I'm not a big fan of Columbia/HCA, I don’t know Rick Scott personally, and I don't even have any connections to Florida. But to be fair, a great deal of the purported facts and summary conclusions derived from reported details of the Scott and Columbia/HCA affair need to be corrected. Scott started Columbia, but he did not start HCA; years later Columbia bought HCA to become Columbia/HCA. Most of the alleged fraud at issue was regarding coding and billing for hospital services by HCA long before Scott and Columbia came on the scene. Many of the whistleblower claims of fraud against HCA at the time, were later discredited and followed by court findings favorable to HCA and certain of its lower-level executives.1,2,3.
With Medicare, Medicaid and other hospital insurers, it doesn't matter what the hospital might charge for its services, all insurers have a fixed amount that they pay. For example, if hospital A charges $500 a day and hospital B charges $1500 a day, Medicare will still pay $200 a day, and no more, to either hospital. Thus, any claims by the government that a healthcare provider is guilty of charging too much, are meaningless. Predictably, the goal of all payors, especially Medicare and Medicaid, is to pay out as little as possible. Government is continually searching for ways to avoid paying for healthcare services, and is not above trumping-up imaginary crimes if it might help accomplish this objective.3
Regulations and considerations regarding the proper coding and billing for healthcare services, the methods for determination and reporting of actual hospital costs in providing care, and guidelines regarding physicians’ renting office space from and directing units within hospitals lacked clarity and were highly subjective during the 1990's. It was during this period that, capitalizing on the government’s failure to provide clear direction in this regard, and in response to pressure from the Clinton Administration, there was frantic activity among investigators and prosecutors across the nation to pin fraud on America’s healthcare providers. Based on differing interpretations of nebulous rules, the government pursued this form of healthcare fraud, especially where no real fraud existed, in an attempt to "claw-back" money from the “wealthy” healthcare sector in a wealth redistribution scheme.4
Ironically, during debate over HR 3523 in the U.S. House in 1998, it was then Rep. Bill McCollum who noted that with the federal healthcare payment system, comprised of more than 1,700 pages of law, 1,200 pages of interpretation of the law, and thousands of additional pages of often conflicting instructions, governing over 70 million healthcare claims filed each year, unintended errors and differing interpretations were inevitable. Rep. McCollum explained that a claim was not necessarily fraudulent, just because the government found it inconsistent with their idea of what the law meant, that there had to be an element of intent to defraud.5
By vigorously pursuing all potential “fraud”, even where there was no intent, few healthcare providers escaped reproach. The government also sought to intimidate healthcare providers to bill for a lower level of care than they delivered, as less intensive care is billed with a lower level code and receives a lower payment. In contrast to the “make-believe” fraud that government has aggressively pursued, real fraud (such as the Mafia forming a dummy home healthcare company and billing Medicare for services and equipment never actually provided using the stolen Medicare ID numbers of deceased patients6) is virtually ignored and goes on today unchecked and unpunished, to the tune of billions of lost healthcare dollars.
It is apparent that Rick Scott and Columbia/HCA were unfortunate enough to be caught up in this witch hunt. Clearly, the majority of alleged fraud that actually involved Scott and Columbia/HCA was not really fraud. Hospital records and other evidence supporting the allegations of fraud were lacking. Still, the government clung to an arbitrary, self-serving belief that hospitals were coding and billing for a higher intensity of care than they had actually provided (upcoding), that hospitals were providing free rent of physician office space in return for patient referrals (kickbacks), and that hospitals were paying physicians for bogus positions in the hospital (bribes), again, to encourage patient referrals to the hospital.3,4
When the government cries “upcoding!”, it means, in the real world, that a bureaucrat decides, years after the fact, and solely on the basis of the submitted claim, that he knows better how sick a particular patient had been, better than those that contemporaneously were in the room with the patient and following his chart carefully. When the government cries “kickback!”, it means that where a physician rents office space from the hospital at $3000 per month, the government believes the hospital might have charged as much as $3200 per month for the space. When the government cries “bribes!”, it means that a physician received a fee from the hospital for providing valuable medical direction services over specific units in the hospital that could not otherwise function.
With the government threatening to prosecute Columbia/HCA, Scott, who was the company CEO, wanted to fight the government, believing the company was innocent. But the Board of Directors did not have any real grasp of the business of providing healthcare services in the minefield of confusing regulations, was thoroughly intimidated by prosecutors, and insisted on settling out of court. Because of the Board's determination to capitulate over his objections, Scott resigned in protest and left the company. Four years after Scott left Columbia/HCA, the company entered into its first settlement agreement with the government.1,5
A great deal has been made, for political attack purposes, of Scott exercising his 5th Amendment right in declining to answer questions regarding the Columbia/HCA investigation. Most have falsely presumed from this that Scott and Columbia/HCA were guilty. However, this is an era of prosecutorial excesses, where prosecutors, when unable to establish guilt of an actual crime, will attempt conviction for “lying”, based on twisting the often innocent testimony of the accused.7 Because of this, the best legal advice is often given, especially for the innocent, to remain silent and refrain from giving prosecutors anything to twist and use against them.
Refusing to provide fodder for prosecutorial excess, without the presumption of guilt for doing so, is a constitutionally guaranteed defense against out-of-control government abuses. In America, we take great pride in our system of justice where the accused is presumed innocent until proven guilty. Yet when an accused individual uses this constitutional defense, and with the government leaking selected and partial “facts” of the case, we are too quick to jump to unwarranted conclusions and premature judgments.
When the awesome power and resources of the government are waged against the individual, the government has a grossly unfair advantage from the start. Complicity by the Lame Stream Media, more interested in sensational claims of wrongdoing and convicting the accused in the press, than in any real evidence, presumption of innocence, or desire for justice, contributes dramatically to the damages done to the individual accused victim. It is a naïve, gullible and culpable populace that willingly accepts, joins and promotes this conspiracy of deception that is so damaging to individual rights and human dignity. When the public falls for this deception, it becomes complicit in the “Statist’s” anti-capitalist scheme to criminalize American business and redistribute American wealth.
Indirect costs to business are incalculable; what little is publicized about direct costs to business is staggering.8 Most of these investigations are dropped after a period of time due to lack of evidence to support the government’s case and do not result in prosecution. Most cases that are prosecuted result in settlement and do not go to trial. Most cases that go to trial end in acquittal, while only a tiny few end in conviction. For the most part, these activities fly under the radar and only a small fraction of the whole scheme, that portion involving significant settlement amounts and high-profile convictions, is publicized.
The cost to the government of investigating and prosecuting pseudo-fraud is carefully hidden, but estimates have been up to twice the amount collected by government in fines and penalties, and possibly in the tens of billions of dollars. All of these costs, including the costs to business that are passed along to the consumer, including the cost of lost productivity and persistent damage to the economy, and including the government costs of pursuing these cases that are paid by the American taxpayer to support the full employment of government attorneys, are paid for out of the pockets of John Q. Public.
In the case of Columbia/HCA, Rick Scott believed he and the company were innocent and he wanted to fight the government. The Columbia/HCA Board, however, was intent upon negotiating a settlement that would minimize company losses in money and reputation, over fighting a lengthy court battle. The Board wanted to put the whole thing behind them and was willing to take its lumps in order to get on with the business of providing healthcare. Contrary to widespread reports that he was forced out of his job for complicity in the alleged fraud, Scott had resigned in disgust at what most corporate types consider to be the Board’s fiscally responsible surrender.2,9
In fact, Columbia/HCA gave Scott a generous $5.1 million severance, a 10 year consulting contract with the company, and stock and options valued at over $300 million.2 While Columbia/HCA did eventually settle with the government for a significant sum, no bonafide evidence of real crime ever surfaced, and the company was never found guilty of any wrongdoing by any court of law.3,9,10 In addition, if there had been the slightest shred of evidence against Scott, the relentless government jackals would have mercilessly torn him to pieces. Instead, no charges were ever justified or brought against Scott in the Columbia/HCA debacle.10 It is absolutely shocking that no report of Scott’s innocence has popped up in any media headlines, and political opponents continue to take advantage of government and media disinformation to condemn Scott unjustly.
1. The Observer Staff. Scott Explains What Happened. The Observer Group, Longboat Key, July 14, 2010. http://www.yourobserver.com/news/longboat-key/Opinion/071420107063/Scott-explains-what-happened
2. PoliticalCorrection. Richard L. Scott: Trials and Tribulations at Columbia/HCA. May 12, 2009, PoliticalCorrection-A Project of Media Matters Action Network, FactCheck. http://politicalcorrection.org/factcheck/200905120006
3. Hiaasen S, Dorschner J, Clark L. Rick Scott and His Role in Columbia/HCA Scandal. The Miami Herald, Florida Politics, June 26, 2010. http://www.miamiherald.com/2010/06/26/1703036_p4/rick-scott-and-his-role-in-columbiahca.html#ixzz0s6Cx7U2E
4. Kleinke JD. Deconstructing the Columbia/HCA Investigation. Health Affairs, Vol. 17, No. 2, March/April 1998. http://content.healthaffairs.org/cgi/reprint/17/2/7.pdf
5. McCollum B. Healthcare Claims Guidance Act HR 3523: Introductory Remarks. Congressional Record, March 19, 1998, p. E434. http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?dbname=1998_record&page=E434&position=all
6. Kennedy K. Mafia, Violent Criminals Turn to Medicare Fraud. Breitbart, Associated Press, October 6, 2009. http://www.breitbart.com/article.php?id=D9B5OKO01
7. Ogden B. Judith Miller Hates Scooter Libby. Freedom Yet Rings, Blogspot, August 29, 2010. http://freedomyetrings.blogspot.com/2010/08/judith-miller-hates-scooter-libby.html
8. Department of Justice. Justice Dept. Civil Fraud Recoveries Total $2.1 Billion For FY 2003: False Claims Act Recoveries Exceed $12 Billion Since 1986. November 10, 2003, U.S. Department of Justice, #03-613. http://www.justice.gov/opa/pr/2003/November/03_civ_613.htm
9. Department of Justice. Largest Health Care Fraud Case in U.S. History Settled: HCA Investigation Nets Record Total of $1.7 Billion. June 26, 2003, U.S. Department of Justice, #03-386. http://www.justice.gov/opa/pr/2003/June/03_civ_386.htm
10. PolitiFactCheckFlorida. Rick Scott, Former Healthcare CEO, Faces Questions About Past. May 18, 2010, St. Petersburg Times – The Miami Herald. http://politifact.com/florida/statements/2010/may/20/alex-sink/rick-scott-healthcare-ceo-faces-questions-a/