Columbia-HCA Target of Medicare Fraud Investigation

The nation’s largest health-care company, Columbia-HCA Healthcare Corp., is being investigated for possible Medicare fraud, officials said Friday.

Columbia, which has 350 hospitals across the nation, faces questions about whether it padded bills to the government.

Federal regulators may also be looking into whether the company broke the law by getting doctors to invest indirectly in, and then refer patients to, its outpatient-care facilities, a newspaper reported.

A spokesman for the inspector general’s office at the Health and Human Services Department, who asked not to be identified, said the FBI is helping to look into the possibility of violations of federal law by Columbia after the office that runs Medicare had raised concerns.

President Clinton announced a new government crackdown on Medicare fraud at a White House ceremony this week.

In the criminal investigation of Colum

bia, the FBI on March 19 searched El Paso medical facilities “linked to the Columbia health-care system,” special agent Al Cruz said. Documents were seized and are being reviewed, but Cruz would not say exactly what agents are looking for.

The company has not been informed about the scope or nature of the investigation, Columbia spokeswoman Eve Hutcherson said. But she denied the company has either overcharged the government or skirted laws preventing doctors from investing in businesses to which they refer patients.

Regulators’ suspicions about Columbia were aroused last year when a government review of records found that the company’s Spring View Medical Center in Kentucky had diagnosed and billed for the most severe form of one respiratory ailment much more often than had other area hospitals, the New York Times reported Friday.

Medicare sets standard payments to doctors and hospitals for treatment of each illness. The more serious the patient’s condition, the higher the payment. At Spring View, each time Columbia reported the most serious diagnosis rather than a lesser one, the company got as much as $4,000 more from Medicare, the Times said.

The newspaper also conducted its own survey and found similar irregularities at Columbia’s Texas and Florida hospitals.

Also at issue may be whether Columbia violated the law by asking its doctors to invest in the hospitals where they work while it expanded outpatient services, such as rehabilitation and home health care.

A 1992 law bars doctors from having a financial stake in medical facilities to which they refer patients, ensuring treatment decisions are based on patient need and not doctors’ wallets.

But an exception lets doctors invest in hospitals because often they’re the only ones who will do so in rural areas.

In Columbia’s case, however, its doctors invested in its hospitals, its hospitals sponsored new home-care and rehabilitation services, and then its doctors sent business to those services.

“Clearly we believe that the structure of those partnerships is in compliance with law,” Hutcherson said.