attempts to reach the company through a former executive, an attorney who is registered as the hospital's agent in the state, and a phone number listed as belonging to the company were unsuccessful.

Photo credit: Amy Martyn

Funding cut and facility closed

I initially met and interviewed Dr. Hasan Hashmi and two other hospital executives in 2016 for a story about a patient who was charged $330,000 for foot surgery. During a tour that the hospital gave me at the time, I also noticed that the hospital seemed to be missing some key staffers on an afternoon weekday. No patients were there, either.

Hashmi, comparing his facility to a Walmart that often gets robbed, told me at the time that the bills grew so high because most patients and insurance providers refused to pay them, so the hospital's business model relied on  recovering costs from the rare bills that did get paid.

It's a model that apparently shouldn’t be tried again. On October 3, after the series of disastrous state inspections that occurred in May, June, and August, CMS sent Texas General Hospital a letter stating that its Medicare and Medicaid funding would be terminated at the Grand Prairie facility by the end of the month. After six years of government contracts, Texas General Hospital’s support from Medicare and Medicaid is finally coming to an end.

“The cause for Medicare/Medicaid termination is Texas General Hospital's failure to meet the minimum health and safety standards required for Medicare program participation,” a letter that CMS sent to the hospital explains.

A recorded voicemail at the Texas General Hospital phone number now says that the facility is closed.

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