Columbia faces second federal investigation into Medicare fraud
Columbia faces second federal investigation into Medicare fraud
By MEREDITH BONNER
HHBR Editor
The U.S. Justice Department (Washington) has joined a second whistleblower lawsuit accusing Columbia/ HCA Healthcare (Nashville, TN) with attempting to defraud federal health programs. The latest suit includes Columbia’s home health operations, most of which have been sold, as well as its hospitals.
The suit, reported Dow Jones News Service, was filed in April 1997, but was not unsealed until last week. Initially filed by John Schilling, a former regional reimbursement supervisor for Columbia, the suit accuses the company of submitting false cost reports to Medicare, Medicaid, and military health insurance programs to receive higher reimbursement for services.
Columbia and its executives have been the target of a two-year criminal Medicare-fraud investigation by the federal government, which has prompted the sale of its home care division Columbia Homecare Group (Dallas) and a massive restructuring of its management team.
The charges alleged in the civil first suit were part of another whistleblower suit, unsealed in October by the same court. The suit also charges Quorum Health Group, which had been part of the Hospital Corporation of America, with which Columbia merged, until the late 1980s. Quorum was not named in last week’s suit, which focuses on Columbia’s operations before in acquired HCA in 1994.
About 100 of the company’s 300 hospitals are covered by the latest suit, aside from the company’s home health operations. In 1993, according to the suit, Columbia’s Southwest Florida Regional Medical Center bought a home health agency from ResCare and retained ResCare to manage the operations. Columbia then bought Able Care Home Health Agency to run the ResCare business, but continued to pay ResCare monthly fees. Columbia allegedly then included those fees on Southwest’s cost reports.
Also according to the suit, Columbia bought several home health agencies from Olsten Corp. (Melville, NY) at "artificially low prices," but paid Olsten inflated fees to manage the agencies. The suit claims the fees paid to Olsten were billed to Medicare and included the cost of goodwill from the acquisition, which Medicare does not reimburse. Columbia sold its Florida home care operations back to Olsten in November for $34 million.
Spokesman Jeff Prescott told Dow Jones that Columbia doesn’t view the latest suit as anything new. He said he is not sure how the latest suit will affect the company’s negotiations with the government to reach a settlement.
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