With hundreds of millions of dollars at stake and negotiations stalled for months, the U.S. Justice Department and HCA are pursuing steps to go to trial over Medicare cost-reporting allegations against the company.
If a trial takes place, instead of a negotiated settlement, it would be among the biggest healthcare fraud cases yet, with the plaintiffs entitled to seek maximum allowable damages: triple the total alleged fraud and up to $10,000 per claim. Already, a $745 million civil settlement by HCA last year to resolve three other categories of alleged fraud is the highest payment by a provider to date in a healthcare fraud case.
The whistleblowers who filed the cost-reporting suit and the Justice Department, which joined the case, are preparing for a long and costly trial. The whistleblowers are hiring some of the top litigators in the field, sources close to the case said.
The parties in the case agreed to exchange witness disclosures and document requests by Aug. 3, according to the Justice Department's latest monthly status report on its HCA investigations.
The department declined to comment on its legal strategy, the likelihood of a trial or any contents of the status report filed last week with the U.S. District Court in Washington.
The parties have not negotiated on the cost-reporting allegations since April, the status report said.
The government submitted a settlement demand to HCA in April that is rumored to have exceeded the $745 million negotiated last year. HCA reportedly rejected the proposal and submitted counterclaims. It also is preparing for a trial.
"The reality is if you don't (prepare now) you can't do it later," said HCA spokesman Jeffrey Prescott. "Either possibility could pan out, but we're pretty confident we know what a reasonable range (for a financial settlement) will be."
Once a case goes to trial, the stakes increase considerably for all parties, said Stuart Gerson, a healthcare lawyer in the Washington office of Epstein, Becker & Green. HCA's potential financial liability could exceed $1 billion and conviction could result in its exclusion from Medicare and Medicaid.
"No major corporate healthcare fraud case of any consequence has been tried in years . . . because of the worry about exclusion, which is automatic with a criminal conviction but discretionary in a civil case," Gerson said.
Alternatively, the government could win less than it requested in negotiations or lose the case.