Columbia/HCA Healthcare Corp. tried without success to get the federal government to disclose details about a reported probe into allegations the company has engaged in "upcoding" practices, its top executive revealed at the company's annual shareholders meeting last week.
Richard Scott, Columbia chairman and chief executive officer, said his company inquired about statements made by HCFA Administrator Bruce Vladeck that the Nashville-based firm was being investigated for possible upcoding, or inflating the severity of patient illnesses to gain higher Medicare or Medicaid reimbursements.
"We pursued it, and we did not find out" the nature of the investigation, Scott said after the shareholders meeting.
During the meeting, which was marked by protests and heavy security, Scott was pressed by shareholders for any knowledge he had about a March 19 raid by federal agents at the company's El Paso, Texas, operations. Search warrants have remained sealed under a court order since the raid.
Scott said the company's lawyers have advised him not to discuss the El Paso situation or any negotiations the company may be having with the federal government.
"If anybody did anything wrong, we will correct it," Scott said.
Most questions raised at the shareholders meeting came from about a half-dozen Columbia critics from the Service Employees International Union and Infact, a Boston-based watchdog group.
Fourteen security guards and two bomb-sniffing dogs patrolled an area in and around a ballroom at the mammoth Opryland Hotel. About a mile away, a protest including Infact and the SEIU decried Columbia business practices that include employment of nearly 100 state lobbyists across the country.
Inside the meeting, upset shareholders demanded more information about the El Paso investigation and lambasted the company for allowing its funds to be invested in tobacco companies.
Columbia said investments in tobacco companies would represent four-tenths of a percent of the company's employee pension plan. Scott said the investment advisers can't tie social concerns to investment decisions.
"The investment advisers' job is to get the best return for employees," Scott said in an interview after the meeting. "I don't own any tobacco stocks."
Shareholders dealt Columbia management a blow by voting to rescind a "poison pill" measure, which sets up barriers intended to protect the company from takeover. The measure was adopted four years ago by the company.
In other Columbia news last week, the company said it will acquire a majority interest in America's Health Network, a 24-hour cable channel owned by Dallas-based A.H. Belo Corp. Terms of the agreement weren't disclosed.
Scott said the healthcare cable network, which reaches about 6 million viewers, wouldn't carry the Columbia name but would be part of the company's effort to offer more health information to consumers.