In a past life, I worked in health insurance fraud detection.
Everybody should know, the health insurance system in the US is fundamentally broken and has been almost since its inception in the early 20th century. The lack of adequate consumer protection, transparency, health systems and appropriate government regulation, in addition to organizational oversight, has lead to a situation where we have poor systems that can easily be exploited. And they are exploited.
What the third party care outsourcing/billing company mentioned in the article (Emcare) was doing sounds like upcoding. They bill the highest cost service they legitimately can to maximize profit. In this case, as a third party billing organization, they both want to maximize the profit for their customer (the hospital system), but also for themselves, as they surely take a cut as a middle man.
Likely, they were operating within the gray area where illegal upcoding has to be proven in a court of law. It is an expensive process, that requires review and comparison of huge amounts of medical records with claims to determine whether the more expensive procedure billed was medically necessary/appropriate, or if it was egregious. That legal process does pan out sometimes in the end, but it can take years and just adds even more overhead.
Coding correctly, fairly and getting reimbursed correctly and fairly is incredibly complex. There are an enormous number of combinations of services (usually represented by codes called HCPCs and CPT codes) and diagnoses (ICD-10... which has 100,000s of codes), as well as all different regulations and scenarios for settings of care (inpatient, outpatient, doctor's office, etc.).
Props go to the hospital system for taking back their coding after they realized what the third party was doing, but the reality is, it was probably financially benefiting the hospital system too.
Every technology that I know of has been tried to address these issues, such as data mining, machine learning, rule-based expert systems, etc. and none of them has addressed the root cause, which is the basic system is fundamentally flawed.
All the politics you see about US healthcare in the news are, in a way, representative of the root problem - how big and complex the systems are now, how much money they represent, and how many interests are involved. We have a tangled web.
I don't know the solution (and many have been proposed).