HCA Medicare Fraud Lawsuits Still Lingering
While most Wall Street analysts believe that the financial threat to HCA Inc., the nation's largest hospital chain, stemming from its record Medicare-fraud settlement has largely subsided, there are indications that the company's remaining liability may be much higher than anticipated, the Wall Street Journal reports in its "Heard on the Street" column. By most accounts, HCA appears the "picture of health" following a partial settlement in 2000 under which the company agreed to pay the federal government more than $800 million to settle Medicare fraud charges. The Nashville, Tenn.-based company reported that its fourth-quarter profit jumped from $21 million one year ago to $206 million, and its stock has risen more than 40% in the past 12 months, putting its value -- $43 per share as of yesterday -- at the same levels seen before the Medicare scandal. But HCA still faces whistle-blower lawsuits that were filed last March by the Justice Department and allege that the company "systematically defrauded and unlawfully claimed hundreds of millions of dollars from Medicare, Medicaid and other federally funded programs." Most analysts believe the company's liability for these suits will be in the range of $200 million to $400 million. According to private attorneys who filed the suits, the "remaining bill" for HCA's Medicare "lapses" could reach $2 billion.
Last month, HCA "signal[ed]" that it may be "more worried" than Wall Street experts about the Medicare charges by "abruptly cancel[ing] dozens of depositions scheduled by Justice Department investigators" and then halting the remaining depositions, including those of current and former CEOs. HCA spokesperson Jeff Prescott said that the company wants the Justice Department to disclose which current and former employees "might be subject to individual criminal probes" -- though the company settled all the criminal charges against it, individuals could face criminal actions -- so that witness could "decide whether to invoke their 5th Amendment privileges against self-incrimination." Halting the depositions, the Journal reports, indicates that a "low-range settlement" is less likely. James Moorman, president of Taxpayers Against Fraud, a group that represents whistle-blowers but is not directly involved in HCA's case, said, "You know what that says to me? All of a sudden they woke up that they've got a real problem, and they panicked" (Martinez, Wall Street Journal, 2/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.