Columbia/HCA execs face more federal charges
Columbia/HCA execs face more federal charges
Federal prosecutors are turning up the heat on Columbia/HCA. In the latest move, a Tampa, FL, grand jury has levied more indictments on several Columbia hospital executives already facing charges.
The superseding indictment accuses the managers of attempting to impede a federal auditor as well as making false statements to obtain Medicaid benefits. Those indicted are: Jay A. Jarrell, CFO of Columbia’s Southwest Florida division; Michael T. Neeb, CFO of the Jacksonville division; Robert W. Whiteside, reimbursement director for Columbia hospitals nationwide; and Carl Lynn Dick, CFO of the Central Florida division.
While Dick is a new defendant, Jarrell, Neeb and Whiteside were previously indicted in June 1997 for filing false cost reports to Medicare and CHAMPUS. The reports were allegedly filed on behalf of Fawcett Memorial Hospital, Port Charlotte, FL, from 1986 to 1997. The defendants are accused of listing interest payments on Fawcett’s long-term debt as pure capital expenditures, which command a higher reimbursement rate from Medicare. In reality, only 39% were capital expenditures, with the remainder going for other expenses such as salaries, according to the government.
The Columbia managers allegedly failed to notify the fiscal intermediary that it had made an auditing error that allowed approximately $2.7 million in improper interest rate deductions to continue. It’s also alleged that, in 1994, Jarrell, Neeb and Whiteside participated in a meeting to discuss whether to make "an attempt to influence the auditor with an offer of employment, if necessary."
The government also has alleged that Columbia created a reserve fund specifically earmarked to return overpayments should its error be discovered. In addition, the defendants allegedly misrepresented facts in order to get a favorable legal opinion regarding their activities.
Columbia spokesman Jeff Prescott declines to discuss the specifics of the case, but does say the indictments are "not a surprise." He adds that prosecutors had previously said they might seek additional indictments in the Florida case. The four executives currently are on paid leave.
Prescott also declines to confirm numerous reports that settlement talks have long been underway between Columbia and the Justice Department. However, he says, "Our lawyers have been talking to them every day." Columbia routinely notifies DOJ of business decisions, such as the recent announcement of a $1 billion stock buyback. "We don’t want to surprise them with any of our business decisions," Prescott adds.
Columbia also is stepping up the pace of its newly expanded compliance program. Standards of Conduct as well compliance training tapes were recently distributed to employees, Prescott says.
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