If some of the recent allegations of improper Medicare billing by Columbia/HCA Healthcare Corp. sound familiar, they should, especially to a prestigious group of not-for-profit hospitals that were caught doing the same thing several years ago.
While not-for-profit hospitals were allowed to settle their disputes through administrative channels, Columbia executives might be in danger of going to jail.
The discrepancy underscores the wide latitude federal fraud fighters have in going after providers and the different attitude those now running the government's anti-fraud efforts have toward providers whose billing practices step over the line.
In 1992, Rep. John Dingell (D-Mich.), then chairman of the House Energy and Commerce Committee and its subcommittee on oversight and investigations, held a series of hearings that exposed what he deemed a widespread practice of hospitals trying to stick Medicare with the bills for a number of items unrelated to patient care. Expenses hospitals tried to pass through on their Medicare cost reports included concert tickets, alcohol for parties and travel expenses. Other unallowable costs included expenditures on marketing and advertising.
The government's pending fraud investigation of Columbia, which has resulted in three criminal indictments against company executives, has targeted similar expenses recorded by Columbia on its Medicare cost reports.
Dingell's crusade led to an audit of 21 hospitals by HHS' inspector general's office in 1992. The results of the audits, contained in a series of reports, identified some $50.7 million in unallowable costs submitted in 1990 and 1991 by the hospitals, which included many prestigious not-for-profits.
Among them were Massachusetts General Hospital in Boston, Thomas Jefferson University Hospital in Philadelphia and Northwestern Memorial Hospital in Chicago. Aside from the embarrassment the reports caused the hospitals, none suffered any serious legal consequences. A spot check by MODERN HEALTHCARE of a few facilities found no civil or criminal penalties stemming from the audits.
The government's initial audit of Baptist Hospital of Miami found $82,260 in unallowed costs (See chart, p. 2). But a spokeswoman for Baptist said investigators later spent nearly two months combing through hospital records and, in the end, negotiated a settlement that levied no fines or penalties. At deadline, details of the settlement weren't available.
Under federal law, improper Medicare or Medicaid bills can violate a number of statutes, which carry varying penalties. Penalties can range from simple repayment to fines to expulsion or suspension from Medicare and Medicaid to jail time. The most serious penalties are imposed if there is a finding of intent to defraud.
The government's pursuit of abuses has heightened, federal authorities say, as Medicare spending on hospital care has ballooned. U.S. Attorney General Janet Reno has named healthcare fraud her No. 2 priority after violent crime.
"As the monies increase in a system, the chances of fraud occurring increase," said Lynne Battaglia, U.S. attorney for Maryland and former head of Reno's healthcare fraud subcommittee.
Many of the 93 U.S. attorney's offices across the country established task forces devoted to the issue.
One region's workload demonstrates the shift. Michael T. Dyer, HHS' regional inspector general for Illinois, recalled that six years ago a high percentage of his cases focused on Medicare Part B providers, like podiatrists, chiropractors and psychiatrists. Today, his Chicago-based office mainly investigates hospitals and large healthcare companies.
In addition to following its own leads, the U.S. Justice Department's effort is being fed by dozens of new "whistleblower" lawsuits, or private suits filed against government contractors on behalf of the government.
Last year's insurance reform law, commonly called Kassebaum-Kennedy, also created a fund that allocated up to $104 million for the fiscal year that ends Sept. 30 to support healthcare fraud activities.
Charles R. Wilson, U.S. attorney for Florida's middle district, recently added four new attorneys to his Tampa office with his region's share. The middle district spends at least $365,000 on healthcare fraud activities out of a $17 million annual operating budget, he said.
Medicare payments from cost-reimbursed services represent a small percentage of most hospitals' Medicare payments, but it's an issue of "strong interest" to federal prosecutors, said Katie McDermott, assistant U.S. attorney and healthcare coordinator in Baltimore.
Jim Pyles, an attorney with Powers Pyles Sutter & Verville in Washington, said: "I think any health lawyer will tell you we're just in an extraordinarily dangerous time for providers. The pendulum, I think, has swung too far in the direction of giving government agencies power and discretion to attack perceived fraud and abuse."