Columbia/HCA history
Scott started what was first Columbia in the spring of 1987, purchasing two El Paso, Texas, hospitals. He quickly grew the company by purchasing more hospitals. A hospital network created efficiencies. Efficiencies created profits.
In 1994, Scott?s Columbia purchased Tennessee-headquartered HCA and its 100 hospitals, and merged the companies. When Scott resigned as CEO in 1997, Columbia/HCA had grown to more than 340 hospitals, 135 surgery centers and 550 home health locations in 37 states and two foreign countries, Scott?s campaign says. The company employed more than 285,000 people.
Now about Scott?s departure in 1997.
That year, federal agents went public with an investigation into the company, first seizing records from four El Paso-area hospitals and then expanding across the country. In time it became apparent that the investigation focused on whether Columbia/HCA bilked Medicare and Medicaid.
Scott resigned as CEO in July 1997, less than four months after the inquiry became public and before the depth of the investigation became clear. Company executives said had Scott remained CEO, the entire chain could have been in jeopardy.
At issue, Scott says, is that he wanted to fight the federal government accusations. The corporate board of the publicly traded company wanted to settle.
And settle, Columbia/HCA did.
In December 2000, the U.S. Justice Department announced what it called the largest government fraud settlement in U.S. history when Columbia/HCA agreed to pay $840 million in criminal fines and civil damages and penalties.
Among the revelations from the 2000 settlement, which all apply to when Scott was CEO:
* Columbia billed Medicare, Medicaid, and other federal programs for tests that were not necessary or ordered by physicians;
* The company attached false diagnosis codes to patient records to increase reimbursement to the hospitals;
* The company illegally claimed non-reimbursable marketing and advertising costs as community education;
* Columbia billed the government for home health care visits for patients who did not qualify to receive them.
The government settled a second series of similar claims with Columbia/HCA in 2002 for an additional $881 million.
The total fine: $1.7 billion.
Plea deals, fraud
As part of the 2000 settlement, Columbia/HCA agreed to plead guilty to at least 14 corporate felonies. A corporate felony comes with financial penalties but not jail time, since a corporation can?t be sent to prison.
Among the 14 felonies, Columbia/HCA pleaded guilty to three counts of conspiracy to defraud the United States.
Also, four Florida-based Columbia/HCA executives were indicted. Two were convicted of defrauding Medicare in 1999 and were sentenced to prison, only to have those convictions overturned on appeal. A third executive was acquitted and a jury failed to reach a verdict on the fourth.
