Panel Overturns HCA Convictions

HCA Inc. said Sunday that a federal appellate court overturned health-care fraud convictions against two executives of the biggest U.S. hospital chain, just as the government considers whether to prosecute others in the case.

The 11th Circuit Court of Appeals in Atlanta reversed the convictions of Jay A. Jarrell and Robert W. Whiteside on Friday, HCA said. They were found guilty on six counts each in July 1999 as part of a fraud investigation against the company.

The three-judge panel said the U.S. government failed to prove Jarrell and Whiteside had knowingly and willfully made false statements in reports to Medicare. The two men were the only HCA executives to be convicted in the case. HCA has paid $840 million in penalties to settle related criminal allegations and most civil allegations against the company.

“The appeals case confirmed that in the cost reporting process the applicable rules and regulations are frequently unclear, ambiguous and subject to conflicting interpretations,” Pat Loughlin, an HCA attorney, said in a written statement.

Attorneys for Jarrell and Whiteside could not be reached for comment. The Justice Department did not return phone calls.

Jarrell had been sentenced to 33 months in prison and ordered to pay $1.7 million in fines and restitution.

Whiteside had been sentenced to two years in prison and ordered to pay more than $500,000 in restitution.

The ruling comes as the Justice Department and Nashville-based HCA battle over remaining civil fraud claims that allege the company overbilled Medicare by about $650 million by inflating cost reports and paying kickbacks to doctors in exchange for patient referrals.