Fed Investigation Now Official

By Paul Heldman Bloomberg News | THE JOURNAL RECORD, August 14, 1997 | Go to article overview

Fed Investigation Now Official


Paul Heldman Bloomberg News, THE JOURNAL RECORD


WASHINGTON -- Federal prosecutors on Wednesday formally named Columbia/HCA Healthcare as a target in a criminal investigation into whether the nation's largest hospital chain overbilled government health insurance programs.

The announcement is the first official acknowledgment that the company itself, in addition to individual employees, could face an indictment on criminal charges after government searches of 19 Columbia hospitals, including one in Tulsa, and 32 other facilities.

A felony conviction of Columbia/HCA on charges that it defrauded Medicare could threaten the company, or subsidiary hospitals, with removal from the program, which Columbia/HCA relies on for $7 billion, or 35 percent, of its annual revenues. "They could be suspended or barred from Medicare. That's pretty significant for a company like Columbia," said Larry Gaydos, a criminal lawyer in Fort Worth, who is representing an individual associated with the Columbia/HCA investigation. A criminal conviction or plea to a felony by a company in connection with Medicare fraud automatically excludes it from the program for a minimum of five years, said Harvey Yampolsky, former counsel to the Inspector General of the U.S. Department of Health and Human Services and now a health-care lawyer in Washington. "There is no discretion here," he said. What can happen is that a subsidiary of a company, possibly an individual hospital or a billing service, can either plead or be found guilty of a felony, narrowing exclusion from Medicare to one part of the company. "It is certainly possible that some entity other than the big parent (company) is the one that pleads guilty," Yampolsky said. Or a company can negotiate a corporate integrity or compliance agreement to provide some assurance against future fraud and persuade prosecutors not to pursue criminal charges. "Companies try to negotiate a corporate integrity agreement with the government as a way of avoiding indictment and conviction and triggering a possible mandatory exclusion" from Medicare, said John Markey, a Boston-based lawyer specializing in health-care fraud and abuse issues. So far, Columbia/HCA itself has not been charged with any offenses. Lawyers cautioned that being named as a target in an investigation does not mean that the government can make its case for criminal charges. "Not everyone who is named as a target ends up getting indicted," Yampolsky said. To date, only three mid-level Columbia/HCA executives have been indicted on charges that they over-billed Medicare, the government health insurance program for the elderly. Columbia shares fell 15/16 to close at 32: on trading of 8.8 million shares, compared to average three-month daily trading volume of 3.7 million shares. A spokesman for the U.S. Attorney's office in Tampa, confirmed Wednesday that prosecutor Kathleen Haley had declared Columbia/HCA a target of the investigation during a July 30 court hearing. …

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