Undercover: How I Went from Company Man to FBI Spy--And Exposed the Worst Healthcare Fraud in U.S. History

By John W. Schilling | Go to book overview

CHAPTER TWENTY-SEVEN
Millions of Dollars or
a Lump of Coal

Checkmate. On December 18, 2002—just weeks before the deposition of HCA CEO Jack Bovender and former HCA Chairman Thomas Frist, Jr.— the company announced a tentative record-breaking Medicare fraud settlement. The agreement still required approval from U.S. District Judge Royce Lamberth and senior Justice Department officials.

HCA would pay a staggering $898.5 million to end the largest, lengthiest Medicare fraud investigation in U.S. history. The company agreed to pay $631 million to resolve all civil claims, including kickback and cost reporting issues. A separate $250 million payment was included in HCA's earlier agreement with the CMS on outstanding cost reports, and the company would pay $17.5 million to resolve Medicaid-related fraud allegations. The combined Columbia/HCA settlements recovered more than $1.7 billion for the government healthcare coffers and resulted in fourteen corporate criminal guilty pleas.

In true government fashion, federal authorities left Jim Alderson and me in the dark about the settlement amount attributable to our lawsuits. We hoped the Justice Department would remember Judge Steven Merryday's ruling in the Quorum case when it offered us our relator's share. Based on our Quorum and KPMG experiences, we expected a battle with the Justice Department. “We have standing in court to object to the settlement. We will object unless our share of the settlement is adequate and fair,” Stephen Meagher assured Alderson and me.

In a press release from his office, Senator Charles Grassley cautioned,

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