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THE TOP 100 FALSE CLAIMS ACT SETTLEMENTS: THE CASE HISTORIES

http://www.corporatecrimereporter.com/

1) HCA ($731,400,000) *

In December 2000, HCA The Healthcare Company (formerly known as Columbia HCA),the largest for profit hospital chain in the United States, agreed to plead guilty to criminal conduct and pay more than $840 million in criminal fines, civil penalties and damages for alleged unlawful billing practices.
Under the agreement, HCA will pay a total of $745 million to resolve five allegations regarding the manner in which it bills the U.S. government and the states for health care costs. The agreement does not resolve allegations that HCA unlawfully charged for the costs of running its hospitals on cost reports submitted to the government, and that it paid kickbacks to physicians to get Medicare and Medicaid patients referred to its facilities.

Of the $745 million, the settlement requires HCA to pay:
* more than $95 million to resolve civil claims arising from the company's outpatient laboratory billing practices, which included billing to Medicare, Medicaid, the Defense Department's TRICARE health care program, and the Federal Employees' Health Benefits Program, for lab tests that were not medically necessary, not ordered by physicians, as well as
other billing violations;
* more than $403 million to resolve civil claims arising from "upcoding," where false diagnosis codes were assigned to patient records in order to increase reimbursement to the
hospitals by Medicare, Medicaid, TRICARE and the Federal Employees' Health Benefits Program. The guilty plea includes one count relating to this upcoding practice;
* $50 million to resolve civil claims that the company illegally claimed non reimbursable marketing and advertising costs it disguised as community education. Medicare reimburses providers for "community education" - costs to educate the community at large about public health issues - but not for advertising and marketing a hospital's services;
* $90 million to resolve civil claims that HCA illegally charged Medicare for non reimbursable costs incurred in the purchase of home health agencies owned by the Olsten
Corporation, as well as other agencies in Florida, Georgia and Alabama.

According to the government, HCA devised an elaborate scheme to hide these costs in reimbursable "management fees" paid to third parties. In 1999, a subsidiary of Olsten Corporation, Kimberly Quality Care, entered into criminal plea agreements in three districts and paid more than $10 million in criminal fines. Olsten paid nearly $41 million as part of a civil settlement arising from its collusion with HCA for that conduct. HCA has now agreed to pay $90 million to settle this issue, and $106 million to resolve civil claims for billing Medicare, Medicaid and TRICARE for home health visits for patients who did not qualify to receive them or were not performed and for committing other billing violations.

Many of the civil issues resolved as part of the agreement arose from lawsuits filed by relators, commonly known as "whistleblowers," under the False Claims Act. This law allows whistleblowers who qualify under the statute to receive up to 25 percent of the settlement recovery in cases the government pursues.

In addition to the civil settlement, two subsidiaries of Tennessee based HCA, Columbia Homecare Group Inc. and Columbia Management Companies Inc. entered into a criminal plea
agreement in which they agreed to pay $95,336,432 in criminal fines and plead guilty toseveral charges involving a wide range of criminal conduct which occurred at HCA's hospitals
nationwide.
(“HCA To Pay $840 Million,” 15 Corporate Crime Reporter 1(5), January 1, 2001)
2) HCA ($631,000,000) *

In June 2003, HCA Inc. (formerly known as Columbia/HCA and HCA – The Healthcare Company) will pay the United States $631 million in civil penalties and damages arising from false claims the government alleged it submitted to Medicare and other federal health programs.

The settlement resolves HCA's civil liability for false claims resulting from a variety of allegedly unlawful practices, including cost report fraud and the payment of kickbacks to
physicians. Previously, on December 14, 2000, HCA subsidiaries pled guilty to substantial criminal conduct and paid more than $840 million in criminal fines, civil restitution and penalties.

Combined with a separate administrative settlement with the Centers for Medicare & Medicaid Services (CMS), under which HCA will pay an additional $250 million to resolve overpayment claims arising from certain of its cost reporting practices, the government will have recovered $1.7 billion from HCA, by far the largest recovery ever reached by the government in a health care fraud investigation.

"Health care providers and professionals hold a public trust, and when that trust is violated by fraud and abuse of program funds, and by the payment of kickbacks to the physicians on whom patients and the programs rely for uncompromised medical judgment,health care for all Americans suffers," Robert D. McCallum, Jr., Assistant Attorney General for the Civil Division said. "This settlement brings to a close the largest multi-agency investigation of a health care provider that the United States government has ever undertaken and demonstrates the Department of Justice's ongoing resolve and commitment to pursue all types of fraud on American taxpayers, and health care program beneficiaries."

This latest settlement resolves fraud allegations against HCA and HCA hospitals in nine False Claims Act qui tam or whistleblower lawsuits pending in federal court in the
District of Columbia. Under the federal False Claims Act, private individuals may file suit on behalf of the United States and, if the case is successful, may recover a share of the proceeds for their efforts. Under the settlement, the whistleblowers will receive a combined share of $151,591,500, the highest combined qui tam award ever paid out by the government.
(“HCA Investigation Nets Record $1.7 Billion,” 17 Corporate Crime Reporter 26(4), June
30, 2003)