HCA to settle criminal charges
HCA to settle criminal charges
HCA announced recently that it has signed an agreement with the criminal division of the Department of Justice and U.S. attorneys’ offices in Atlanta; El Paso, TX; Miami; and Tampa, FL, to resolve all pending federal criminal issues in the Columbia investigation for $95 million.
The company already has signed a civil settlement agreement with the civil division of the Department of Justice, first announced by the company in May 2000 to resolve civil false claims issues related to DRG coding, outpatient laboratory, and home health. The resolution of the case also includes the signing of a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.
In announcing the settlement, Thomas Frist Jr., MD, HCA chairman and CEO, said, "Today’s action represents one of the last steps needed to put the Columbia investigation behind us and allows us to move forward, maintaining our focus on providing quality patient care." Frist was named chairman and CEO of the company in July 1997 after the charges were made.
In exchange for a full criminal release for the company and its affiliates on all federal health care billing issues involved in the investigation up to the date pleas are entered, Columbia Management Companies Inc. and Columbia Homecare Group Inc. (nonoperating subsidiaries) have agreed to plead guilty to conspiracy, receiving unlawful remuneration, making false statements, and numerous charges related to DRG coding and cost reports.
Resolving the issues
The agreements resolve all federal criminal issues outstanding against the company and civil issues related to outpatient lab billing, home health issues, and DRG coding. In addition, representatives of state attorneys general have agreed to recommend to state officials that the company be released from corresponding criminal liability in all states in which the company operates. The company continues to discuss civil issues relating to cost reporting and physician relations with the government.
The criminal agreement also will result in the company divesting Deering Hospital in Miami. The company has been in discussions over the past few years with buyers interested in acquiring the hospital. The divestiture was agreed to as part of the overall criminal resolution, and does not reflect an admission or understanding that the facility was involved in the specific situations discussed in the agreement. In addition, the company has agreed to the exclusion from the Medicare program of Clearwater (FL) Community Hospital, which the company closed in February 1999.
As part of the criminal agreement, the company will pay the government approximately $95 million, which the company recorded as a special charge in the fourth quarter of 2000. The criminal agreement is conditional upon entry of pleas in federal district court and necessary court approvals, which are expected in the first quarter of 2001. Payment of the criminal settlement will be made by the company within five days after all necessary court approvals are obtained. As previously announced last in May, the civil agreement completed includes a provision for the company to pay the government $745 million plus interest. Payment of the civil settlement will be made upon court approval of the settlement, which is expected by late March. The accounting charge for the civil settlement was recorded in the second quarter of 2000.
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