While federal authorities look into how Columbia/HCA Healthcare Corp. submits cost reports to Medicare, similar investigations are plaguing two of the company's main competitors but with far less fanfare.
HHS' inspector general's office has been investigating Quorum Health Group, a Brentwood, Tenn.-based hospital management company, since June 1993. That's when, according to Quorum's 10K filings with the Securities and Exchange Commission, the agency charged with enforcing Medicare fraud laws "requested information from the company in connection with an investigation involving the company's procedures for preparing Medicare cost reports."
"What they looked at are Medicare cost reports, which include things like administrative costs," said Shea Davis, a Quorum spokeswoman.
Quorum said it hasn't heard anything from the inspector general's office since the company's most recent 10K was filed last year. The company has reported the investigation for the past three years in its annual 10K.
Quorum disclosed that the U.S. Justice Department joined the investigation in January 1995, issuing a Civil Investigative Demand for documents related to HHS' investigation.
"A CID is the basic pre-complaint discovery tool of the U.S. Department of Justice and is a general discovery subpoena for suspected violations of the false claims act, the racketeering laws and the antitrust laws," said attorney John Cusack with the Chicago office of Gardner, Carton & Douglas.
The company's 10K also said the government interviewed several current and former employees as part of its investigation. Quorum wouldn't disclose who was interviewed.
Meanwhile, Santa Barbara, Calif.-based Tenet Healthcare Corp. disclosed last week that it's setting aside nearly $25 million to cover the estimated settlement of Medicare false claims and illegal kickback investigation of 12 hospitals owned by OrNda HealthCorp.
Tenet inherited the investigation when it acquired OrNda in January. Tenet revealed the probable settlement with HHS' inspector general's office in its third-quarter earnings report released April 10. The $24.9 million set aside to cover the settlement and other unspecified OrNda litigation costs represents 9% of the $272.2 million "merger-related" expenses Tenet incurred from its acquisiton of OrNda.