Dissecting 'Fristy'
...and other sick birds
Sightings from The Catbird Seat
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September 11, 2008
THE UNITED STATES DEPARTMENT OF JUSTICE
FOR IMMEDIATE RELEASE
Two Miami Physicians Plead Guilty and Admit Ordering $6.8 Million Worth of Unnecessary HIV Infusion Treatments
WASHINGTON – Miami physicians, Carlos Contreras, M.D., and Ramon Pichardo, M.D., each pleaded guilty today to defrauding the Medicare program in connection with a $6.8 million HIV infusion fraud scheme, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced.
Contreras, 60, pleaded guilty to conspiracy to commit healthcare fraud before U.S. District Judge Federico Moreno in Miami. In his plea, Contreras admitted that he owned a Miami clinic named CNC Medical Inc. (CNC), which purported to specialize in the treatment of HIV positive patients.
Beginning in November 2002 and continuing through April 2004, Contreras admitted that he conspired with others to submit approximately $6.8 million in fraudulent Medicare bills; that he signed documents containing false information about treatments purportedly given to HIV positive patients; and that he approved medically unnecessary treatments at CNC.
Contreras also admitted that the clinic received approximately $4.2 million from the Medicare program as a result of his and his co-conspirators’ conduct.
Furthermore, Contreras admitted that he entered into an agreement in approximately November 2002 with Carlos Benitez, Luis Benitez, Thomas McKenzie, Pichardo and others to operate CNC as a fraudulent HIV infusion clinic. Contreras admitted that the Benitez brothers would refer HIV positive Medicare beneficiaries to the clinic, provide staff members to work at the clinic and transport patients to CNC, in exchange for a substantial share of CNC’s profits.
Contreras was aware that the patients referred to CNC by the Benitezes were paid cash kickbacks in exchange for visiting the clinic and allowing their names to be used to bill the Medicare program. Contreras admitted that he agreed to approve expensive and medically unnecessary HIV infusion claims at the clinic, and to falsify medical records.
Pichardo, 58, also pleaded guilty before U.S. District Judge Federico Moreno to one count of conspiracy to commit health care fraud. Pichardo admitted in his plea that he worked as a physician at CNC, and conspired with Carlos and Luis Benitez, McKenzie, Contreras and others to assist in operating CNC as a fraudulent HIV infusion clinic. Pichardo further admitted that he and Contreras ordered numerous unnecessary and expensive HIV infusion treatments for the purpose of defrauding Medicare rather than providing legitimate health care services.
In a related case, Carlos and Luis Benitez, their brother Jose Benitez and McKenzie were indicted on June 11, 2008, for their role in a $110 million HIV infusion and money laundering scheme. The indictment alleges that Carlos, Luis and Jose Benitez were the masterminds of a massive HIV infusion fraud operation throughout South Florida involving at least 11 clinics and that they laundered the proceeds of their crimes. According to the indictment, Carlos and Luis Benitez were the true owners of CNC. All three Benitez brothers remain fugitives, while McKenzie is currently being detained pending an Oct. 14, 2008, trial.
The case was prosecuted by Trial Attorneys Hank Bond Walther and John K. Neal of the Criminal Division’s Fraud Section, and Constantine Lizas of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The case was investigated by the Department of Health and Human Services, Office of the Inspector General, and the FBI.
The case was brought as part of the Medicare Fraud Strike Force, supervised by Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section and U.S. Attorney Acosta of the Southern District of Florida. Federal prosecutors have indicted 82 cases with 142 defendants in South Florida since investigations opened during the period of strike force operations between March and October 2007.
Collectively, these defendants fraudulently billed the Medicare program for more than $492 million.
http://www.usdoj.gov/opa/pr/2008/September/08-crm-809.html
September 10, 2007
Audit Cites Overpaid
Medicare Insurers
By ROBERT PEAR, New York Times
WASHINGTON — Private insurance companies participating in Medicare have been allowed to keep tens of millions of dollars that should have gone to consumers, and the Bush administration did not properly audit the companies or try to recover money paid in error, Congressional investigators say in a new report.
The investigators, from the Government Accountability Office, said the money could have been used to reduce premiums or provide additional benefits to older Americans.
Under federal law, Medicare officials are supposed to audit the financial records of at least one-third of the insurance companies each year. But the investigators said the Bush administration had fallen far short of that goal and had never met the “statutory requirement.”
Indeed, they said, the proportion of companies audited by Medicare declined steadily — to 14 percent in 2006 from 24 percent in 2001 — despite a steady growth in Medicare payments to the plans. Those payments now total $75 billion a year, about one-fifth of all Medicare spending.
The Bush administration did not take issue with the findings.
“We welcome constructive suggestions for improving the audit process,” said Tim Hill, chief financial officer at the Centers for Medicare and Medicaid Services. An agency spokesman said it might need additional legislative authority to clarify its power to recoup money from insurers.
Administration officials have strongly encouraged insurance companies to participate in Medicare and have urged beneficiaries to enroll in private plans. Some plans, known as Medicare Advantage plans, cover a wide range of services, including doctor’s visits and hospital care. Others provide only prescription drug benefits.
The purpose of the audits is to determine whether insurers correctly calculated their costs and premiums and delivered the services promised to Medicare beneficiaries. Insurers typically receive fixed monthly payments, set in advance, for serving Medicare patients. Drug plans can receive extra payments if their costs exceed their expectations.
Likewise, if private plans hold down costs, they are supposed to share some of the savings with beneficiaries and the government.
In 2003, Medicare audited 49 of the 220 organizations participating in the program. Auditors found significant errors at 41 companies, but Medicare officials took no action on the findings. As a result of the errors, the auditors said, insurers kept “$59 million that beneficiaries could have received in additional benefits, lower co-payments or lower premiums.” The report did not identify the companies.
Paul Caban, assistant director of the financial management team at the Government Accountability Office, said the Medicare agency’s response was puzzling. “What is the value of conducting these audits if you do not act on the findings?” Mr. Caban asked.
Two influential members of Congress expressed dismay.
“Congress required audits for good reason,” said Senator Charles E. Grassley of Iowa, the senior Republican on the Finance Committee. “There’s a lot of taxpayer money being spent, and we need to know where it goes. We also need consequences for spending that isn’t proven to serve beneficiaries.”
Mr. Grassley said Medicare officials had done “a poor job of bringing accountability here,” and he added, “I want to see concrete action to fix this.”
Representative Pete Stark, the California Democrat who is chairman of the Ways and Means Subcommittee on Health, said the Medicare agency “is not doing its job to protect beneficiaries.”
In separate action, the Bush administration is vigorously pursuing money that it says is owed to insurance companies by Medicare beneficiaries. The Medicare agency has sent letters to more than 135,000 people saying they still owe premiums for prescription drug coverage provided in 2006. In most cases, the premiums were supposed to have been withheld from monthly Social Security checks, but the government withheld the wrong amounts or nothing at all.
Kerry Weems, acting administrator of the Centers for Medicare and Medicaid Services, said, “I am intently focused on this matter and will make it a priority to correct the errors and minimize them in the future.”
Insurers submit bids to Medicare each year, saying how much they expect to be paid to provide specified benefits. If the government accepts these proposals, it signs contracts with the insurers.
The Medicare agency contends that it does not have the legal authority to force insurers to return money to beneficiaries or to the Medicare trust fund when auditors find “errors, incorrect or unreasonable assumptions or other misstatements” in company bids.
The Government Accountability Office insisted that Medicare officials “had the authority to pursue financial recoveries,” but did not use it.
Medicare hires private firms to conduct many audits. Insurers said that in many cases the auditors were not well versed in the intricacies of Medicare. Moreover, they said, Medicare has not provided clear guidance on how to define important items like administrative costs.
Medicare officials said they found significant errors in bids from 18 of the 80 organizations audited last year. But the Government Accountability Office said “there is a low probability of the audits identifying intentional misrepresentations,” because Medicare relies heavily on actuaries who prepare the bids to certify their accuracy.
Under a 2001 law, every federal agency is supposed to have a program for “recovering any amounts erroneously paid to contractors.”
The Bush administration told the Government Accountability Office that “general federal contract laws do not apply to the payments made under Medicare contracts.”
What the critics are saying about Michael Moore’s new film...
SiCKO
"Three years after winning Cannes' top prize for 'Fahrenheit 9/11,' docu helmer and agent provocateur Michael Moore returns to the Croisette with more polemics-as-performance-art in 'Sicko,' an affecting and entertaining dissection of the American health care industry, showing how it benefits the few at the expense of the many. Pic's tone alternates between comedy, poignancy and outrage as it compares the U.S system of care to other countries."
-- Alissa Simon, Variety
"Moore has a genius for confrontational stunts — demanding a meeting with General Motors Chairman Roger Smith, chatting up an addled Charlton Heston on gun control, buttonholing Congressmen to see if any of them had actually read the Patriot Act — but the Cuba jaunt tops them all. It begins when he hears Congressional testimony indicating that detainees at Guantanamo were getting free colonscopies [sic.] and nutrition counseling."
-- Richard Corliss, Time Magazine
"Three years after conquering the Cannes Film Festival and winning the Palme d’Or for 'Fahrenheit 9/11,' Michael Moore has returned the amour big time with 'Sicko,' his most fluid provocation to date. A persuasive, insistently leftist indictment of the American health care system, as well as a funny valentine to all things French — and many things Canadian, British and Cuban — the film shows that while Mr. Moore remains a radical partisan, he has learned how to sell his argument with a softer touch. He’s still the P. T. Barnum of activist cinema, but he no longer runs the entire circus directly from the spotlight."
-- Manhola Dargis, New York Times
"The revolutionary filmmaker, who shattered all box-office records for a documentary with his last effort, 'Fahrenheit 9/11,' has returned to the Cannes Film Festival with another log to throw on the bonfire, his new film, 'Sicko.' Perhaps the most improbable 116 minutes ever conceived, it is a film about . . . health insurance!"
-- William Booth, Washington Post
"After the screening, several hard-nosed U.S. critics and journalists admitted to crying during the film."
-- Anthony Kaufman, Wall Street Journal
"It's very much in the Michael Moore vein — hilarious, but I was crying through about a third of it."
-- Peter Brunette, Boston Globe
" 'Sicko' has been rapturously received by audiences and critics at Cannes..."
-- Jill Lawless, Associated Press
" 'Sicko' is not just an indictment of an indefensible health care industry in the U.S. It's a rejoinder for those who think we can fix the soulless monster by tinkering with an unconscionable system that puts us further in thrall to those who created the crisis."
-- Rose Ann DeMoro, Huffington Post
"Filmmaker Michael Moore's brilliant and uplifting new documentary, 'Sicko,' deals with the failings of the U.S. healthcare system, both real and perceived. But this time around, the controversial documentarian seems to be letting the subject matter do the talking, and in the process shows a new maturity."
-- Roger Friedman, Fox News
"...a very strong and very honest documentary about a health system that's totally corrupt and that is without any care for its patients."
-- Stephen Schaefer, Boston Globe
DON’T MISS THIS MOVIE!
See also: Nests of the Insurance Vampires; Blessed Are The Peacemakers; Freedom To Sing; The Eagle Hooded: The 9-11 Coverups
January 29, 2006
Frist Says He Got ‘No Nods, No Winks’
Before HCA Stock Sale
Bloomberg
U.S. Senate Majority Leader Bill Frist said he got “no tips, no nods, no winks, ever” before selling his stock in HCA Inc. in 2005, one month before a company earnings report sent share prices tumbling.
Frist, who holds his shares in a Senate-approved trust, said today on NBC’s “Meet the Press,” that he had no inside information about the company, a hospital chain founded by his father and brother. The Securities and Exchange Commission and Justice Department both are looking into the 2004 sale....
The investigations and questions about the stock sale are among the factors complicating Frist’s decision about entering the race for the 2008 Republican presidential nomination. Frist is retiring from the Senate when his second term expires next January and he has been making trips for speeches in New Hampshire and Iowa where the nomination campaign begins.
Frist, 53, said he misspoke in 2003 when he said that because it was held in a “blind trust” as far as I know, I own no HCA stock.” He said he should have made it clear he didn’t know how “how much stock of any particular entity” the trust held.
He acknowledged that “what America thinks is a blind trust, it may be something different, but I’m going to follow the rules, which I did.”
Frist ordered his trustees to sell the stock on June 13, a month before the Nashville, Tennessee, company issued a second-quarter earnings estimate that failed to meet analysts’ predications. HCA shares plunged 8.9 percent, the biggest decline in more than two years.
Appearances
Frist told “Meet the Press” that he sold the stock because news reports repeatedly raised questions about his holdings while Congress debated health care legislation. “So finally, I got tired of those stories,” he said.
When he set up his trust in 2000, Frist reported owning between $5 million and $25 million in HCA shares....
Frist said he will decide about the presidential race after he leaves the Senate and returns to Tennessee.
December 18, 2005
Frist Charity paid $456,125
to political consultants
Donors included several firms with frequent
business before Congress
By Jonathan M. Katz and John Solomon, Las Vegas Review-Journal
WASHINGTON (AP) - Senate Majority Leader Bill Frist’s AIDS charity paid nearly a half-million dollars in consulting fees to members of his political inner circle, according to tax returns providing the first financial accounting of the presidential hopeful’s nonprofit.
The returns for World of Hope Inc., obtained by The Associated Press, also show the charity raised the lion’s share of its $4.4 million from just 18 sources. They gave between $97,950 and $267,735 each to help fund Frist’s efforts to fight AIDS.
The tax forms, filed nine months after they were first due, do not identify the 18 major donors by name.
Frist’s lawyer, Alex Vogel, said Friday that he would not give their names because tax law does not require their public disclosure. Frist’s office provided a list of 96 donors who were supportive of the charity, but it did not say how much each contributed.
The donors included several corporations with frequent business before Congress, such as insurer Blue Cross/Blue Shield, manufacturer 3M, drug maker Eli Lilly and the Goldman Sachs investment firm.
World of Hope gave $3 million it raised to charitable AIDS causes, such as Africare, and evangelical Christian groups with ties to Republicans – Franklin Graham’s Samaritan Purse and the Rev. Luis Cortes’ Esperanza USA, for example.
The rest of the money went to overhead. That included $456,125 in consulting fees to two firms run by Frist’s longtime political fundraiser, Linus Catignani. One is jointly run by Linda Bond, the wife of Sen. Christopher “Kit” Bond, R-Mo.
The charity also hired the law firm of Vogel’s wife Jill Holtzman Vogel, and Frist’s Tennessee accountant, Deborah Kolarich.
Kolarich’s name recently surfaced in an e-mail involving Frist’s controversial sale of stock in his family-founded health care company. That transaction is now under federal investigation.
Jill Holtzman Vogel, who is raising money for a run for the state Senate in Virginia in 2007, has received thousands in contributions this year from Catignani & Bond and from her husband, among numerous other sources, according to data released by the Virginia Public Access Project....
Frist is listed as the charity’s president, and his wife was listed as secretary. Neither was compensated.
Political experts said both the size of the charity’s big donations and its consulting fees raise questions about whether the tax-exempt group benefited Frist’s political ambitions....
Dent Cooper, the Federal Election Commission’s former public disclosure chief, said the big donors’ motives are also suspect.
“These tax deductible gifts were earmarked through Senator Frist,” Cooper said. “They were raised in the political arena at the 2004 Republican Convention, and the natural question is were they given to the Senate majority leader to gain favor or were they given for true charitable purposes?”
September 24, 2005
Sale of stock by Frist is scrutinized
by Jeffrey Birnbaum and Jeffrey Smith, Washington Post
WASHINGTON - Senate Majority Leader Bill Frist is facing questions from the Justice Department and the Securities and Exchange Commission about his sale of stock in his family’s hospital company one month before its price fell sharply.
The Tennessee lawmaker, who is the Senate’s top Republican and a likely candidate for president in 2008, ordered his portfolio managers in June to sell his family’s shares in HCA Inc., the nations largest hospital chain, which was founded by Frist’s father and brother.
A month later, the stock’s price dropped 9 percent in a single day because of a warning from the company about weakening earnings. Stockholders are not permitted to trade stock based on inside information, whether Frist possessed any appears to be at the heart of the probes.
HCA owns four hospitals in Las Vegas: Sunrise Hospital and Medical Center ... Sunrise Children’s Hospital ... Mountain View Hospital ... and Southern Hills Hospital and Medical Center...
A spokesman said Frist’s office has been contacted by the SEC and the U.S. attorney’s office in Manhattan about his divestiture of the stock. HCA officials disclosed separately that the company was subpoenaed by the same U.S. attorney’s office for documents that were related to Frist’s sale....
According to Frist’s office, the senator decided to sell all his HCA stock - held in blind trusts managed by two companies for him, his wife and his children - on June 13. Under the rules of the trusteeships, Frist had no control over the timing of the sale, Frist spokeswoman Amy Call said.
When the company disclosed that its second-quarter earnings would fall short of Wall Street expectations a month later, the stock price slid steeply. By that time, Frist’s shares had been divested....
Frist’s financial disclosure statement earlier this year placed the value of his blind trusts at between $7 million and $25 million.
HCA was founded in 1968 by Frist’s father, Thomas Frist, his brother, Thomas Frist, Jr., and Jack Massey, the former owner of Kentucky Fried Chicken...
< < < FLASHBACKS < < <
December 21, 2002
LOTT QUITS AS GOP LEADER
Likely successor is Sen. Frist of Tennessee
By James R. Carroll and Al Cross, The Courier-Journal
WASHINGTON - Two weeks of furor surrounding Senate Republican Leader Trent Lott's comments on segregation resulted yesterday in Lott giving up his leadership post as other GOP senators realigned behind Sen. Bill Frist of Tennessee.
Sen. Mitch McConnell of Kentucky, widely believed to be a potential successor to Lott, instead backed Frist without mounting a campaign for the job. McConnell already was set to become whip, the second-ranking GOP post, when the Senate convenes next month....
Frist's leadership will be closely watched, Price and other civil-rights leaders promised. Frist's support for conservative judges, tax policies that favor the wealthy and other issues do not bode well, they said....
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From the internet posting Columbia/HCA; Corporate Imbalance Sheet:
Columbia/HCA - Wall Street Health Care
● $216,000 - Amount of PAC money Columbia/HCA's Good Government Fund contributed in Florida in 1994, making it Florida's largest PAC
● 24 - Columbia/HCA lobbyists employed to repeal 1992 Florida state legislation requiring the corporation to disclose its physician-investors.
● 6 - Number of lobbyists Columbia/HCA shares with the tobacco industry in three southern states.
● $19.9 billion - Revenue in 1996.
● 18 - Hospitals closed since 1994
● 2,000 - Layoffs and positions eliminated since 1995.
● $70,000 - Total fines paid for two separate patient "dumping" violations in Florida, including one for $55,000 (the highest penalty ever paid by a hospital).
● $19 million - Money that would go into pockets of Blue Cross/Blue Shield of Ohio's board members and an outside council, if Columbia/HCA deal goes through.
● $116 million - Tax breaks over 10 years for Columbia/HCA to move its headquarters from Kentucky to Tennessee.
● $30,000 - Amount Florida Senator Genny Brown-Waite received as a consultant to Columbia/HCA while serving on the Senate Health Care Committee.
● 30% - Hospitals in Florida owned by Columbia/HCA.
● 4 - Attorneys General who have sued to block deals involving Columbia/HCA.
● $25,000 - Fine for failing to have enough nurses on duty to ensure patient safety at Columbia Women's Hospital in Indianapolis.
● $3.5 billion - Amount Columbia/HCA has said it is prepared to spend to set up a network in the Northeast.
● 3 - Days notice Columbia/HCA gave town Destin, Florida before it closed the hospital in 1994.
● $1.1 billion - Net worth of Columbia/HCA Vice-Chair Thomas Frist, who made the Forbes 400 list of richest Americans.
● $13.9 million - Columbia/HCA stock held in 1995 by US Senator Bill Frist (TN), brother of Thomas Frist.
● 20% - Profit goal per hospital.
● $40 million - Estimated cost of Columbia/HCA's recent ad campaign to build its image as a national brand name.
● $87 million - Amount of taxes Columbia/HCA owed in partial settlement with the IRS.
● $600 million - Amount of taxes IRS says Columbia/HCA still owes.
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December 18, 2002
HCA cuts deal
to end fraud probe
Hospital company to pay $631 million
Copyright 2002 Houston Chronicle News Services
NASHVILLE, Tenn. -- HCA, the nation's largest for-profit hospital chain, announced a $631 million settlement Wednesday with Justice Department attorneys that would end the government's nine-year investigation of health care fraud allegations against the company.
The settlement, which requires formal approval by the Justice Department and the courts, would raise the amount of civil fines and criminal penalties the Nashville-based company has paid the government to $1.7 billion over the past few years.
HCA had pleaded guilty previously to defrauding government health care programs.
In the cases included in the settlement agreement, whistle-blowers alleged the company filed false claims and paid kickbacks to doctors so they would refer Medicare and Medicaid patients to its facilities.
James Thompson, a Texas doctor who filed a whistle-blower suit in 1995 alleging kickbacks and Medicare fraud, said the case cost him his health and his practice. He said other doctors ostracized him, so he practiced alone without a day off for three years, suffering a stroke in 1998.
"I said it then, and I'll say it again: Doctors have a duty to protect the health of the community. They protect their patients first, and profits last," said Thompson, who filed the suit in Corpus Christi and lives in Rockport.
"I am proud of what I did, and I'd do it again. But I'm sure glad it's over."
However, attorneys representing other whistle-blowers were not ready to sign off on the settlement. The government has not detailed how the money will be split up or how much will go to the whistle-blowers.
"We have a statutory right and obligation to ensure the settlement is fair, adequate and reasonable," said John R. Phillips of Phillips & Cohen, which represented the whistle-blowers in the cost-report case. "Once we have more information, we intend to fully analyze the settlement."
The firm represents James Alderson, former chief financial officer of a Montana hospital run by a company once owned by HCA. He says he was fired for failing to include aggressive claims on a cost report and filed suit in 1993 charging fraud. That is when the Justice Department began examining the allegations.
Stephen Meagher, another attorney for the whistle-blowers, said attorneys were about to take depositions from HCA Chief Executive Officer Jack Bovender and co-founder Thomas Frist Jr.
Bovender was scheduled to testify next month and Frist in February, he said.
The settlement also comes with Sen. Bill Frist, a Tennessee Republican and Thomas Frist's brother, emerging as a candidate to replace Trent Lott as Senate majority leader.
Under the settlement agreement, HCA would pay the Justice Department $631 million beginning Feb. 3 and the government would end its investigation.
Whistle-blowers like Thompson and Alderson may be entitled to a share of that money.
Previously, HCA agreed to pay $250 million to resolve non-related outstanding Medicare cost report issues with the Centers for Medicare and Medicaid Services. The company, formerly known as Columbia/HCA, paid $840 million in 2001 to settle other whistle-blower cases and pay criminal fines.
In 1999, two former HCA executives -- Jay Jarrell and Robert Whiteside -- were convicted of conspiring to defraud the government and making false statements in Medicare reimbursement cost reports for a hospital in Port Charlotte, Fla.
The convictions were overturned this year on appeal. It was the only case that went to trial.
The Justice Department closed its criminal investigation of HCA executives in July, clearing them to testify in the civil Medicare and Medicaid fraud cases.
The company also said Wednesday it has reached an agreement with attorneys representing states with claims similar to the government's. Under this agreement, HCA will pay $17.5 million to state Medicaid agencies.
HCA expects to charge approximately $395 million against earnings after taxes in the fourth quarter of 2002 because of the settlements.
The company also will be obligated by law to pay legal fees of the whistle-blowers' attorneys. The company expects to record a charge for these fees in the fourth quarter of 2002.
"We are pleased to have successfully negotiated a settlement to the remaining two civil issues," said Jack O. Bovender Jr., HCA chairman and CEO.
Justice Department spokesman Charles Miller issued a statement saying, "We have had discussions with HCA about resolving this civil litigation. The staff assigned to this matter has now reached a tentative understanding with HCA for a settlement."
"Until I see the math, I'll remain skeptical," Sen. Charles Grassley, an Iowa Republican who helped rewrite the whistle-blower law, said in a written statement.
"This settlement can't be a Christmas gift to HCA and a lump of coal for the taxpayers."
Wall Street liked the news. HCA shares rose 3.4 percent, or $1.39 a share, to close Wednesday at $42.90 on the New York Stock Exchange.
From the FBI, Salt Lake City web posting:
Crime in a
White-Collar World
. . . Recently, the Salt Lake City Division spearheaded the investigation of the Columbia HCA network of hospitals and healthcare providers. As a result of this operation, many key players, including a few high-level officials of Columbia, are under federal indictment for Medicare fraud.
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From BLB&G Columbia/HCA web posting: . . .
Bernstein Litowitz Berger & Grossmann LLP, acting for the benefit of the New York State Common Retirement Fund and the California Public Employees' Retirement System (CalPERS) and 10 other institutional investors and individual plaintiffs, filed this derivative action on behalf of Columbia/HCA Healthcare Corp against members of the Board of Directors and former senior executives of the Company.
This derivative action seeks to hold the defendants responsible for subjecting Columbia to the largest health care fraud investigation in history, extensive nationwide litigation and potential massive fines and penalties....
On March 19, 1997, officials from the FBI, IRS, and HHS executed search warrants on Columbia's offices in El Paso, Texas, as part of a long-term, on-going investigation into allegations of potential health care fraud. A fourth federal agency, the DOD's Criminal Investigation Service later joined in the investigation.
The federal investigations uncovered illegal billing practices, illegal referrals, and illegal acquisition practices. By the middle of the summer the agents raided 35 additional facilities in six more states: Tennessee, Florida, Utah, Oklahoma, Georgia and North Carolina....
In late July, 1997, a federal grand jury in Florida indicted three Columbia executives, two from Florida and one from the corporate office in Tennessee, on five counts including charging the executives with conspiracy to defraud the government by falsifying cost reports used for reimbursements by Medicare and Champus....
In addition to Columbia's systematic violations of the SSA, the HIPPA, the FCA, the antitrust laws, as well as other federal and state laws, the complaint alleges that certain of Columbia's senior level officials sold their shares of Columbia's stock to the unsuspecting public with full knowledge that public disclosure of the investigations would have adverse consequences to Columbia's publicly traded stock prices....
August 14, 1997
For Columbia/HCA Healthcare Corp,
things are going from bad to worse
CNNfn
This time, the new chief executive and six other officials stand accused of illegal insider trading....
A lawsuit filed late Wednesday by New York State Comptroller Carl McCall accuses newly named chairman Thomas Frist of selling 3.7 million shares of Columbia stock in 1996 and 1997 for $138 million.
McCall filed the suit on behalf of the New York State Retirement Fund, which owns 2.4 million shares of Columbia stock....
~ o ~
(Catbird Note: Before Columbia and HCA merged, George W. Bush supporter Richard Rainwater put in about $125,000 in Columbia and $15 million in HCA. On 11/17/97, the Columbia/HCA board approved an internal operating reorganization plan and Goldman Sachs assisted the company in its evaluation of restructuring alternatives. Hawaii's giant charitable trust, Bishop Estate, already a major owner in Goldman Sachs, also became a major investor in Columbia/HCA).
May 10, 1999
Fraud trial begins for four
Columbia/HCA executives
Nurses Week/Health Week
Several years after its investigation started, the government is trying four executives of Columbia/HCA Healthcare Corp on charges they filed false healthcare claims in an attempt to cheat the government out of $2.8 million....
The case, being heard in a Tampa, Fla., federal court, is the first to reach trial in the FBI's largest healthcare investigation ever...
This trial is part of a larger fraud case against Columbia. That investigation has led to raids on Columbia facilities in several states and a management shakeup. The company also is facing a number of lawsuits, including seven whistle-blower fraud suits...
December 14, 2000
Settlement In HCA Health Fraud Probe
NASHVILLE. - America's largest for-profit hospital chain has agreed to pay the federal government $95.3 million to settle criminal fraud charges.
The Healthcare Company (HCA) had already agreed in May to pay $745 million in civil fines and penalties.
Combined, it is the largest government fraud settlement in history.
The Nashville-based company was accused of conspiring to defraud government health care programs, paying kickbacks to doctors for referring patients and submitting false bills. The criminal charges were related to the company's hospitals in Florida, Georgia, Texas and Tennessee....
Attorney General Janet Reno and other federal officials were expected to officially announce the settlement Thursday afternoon.
The company, formerly known as Columbia/HCA Healthcare Corp., this spring settled civil fraud allegations that it overbilled for lab and home health care services and overstated patient illnesses to get more money from the government, called "upcoding."
The civil settlement, which also included hospitals in Utah and Pennsylvania, was contingent on the government and HCA reaching a consensus on the criminal fines and penalties by Dec. 31.
It was unclear whether the company would admit guilt to any of the criminal allegations.
The settlements cap a five-year investigation into allegations by whistle-blowers and others in the health industry that HCA conspired to defraud government health insurance plans, including Medicare, which covers the elderly; Medicaid, which covers the poor; and