Thursday, June 26, 2003

HCA Inc., the nation’s largest for-profit hospital chain, yesterday agreed to pay the government $631 million in civil penalties and damages for making what federal prosecutors said were false claims to Medicare and other federal health programs, the Justice Department said.

The settlement, marking the end of the most comprehensive health care fraud investigation ever undertaken by the department, resolves HCA’s civil liability for false claims resulting from a variety of unlawful practices, including cost-report fraud and the payment of kickbacks to physicians.

“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,” said Assistant Attorney General Robert D. McCallum Jr., who heads the department’s civil division.

HCA subsidiaries pleaded guilty in December 2000 to substantial criminal misconduct and paid more than $840 million in criminal fines, civil restitution and penalties.

Combined with a separate settlement agreement with the Centers for Medicare & Medicaid Services, under which HCA will pay an additional $250 million to resolve overpayment claims in its cost-reporting practices, Justice Department officials said the government will have recovered $1.7 billion from HCA, the largest recovery ever reached in a health care fraud investigation.

The settlement resolves fraud accusations against HCA and HCA hospitals in nine False Claims Act or whistleblower lawsuits pending in federal court in Washington. Under the act, private individuals can file suit on behalf of the United States and, if the case is successful, recover a share of the proceeds.

Eight whistleblowers, including a doctor who first filed suit in the case in 1995, will receive a combined share of $151.6 million. Most of the whistleblowers are former HCA employees.

Under the first of three agreements, which become effective on the court’s dismissal of the lawsuits, HCA will pay nearly $620 million to resolve eight whistleblower lawsuits in which the government had intervened claiming that HCA systematically defrauded Medicare, Medicaid and other federally funded health care programs through schemes dating back to the 1980s.

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