Newspaper article The Florida Times Union

HCA Executives Cleared of Fraud Federal Appeals Court Overturns the Verdicts

Newspaper article The Florida Times Union

HCA Executives Cleared of Fraud Federal Appeals Court Overturns the Verdicts

Article excerpt

Byline: Sarah Skidmore and Rich Tucker , Times-Union staff writers

A federal appeals court in Atlanta on Friday overturned the convictions of two former executives of HCA accused of defrauding government health plans.

Jay A. Jarrel and Robert W. Whiteside were the only two executives convicted in the large-scale controversy surrounding Nashville, Tenn.-based HCA, formerly known as Columbia/HCA Healthcare Corp.

HCA is the biggest hospital chain in the United States. It owns 184 hospitals nationwide, including Memorial Hospital Jacksonville and Orange Park Medical Center. It also operates a billing center in Orange Park.

Jarrel and Whiteside were convicted in July 1999 for making false statements in cost reimbursement reports and conspiring to defraud the government through those statements. The executives were accused of billing some expenses at Fawcett Memorial Hospital in Port Charlotte as capital-related costs when the expenses should have been listed as administrative and general costs. This resulted in an additional $3 million from the government to the hospital's benefit, according to prosecutors.

The 11th U.S. Circuit Court of Appeals determined that the government failed to prove the statements were knowingly false and also noted that reasonable people could differ in opinion as to how the expenses could be billed.

Attorneys for Jarrel and Whiteside said the appellate court's decision showed the federal cost-reporting regulations were unclear and prone to conflicting interpretations.

"Criminal law has this concept that one knows what's legal and what's not legal. It's like a sidewalk or a corridor that is well marked," said Charlie Lembcke, Whiteside's lawyer. "This was a case where the corridor was not marked, where you had ambiguous regulations and no criminal intent."

The U. …

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