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Columbia fraud 'systemic'
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October 7, 1997: 8:28 a.m. ET
FBI, in affidavit, charges health giant with scheme to swindle government
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NEW YORK (CNNfn) - Columbia/HCA Healthcare Corp. was accused by federal investigators of engaging in a "systemic" effort to defraud federal health care programs in an affidavit made public Monday in Florida.
In various reports published Tuesday, the nation's largest for-profit hospital chain was said to have illegally diverted funds in an effort to hold auditors at bay and to have inflated Medicare reimbursement costs.
The documents also quote confidential sources who allege that former Columbia Chief Executive Officer Richard Scott and former President David Vandewater routinely received updates on problems related to internal company audits.
The audits are part of a grand jury investigation into alleged Medicare fraud in Columbia's southwest Florida hospitals. In July, three middle managers were indicted on charges related to activities at Columbia's Fawcett Memorial Hospital in Port Charlotte, Fla. The affidavit alleges that Samuel Greco, Columbia's former operations chief, was aware of the alleged fraud.
The affidavit claims also alleges that Columbia made it a policy to improperly hike the amount of reimbursements received every year from Medicare, Medicaid and military health care programs.
Victor Campbell, Columbia/HCA's senior vice president and chief spokesman told The Wall Street Journal that the company has not yet reviewed all of the allegations in the affidavit. He also noted that the affidavit was three months old. Since that time, he said Columbia has named a new CEO, referring to Dr. Thomas Frist Jr., who took the helm July 25.
Campbell said Columbia is working hard to show it is committed to cooperating with the government to resolve any outstanding issues.
The document details several cases in which Columbia allegedly hiked its receipts from federal health care programs.
Witnesses also reportedly told authorities Columbia manipulated Medicare cost reports to increase the money it received.
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Columbia/HCA
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