Hospital Investigations Likely

Article excerpt

Hospital sales and billing practices may be a major target next year for federal investigators whose resources for uncovering health-care fraud have been expanded.

Spending to investigate health-care and Medicare fraud will almost double, and the powers of the Health and Human Services Inspector General will increase as a result of health-care legislation enacted in August, said Prudential Securities health-care analyst Barbara Dreyfuss.

"Investors should prepare for a significant increase in the number of companies targeted for fraud investigations by the Inspector General's office and the FBI," she said. Hospitals top the list in a 1997 work plan released by the Inspector General's office. The plan says federal investigators may explore hospital sales to find out whether the Medicare health insurance program for the elderly is being cheated out of its share of profits. The investigation of hospital sales comes as the industry is undergoing a massive consolidation, with big publicly traded companies such as Columbia/HCA Healthcare Corp. and Tenet Healthcare Corp. expanding. …