A special federal judicial panel has ordered all 26 pending civil whistleblower fraud lawsuits against Columbia/HCA Healthcare Corp. to be heard by a federal judge in Washington.
The panel's decision, which has yet to be disclosed publicly by the parties involved, is a major step toward resolving the civil litigation that has held the nation's largest hospital chain hostage since 1997.
The civil litigation is separate from the U.S. Justice Department's ongoing criminal fraud investigation of the Nashville-based company and its executives. That probe so far has resulted in the conviction of two mid-level Columbia executives.
Speculation has been swirling the past few weeks that Columbia might settle with the government in the civil cases sooner rather than later; the panel's decision to consolidate the cases likely will fuel that speculation. Columbia was not available by deadline to comment on a possible timetable for a settlement.
Sources told MODERN HEALTHCARE that on Dec. 1, the Judicial Panel on Multidistrict Litigation granted a joint motion by the Justice Department and Columbia to consolidate the 26 pending civil lawsuits. Seven other lawsuits have been dismissed. The panel heard oral arguments on the joint motion Nov. 19.
In February, the same judicial panel denied an earlier motion to merge the suits, ruling that it didn't have enough information about all the pending cases. In response, the government unsealed several lawsuits and refiled its motion.
With the new order, the cases, which are pending in various federal district courts around the country, can be moved to U.S. District Court in Washington.
There was no deadline for transferring the cases, but sources close to the case said a status conference will be scheduled in January 2000 after federal clerks' offices around the country have transferred the cases to Washington.
Columbia has set aside a $1 billion letter of credit for possible settlements. The lawsuits will also be grouped by the nature of the allegations (Oct. 11, p. 4).
Those common allegations include:
* Fraudulent billing for home-care services.
* Fraudulent Medicare cost reports.
* Illegal compensation and kickback arrangements with referring physicians.
* Fraudulent billing for clinical laboratory services.
* Illegal upcoding on Medicare billing.
Spokespeople from the Justice Department, Columbia and the judicial panel all declined comment on the panel's action, which remains under seal.
Thomas Crane, a lawyer formerly with HHS' inspector general's office and now with Boston-based Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, said judicial economy is driving the move to group the lawsuits.
"Coming up with multiple settlements and corporate integrity agreements is enormously easier for the government and a provider to negotiate one-on-one," said Crane.
Lawyers for the Justice Department and Columbia are based in Washington, which means big savings on travel time and status conferences with multiple judges and U.S. attorneys in different jurisdictions, all of whom might have differing perspectives on settlements.
"All these factors make it compelling to consolidate," Crane said.
But while merging cases might speed resolution, which would help some whistleblowers, it could also weed out other cases and reduce the overall size of a settlement.
"The final amount will probably be less than if all the claims were handled separately," he said. "In the end some whistleblower could lose a few nickels."