Three Columbia/HCA executives were charged with defrauding medicare programs for more than a decade, underscoring the government's growing investigation into health care fraud. After this background report, Margaret Warner will lead a discussion on Columbia/HCA's defrauding of medicare.
MARGARET WARNER: Three executives of Columbia/HCA Healthcare Corp. have been indicted by a federal grand jury in Florida on charges of defrauding the government for over a decade. The indictments revealed in court papers unsealed yesterday is just the latest blow for the nation's largest private for-prof it healthcare company. The three men are top officers in Columbia/HCA's Florida operations. They're charged with conspiring to overbill Medicare and Medicaid, the federal healthcare programs for the elderly and the poor, by more than $1.7 million.
Columbia/HCA owns and operates nearly 350 hospitals, as well as 150 outpatient
surgery centers and more than 570 home health care centers. It operates in 36 states, as well as England, Switzerland, and Spain. The company generates annual revenues of more than $20 billion. Just nine years ago, Columbia was a small operation consisting of two hospitals in El Paso, Texas. It began aggressively acquiring public and private healthcare facilities across the country. And in 1994, Columbia merged with its biggest rival, Hospital Corporation of America, better known as HCA. Soon afterwards, the company went public on the New York Stock Exchange.
This rapid expansion has not been without controversy. Some public health advocates have accused the company of sacrificing quality healthcare in its drive for expansion and profits. The company's troubles were compounded this past March, when the FBI raided a Columbia/HCA hospital in El Paso. The raid was part of a federal probe by the Justice Department and the Department of Health & Human Services into suspicions that Columbia had overbilled the Medicare and Medicaid programs. The government's investigation of the company has widened in the months since then.
JUNE GIBBS BROWN, HHS Inspector General: There were fifty-one search warrants that were issued, and they were issued in seven different states. In addition to that, I had fourteen subpoenas out for specific information, and two of those were at headquarters in Tennessee. It's a very large organization, with many, many hospitals, home health agencies, and other types of health care providers. And there are various financial arrangements between the various components, and also possibly with others that they deal with. So we're looking at those financial arrangements to see if they all meet the Medicare guidelines.
MARGARET WARNER: Earlier this month, the company's co-founder and CEO, Richard Scott, spoke about the investigation on CNN's Moneyline.
RICHARD SCOTT, Chairman & CEO, Columbia/HCA Healthcare: It is not a fun day, but, as you know, government investigations are a matter of fact today in health care. I believe the American Hospital Association came out last week and said that they believe 4700 hospitals in America are under or will be under investigation. So, we'll deal with any issues that come up in this investigation and address any concerns anyone has.
MARGARET
WARNER: But last Friday, Scott and his top lieutenant, company president David
Vandewater, resigned. The resignations were announced at the company's Nashville
headquarters by Dr. Thomas Frist, Columbia HCA's vice chairman, whom the board
had tapped to be the new CEO. He and his father originally founded HCA.
DR. DAVID FRIST, CEO, Columbia/HCA: I think that Mr. Rick Scott and Mr. David
Vandewater, working with many of us, came to the conclusion that it was in
the best interest to revert back to the shareholders in the pension fund,
but more importantly to two hundred and eighty-five or so thousand employees,
consumers, people in these communities we're taking care of.
A RealAudio version of this NewsHour segment is available.
