Starkman: Corewell to Offshore Critical Billing Functions, Putting Patient Privacy at Greater Risk

December 09, 2023, 6:10 PM

The writer is a Los Angeles freelancer and former Detroit News business reporter. This column first appeared on his blog,

By Eric Starkman

Mmm. For Michigan, By Michigan. ™ Might that ring a bell?


That was the slogan Grand Rapids-based Spectrum Health touted when it took over the troubled Southfield-based Beaumont Health hospital system nearly two years ago and seemingly promised a healthcare outfit run by indigenous Michiganders. Spectrum thought the slogan was so brilliant that it trademarked it.

“As we launch our new health system, we have a bold goal to transform health and are thrilled to unite our two great organizations,” Spectrum CEO Tina Freese Decker crowed in a news release. “Together, we will leverage our complementary strengths to innovate and make a positive impact for our communities and their health. We look forward to working with our physicians, team members, patients, health plan members and partners ACROSS OUR STATE (emphasis mine) to provide health care and coverage that is accessible, affordable, equitable and exceptional.”

As readers of this column well know, Freese Decker is a veritable spewer of manure that could fertilize Michigan farmlands for decades to come.

In announcing the takeover, Freese Decker promised the combined Spectrum and Beaumont operations, since rebranded as Corewell Health, would have dual headquarters in Grand Rapids and Southfield. That’s only been true for the past 100 days or so because Darryl Elmouchi, Corewell’s COO and No. 2 executive, has been on temporary assignment in southeastern Michigan overseeing the former Beaumont operations because Dr. Bernard Schwartz, the hotshot doc Freese Decker hired with great fanfare, lasted only 13 months.

Tina Freese Decker

Where was Schwartz recruited from to run the Pure Michigan organization’s Metro Detroit hospitals?

New York’s Long Island.

Then, of course, there was Freese Decker invoking the influence of Martin Luther King Jr. in an employee communique announcing she was firing 400 workers. King was a champion of the working class and an avid supporter of unions, particularly the Teamsters, a union Corewell refused to recognize and whose organizing attempts Corewell is fighting.

When Freese Decker announced her Beaumont takeover, she said there wouldn’t be any layoffs resulting from the combination.

As for Freese Decker’s promise of “exceptional” health care, I’m told by medical staff at Corewell’s Metro Detroit hospitals the quality of care has declined since the takeover.


The latest example of Freese Decker’s disingenuousness is Corewell’s decision to outsource its patient billing and collection functions to Costa Rica, India, and the Philippines. Naturally, there’s been no announcement, as Corewell prefers to focus on the positive, such as Freese Decker being recognized as Modern Healthcare’s 100 Most Influential People for the second time.

Corewell’s offshoring plans were recently disclosed to employees at a town hall meeting. Under the proposed plans, customer facing functions such as registration and pre-authorization will be handled out of Costa Rica, billing will be handled out of Costa Rica and the Philippines, and transcription and coding will be handled out of India.

According to one source, Corewell’s billing and collection functions, which in healthcare industry jargon are known as “revenue cycle management,” employs some 200 people, although the function is understood to have once employed almost double the staff. Under former CEO John Fox, revenue cycle management was a critical function overseen by Denise Waters, who insiders repeatedly told me worked very closely with former CFO John Kerndl. Insiders blamed the two executives for implementing the aggressive cost-cutting that contributed to Beaumont’s decline.

Darryl Elmouchi

Elmouchi ignored a request for comment, as did Rob Zeiger, Corewell’s vice president of communications and community relations, and Mark Geary, Corewell’s spokesman. In their dealings with me, the three executives function as Buddhist monks who have taken vows of silence.

Outsourcing revenue cycle functions is increasingly common in the healthcare industry.

A study released earlier this year revealed that more than 60% of healthcare providers were looking to outsource some or all of their payment and collection systems. Among the reasons cited was a difficulty recruiting and retaining employees to support the function, which often can be unpleasant because it involves having to interact with angry patients who are livid about the hospital charges they’ve been billed or are told their insurance won’t cover the costs of their medical procedures.

Firms specializing in revenue cycle outsourcing claim they can streamline and simplify billing and coding processes, reduce errors and denials, and ensure timely reimbursements, resulting in improved cash flow. What these firms gloss over is that outsourcing invariably results in increased risk to data breaches and patient information being compromised.

Corewell patients, particularly those treated at the former Beaumont hospitals, are fast getting an education about the dangers.

A national data security breach at a company hired by Corewell compromised the health information of roughly one million patients in southeast Michigan, in addition to 2,500 members of Priority Health, the Corewell-owned health insurance provider. The compromised information included names, dates of birth, email addresses, phone numbers, medical diagnoses, health insurance information and Social Security numbers.

As reported by the Detroit News, the security breach happened in May with the hack of Welltok, a company hired by Corewell to provide patient communication services in southeast Michigan and operate a health lifestyle portal for Priority Health. Underscoring the sorry state of IT security in the healthcare industry, Welltok didn’t even know it was hacked for several months until it was alerted to the breach by a software vendor in July. It took the company another month to confirm the breach.

Corewell waited until November 17 to post a statement on its website warning about the Welltok breach, but local Detroit area media didn’t report on the incident for two weeks, which is when Michigan’s clueless Attorney General Dana Nessel warned about the breach.

 “My office remains committed to helping Michigan residents keep their data private and secure,” Nessel said in a news release, without outlining any measures to address the pervasive hacking of Michigan’s hospital IT systems.

Metro Detroit Corewell patients undergoing medical procedures requiring anesthesia at Corewell hospitals had their personal information compromised this year.

With the exception of its Farmington Hills hospital, Corewell outsources its anesthesiology functions to Texas-based NorthStar Anesthesia, which in turn outsources its billing function to Florida-based Arietis Health. Arietis’ IT system was breached in May, but the company didn’t discover the compromise until July and waited until October to notify individuals about the breach.

Multiple Hacks Under Fox

I can find no statement about the NorthStar data breach on Corewell’s website.

Notably, Beaumont was hacked multiple times under the leadership of John Fox. A cybersecurity expert told me that Beaumont’s IT system was so porous there could have been even more instances of it being hacked without the hospital system even knowing it. A Spectrum hospital was also a victim to a data breach affecting 60,000 patients, as was the health system’s foundation

Despite the dismal patient data security record, Mark Geary, the Corewell spokesman, had the audacity to issue this statement to the Detroit News: "The privacy of our patients, health plan members and team members is a top concern." 

If patient privacy was indeed a top concern, Corewell wouldn’t be outsourcing its billing and collection functions. Under former CEO Fox, Geary distinguished himself as a manure generator extraordinaire. Little wonder he continues to flourish under the leadership of Freese Decker.

Reach the writer at The author welcomes hearing from Corewell employees and patients. Confidentiality and anonymity are assured.

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