Three-quarters of a billion bucks doesn't buy much in the new economy. For Columbia/HCA Healthcare Corp. a tentative $745 million fraud agreement with the U.S. Justice Department to settle fraud allegations hasn't bought complete piece of mind or fully polished a tarnished reputation.
Although some knotty legal problems remain on the table, the company's decision to rename itself HCA-The Healthcare Company (see story, p. 8) is a good move that further distances the current regime from the evil empire built during the reign of Richard Scott.
Ruthless Rick and his healthcare henchmen assembled the biggest and most powerful hospital-based organization in history. Scott, despite his faults, energized the industry and headed down the right track in developing integrated delivery systems. But he and his overzealous pals stepped on far too many toes along the way. Especially miffed were not-for-profit hospital executives who complained that the company played rough and dirty.
By 1997, Columbia had become the government's poster child for healthcare fraud. That led to the downfall of the House of Scott and forever changed the billing practices of Medicare providers.
It was left to Thomas Frist Jr., M.D., and other survivors to restore faith in the downsized, kinder, gentler Columbia. Stringent compliance programs, ethics classes for managers, less aggressive business strategies and other diplomatic acts have marked the post-Scott Columbia. In many ways, the transformation has succeeded even though the fraud cases have developed into the company's albatross.
Apparently settled are the civil fraud allegations involving home health fraud, DRG coding and illegal billing for laboratory services. But left unresolved are blockbuster civil and criminal charges related to Medicare cost reporting and physician referral/kickback charges.
We will assume HCA will work diligently to settle the charges. The contrite, humble approach assumed by company officials since the May 18 settlement offers further evidence that management has learned a valuable, albeit costly, lesson.
It's also encouraging that the Frist team wants the company to become more decentralized, letting individual hospitals make local market-driven decisions. A new name and a settlement make for a good start, but only a start. Management has a long way to go before the past is fully behind it.