Indictments at Columbia Medicare Fraud Probe

Article excerpt

Three Columbia/HCA Healthcare Corp. executives, including one

from Jacksonville, were indicted by a federal grand jury on

charges of defrauding Medicare out of $1.8 million.

Among those indicted was Michael T. Neeb, 35, who oversees the

finances of the chain's 14-hospital NorthFlorida division.

The charges are the first to be made in a massive federal

investigation partly into how Columbia hospitals have been

reimbursed by federal programs such as Medicare, the health

insurance program for the elderly. Earlier this month, federal

agents raided 35 Columbia facilities armed with search warrants

for records.

The 14-page indictment also charged Jay A. Jarrell, 42, the

division chief executive for Columbia's Southwest Florida

division in Fort Myers, and Robert W. Whiteside, 47, now an

executive at Columbia's headhquarters in Nashville, Tenn.

Neeb, Jarrell and Whiteside conspired and defrauded Medicare

and the U.S. military's health insurance program at Fawcett

Memorial Hospital in Charlotte County, according to the

indictment.

All three men worked together at Columbia's Southwest Florida

division in Fort Myers in the early 1990s. Neeb had been Fawcett

Memorial's chief financial officer.

A grand jury sitting in Fort Myers indicted the executives on

five separate counts on June 25. The charges remained sealed

until Charles R. Wilson, the U.S. attorney for the Middle

District of Florida, disclosed them yesterday.

"This indictment . . . represents the first phase of the

government's investigation of that organization," Wilson said in

a statement.

Wilson's office declined to comment on why the government

waited more than a month to unveil its charges.

The indictment charges three men falsely billed Medicare and

CHAMPUS, the Civilian Health and Medical Program of the

Uniformed Services for capital costs to which Columbia's Fawcett

Memorial Hospital was not entitled.

Both Medicare, the government health insurance program for

senior citizens, and the military program pay hospitals based on

a complicated system that distinguishes between expenses for

administration and those for capital costs, such as money

borrowed to erect a new hospital wing.

The initial problem dates back to 1988 when an unnamed

co-conspirator filed an erroneous bill with Medicare, according

to the indictment.

Fawcett Hospital was owned by Basic American Medical Inc., but

was purchased by Columbia in 1992.

Later, Neeb, Jarrell and Whiteside learned of the erroneous

billing, but year after year repeatedly charged the federal

government for what they certified were capital expenses,

according to the indictment.

Only 39 percent of these expenses qualified for reimbursement

under government rules, the indictment states.

"I can assure you that we take these allegations very seriously

and will cooperate fully with the government," said Thomas F.

Frist Jr., Columbia's chief executive in a statement, released

by the giant hospital chain's headquarters in Nashville.

Frist took the reins of power after last week's resignation of

company founder Richard Scott. He has promised to deal with any

wrongdoing and to reform Columbia's aggressive business culture.

All three of the indicted appeared before a federal magistrate

for a bond hearing in their hometowns yesterday, said an

official in the U. …