Nation's Largest Hospital Chain to pay $840M for Fraud Claim

The Healthcare Company has agreed to plead guilty to defrauding the government. HCA will pay more than $840 million in criminal fines, civil penalties and damages.

After a seven-year federal investigation initiated by private whistleblowers, this is the largest government fraud settlement ever negotiated by the Justice Department. The agreement did not settle civil allegations that allege the company paid doctors kickbacks for referring Medicare and Medicaid patients to its facilities

Two of the HCA's units-Columbia Homecare Group Inc. and Columbia Management Companies--will pay more than $95 million in criminal fines and are no longer eligible for federal health care program participation.

A civil settlement of $731.1 million will go directly to the federal government. However, up to 25% will be paid to whistleblowers that provided the necessary information to proceed with the case. An additional $13.6 million will be distributed to state governments.

Attorney General Janet Reno said this was the largest healthcare fraud investigation in history. It involved 30 US attorneys' offices, 22 FBI field offices, inspectors general from the Health and Human Service Department, Defense Department investigators, and state fraud units.

Since 1997, HCA has restructured the company, which included the firing of chief executive Richard L. Scott. The company has also sold more than 100 hospitals and gone out of the home healthcare business.

The company will plead guilty to filing false cost reports, fraudulently billing Medicare for home healthcare workers and management and wound care center workers, fraudulently billing Medicare and other health programs by inflating the seriousness of pneumonia diagnoses, paying kickbacks in the sale of home healthcare agencies, and giving kickbacks to doctors to refer patients.

Guilty pleas will be filed in Miami, Atlanta, Nashville, Tampa, and El Paso.

Information from the AP.