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
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
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
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. …