The Tennessee Attorney General said he's opened a fraud investigation into the Vanderbilt University Medical Center's transgender clinic and revealed a video from one of its doctors discussing billing practices sparked the entire investigation.
In an interview with News Channel 5 Nashville, AG Jonathan Skrmetti said the investigation was triggered by a video in which the founder of the clinic explained she manipulates billing codes to ensure that transgender patients are not billed the full amount for treatments their insurance does not cover.
In the 2019 video, Dr. Shayne Sebold Taylor talked about how she skirts what she calls 'documentation challenges' when insurance companies will not pay for transgender care.
'For the patient who gets a big bill because their insurance doesn’t cover any transgender-related codes, I usually write ‘endocrine disorder – not otherwise specified’ to allow me to order the labs that I want,' she said.
Skrmetti called that fraud.
Tennessee Attorney General Jonathan Skrmetti said it was a video from a doctor at Vanderbilt's transgender clinic that sparked an investigation into potentially fraudulently medical billing by its doctors
Dr. Shaye Sebold Taylor said in a video posted online in 2019 that she would sometimes code transgender medical treatment as endocrine therapy and other codes that differ from reality so that insurance companies would cover the treatments
'The government is allowed to set limits on what is going to be reimbursed, private companies are allowed to set limits on what's going to be reimbursed,' he said.
'And if a doctor, in the coding process, uses a code that is not the most accurate code for the explicit purpose of avoiding those limitations, they are trying to get money that they are not owed.'
When asked whether the investigation is specifically a 'transgender investigation,' Skrmetti said no, 'this is a fraud investigation.'
Skrmetti's office opened the investigation last year into VUMC's Clinic for Transgender Health, issuing several separate civil investigative demands that ordered the clinic to turn over its medical records.
Skrmetti obtained the medical records of 106 patients, all of whom are covered by state insurance plans.
The AG's actions came immediately after the state's conservative Governor Bill Lee called for an investigation into the clinic, making Skrmetti's actions appear politically motivated.
'I understand the optics. It was very easy, when people said there should be an investigation of Vanderbilt, to say we were going to enforce the state laws because we were already aware of the potential billing issues there at the time,' Skrmetti said.
'Would you have initiated this investigation if it had involved a heart doctor, a kidney doctor, a dermatologist?' asked News Channel 5.
'Absolutely,' said the AG. 'We do dozens of investigations a year for medical billing fraud.'
VUMC has declined to comment on the ongoing investigation and allegations against it.
'We take pride in providing superior clinical care to patients and exercise diligence to bill all claims appropriately. Given that this matter involves an ongoing investigation, we won’t be commenting further,' a spokesman said.
In a 2019 video, Taylor (pictured) said she avoided billing her patients for some transgender medical services that their insurance companies wouldn't cover by billing them as different procedures
The Vanderbilt University Medical Center in Nashville, Tennessee, houses a transgender clinic that is under investigation by the state's Attorney General's office for potentially fraudulent billing practices
Skrmetti said he could well understand why some patients are 'terrified' right now.
'They are being told this is for nefarious purposes. I get it, but there is no political exception to the fraud laws,' he said.
He explained his office needed medical files with actual patient names so they could match them to the medical bills and insurance records they believe may reflect criminal behavior on the part of the medical provider.
'It's not a question of trying to use these names for the purpose of going after individuals. The purpose is to link up the medical records to the billing records to determine whether anything inappropriate happened.'
He said the medical records cannot and will not be used for the purpose of prosecuting parents for child abuse for seeking transgender medical care for their children - a concern that the transgender community had upon hearing about the investigation.
'There's no possible way they could be used for that purpose,' he said.
VCMU officials have previously said that gender-affirming surgeries for minors at the center are rare, with roughly five per year. They are only done on patients at least 16 years old.
As required by Tennessee law, the records will remain confidential.
'It's not a question of trying to use these names for the purpose of going after individuals. The purpose is to link up the medical records to the billing records to determine whether anything inappropriate happened'
A new law passed in Tennessee by the Republican supermajority in the legislature this year made so-called gender-affirming care for minors illegal in the state.
As of May 2023, 20 states have enacted legislation, executive actions or other policies that restrict or ban healthcare for transgender youths, and more than 100 additional bills are under consideration.
All of the states are Republican or Republican-leaning, and all but one voted for former President Donald Trump in the 2020 election.
The Tennessee AG is currently defending the state's law in court, where he has argued that medical professionals over-diagnose the youth population with transgender issues and the treatments are hurting children.
'If the issue is way too many people are getting the treatments than need them and that some people are going to be harmed by that in the long run and that, on balance, it's hurting people in the state more than it's helping them, then it's within the police powers of the state legislature to make that determination,' he said.
Last year, VUMC contested several reports that employees were punished for objecting to its transgender treatment program.
Governor Lee said at the time that the university's 'pediatric transgender clinic' raised 'serious moral, ethical and legal concerns.'
At the time that VUMC informed its patients of the AG office's demand for medical records, Skrmetti's Chief of Staff, Brandon Smith, said he was 'surprised that VUMC has deliberately chosen to frighten its patients like this.'
'The Office does not publicize fraud investigations to preserve the integrity of the investigative process. The Office maintains patient records in the strictest confidence, as required by law.
'The investigation is focused solely on VUMC and certain related providers, not patients, as VUMC is well aware,' he said.
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