Four Columbia/HCA Healthcare Corp. executives pleaded not guilty to fraud charges in a new indictment last week, while federal prosecutors accused the company of buying the executives' silence.
Assistant U.S. Attorney Kathleen Haley alleged in documents filed in U.S. District Court in Fort Myers, Fla., that Columbia would pay the executives' legal fees only if they maintained their innocence. The four, who are on administrative leave, are charged with defrauding federal health programs including Medicare.
Haley said the four were required by Columbia to sign a letter saying they didn't believe they broke the law and would promise to reimburse the company for legal fees if they admitted they did.
"The relationship between the third-party fee provider (Columbia) and the defendants not only creates an additional, actual conflict of interest, but is tantamount to a monumental form of financial coercion, which potentially interferes with a defendant's right to tell the truth, admit guilt and seek leniency," Haley writes.
The government wants the court to stop the company from paying the defendants' legal fees.
Columbia spokesman Jeff Prescott says the company agreed to pay legal fees because the alleged wrongdoings happened while the four were working for Columbia. He said that the innocence restriction is tied to Delaware law, under which Columbia is incorporated.
No date has been set for the executives' trial.
Haley's allegations come two weeks after federal prosecutors added two more charges to a five-count indictment against three of the executives. Federal prosecutors also added a fourth executive, Carl Lynn Dick, now finance director of Columbia's Eastern Florida division, charging him with one count of conspiracy to defraud federal health programs. The other three are charged with all seven counts. They are Jay Jarrell, chief executive officer Southwest Florida division; Michael Neeb, chief financial officer for the North Florida division; and Robert Whiteside, director of reimbursement at Columbia's Nashville headquarters.