Primarily known for its acute-care hospital holdings, Columbia/HCA Healthcare Corp. quietly has become one of the country's largest home-care providers in just two years.
Since its first significant home-care acquisition in April 1995, Columbia has built the nation's largest hospital-based home-care company in an effort to attract managed-care contracts and be less dependent on inpatient revenues (Jan. 27, p. 41).
Among all home-care providers, Columbia ranks third behind Melville, N.Y.-based Olsten Health Services and Costa Mesa, Calif.-based Apria Healthcare Group.
Columbia Homecare Group, based in Dallas, now manages more than 570 home-care locations in 36 states and brought in more than $1 billion in 1996 revenues.
More than half of Columbia's home-care operations are located in the seven states targeted by federal investigators last week. Columbia provides home care through 124 sites in Florida, 97 in Texas, 30 in Tennessee, 28 in Georgia, 20 in Oklahoma, 19 in Utah and four in North Carolina, according to SMG Marketing Group, a Chicago-based healthcare information and marketing consulting firm.
In last week's raid, federal agents served 20 of their 35 search warrants at Columbia facilities and offices in Florida, including some at certain sites Olsten manages for Columbia. Olsten said federal agents also have served its Atlanta headquarters with a subpoena requesting certain documents related to Columbia's home-care operations.
Home-care consultant Kevin O'Donnell, president of Dallas-based Healthcare Resources of America, said the government now may be targeting the larger proprietary chains.
Olsten confirmed last week that it had been notified the U.S. Justice Department had joined HHS in an ongoing inquiry of its own preparation of Medicare cost reports.
"If HCFA finds something wrong with the larger companies, then the catch is obviously bigger and it's politically easier to go after a big player," O'Donnell said.
O'Donnell said investigators likely are looking for a pattern showing the company misallocated overhead costs, inappropriately billed Medicare or had improper incentives for physician referrals.
Columbia's tactics have drawn fire from competitors in Texas, where in January 1996 two home-care agencies sued the company. The agencies alleged Columbia funneled its hospital patients to its own home-care services even when patients voiced a preference for another provider (March 31, p. 11).