2 Hospital Execs Found Guilty in Medicare Case

Two executives of Columbia/HCA Healthcare Corp., the largest U.S. for-profit hospital operator, were found guilty Friday in a $3-million Medicare fraud, while another executive was acquitted and the jury failed to reach a verdict on a fourth.

The federal court jury found defendants Jay Jarrell and Robert Whiteside guilty on six of the seven counts against them. Michael Neeb was acquitted of all seven counts against him, and the jury was hung on a single count of conspiracy against Carl Lynn Dick.

The four executives, who are on paid leave from Columbia/HCA, were accused by the Justice Department of filing false cost reports to cover up an accounting error that resulted in about $3 million in overpayments to the company from federal health-care programs.

The questionable payments were on charges submitted by Fawcett Memorial Hospital in Port Charlotte, Fla., near Fort Myers.

The U.S. government has launched a nationwide investigation of Medicare fraud, which Washington says costs taxpayers $32 billion a year.

The Justice Department has been conducting a criminal investigation of Columbia/HCA and has joined several lawsuits filed by whistle-blowers alleging the Nashville-based hospital operator made false claims and statements in submitting cost reports under Medicare, Medicaid and other federal programs.

At their sentencing Oct. 15, Jarrell and Whiteside each face maximum sentences of five years in prison and $250,000 in fines on each of the six counts. Columbia/HCA said the two would remain on leave pending appeals.

The jury of four women and eight men had been considering the charges since Tuesday. The trial began May 3.

“We are pleased with the verdict,” Assistant U.S. Atty. Robert Mosakowski told reporters. “Health-care fraud is a priority in this district. We’re going to continue to make it a priority.”

Mosakowski said his office would decide soon whether to retry Dick on the single conspiracy count.

Neeb told reporters he was relieved to be acquitted but added: “I believe an injustice was done today in the guilty verdicts against the other two.”

During the trial, the four defendants said they believed the reports they filed with the government were proper and denied being involved in any conspiracy to defraud the federal health-care system.

“For Mike Neeb and for Lynn Dick, we’re pleased for them. For Jay Jarrell and Robert Whiteside, obviously were disappointed. Our sympathy goes out to them and their families,” Columbia/HCA spokesman Jeff Prescott said.