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U.S. to Join Another Columbia / HCA Suit

Bloomberg News

The Justice Department said it will join in a lawsuit against Columbia/HCA Healthcare Corp. by an ex-employee who says the nation’s largest hospital chain systematically defrauded Medicare and other government health insurance programs. The Justice Department action marks the second time it has joined in a so-called whistle-blower lawsuit against the Nashville-based company, which is also the subject of a criminal fraud probe. The suits are expected to become part of a settlement with the government, as early as next spring, that analysts say could involve a fine of as much as $1 billion. The suit, unsealed Wednesday, was filed by John Schilling, a former supervisor for reimbursement at Columbia’s west Florida division, under a federal law that allows citizen whistle-blowers to sue on the government’s behalf. About one-third of Columbia’s 308 hospitals are named in the suit, which alleges that Columbia and Basic American Medical Inc. filed false reports as far back as 1986 that allowed them to collect reimbursements on costs that the hospitals knew were not allowed. Columbia acquired BAMI in 1992. Columbia/HCA shares fell 25 cents to close at $25 on the New York Stock Exchange. The company’s stock has lost more than 40% of its value since the probe became public in March 1997.


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