Florida hospitals’ role in the Columbia/HCA ripoff

Jun 28, 2010

The Miami Herald
Publishedon Sun, Jun. 27, 2010

Whistle-blowers exposed illegal padding of Medicare costs — and reaped tens of millions in rewards from the government.


From improper billing of Medicare to paying doctors to get patients, South Florida cases played key roles in federal findings of fraud at Columbia/HCA, where Florida gubernatorial candidate Rick Scott served as CEO.

In Fort Lauderdale, Michael Marine, a manager specializing in reimbursement, filed a whistle-blower lawsuit in 1997 saying Columbia/HCA had improperly made more than $10 million in South Florida by shifting costs between its hospitals and home health agencies through a contractor, Olsten Kimberly.

At issue: the way that hospitals filed Medicare cost reports, which detail hospital overhead that the federal government pays for in addition to direct patient care. Marine charged that managers, often motivated by their quest for big bonuses, artificially shifted Olsten Kimberly expenses to get the most money out of Medicare.

“This was their dirty little secret,” said Marine in a phone interview. In 1997, he said, he was forced to resign.

In another South Florida case, the federal government filed criminal complaints charging that a Columbia/HCA subsidiary and Kimberly Home Health Care conspired to sell three home agencies in South Florida in 1994 at below-market prices to Columbia Homecare Group with the understanding that hospital chain would then hire Kimberly to manage the facilities so Medicare costs could be padded. Both companies pleaded guilty and paid fines.

Inflated Medicare charges in South Florida also arose in the HCA investigation. A New York Times billing analysis of Columbia/HCA in 1997 found that the chain’s Cedars Medical Center in Miami claimed to Medicare that 93 percent of its respiratory cases were the most severe types — meaning higher payments. Across the street at Jackson Memorial, only 28 percent were rated most severe.

In 1992, before Columbia took over Cedars, 31 percent of respiratory cases were ranked at the top for charges — a percentage that tripled over the next three years under chain ownership, the Times reported.

On Miami Beach, another whistle-blower issue started in May 1997 — after the first FBI raid of Columbia/HCA facilities in March. Ana De Paola Mroz, a nurse-manager at a Columbia/HCA hospital in El Paso hospital, was transferred to Miami Heart Institute and told to set up physicians with free office space and pay as medical directors, according to court documents.

Mroz wrote a memo to hospital leaders that the arrangement might violate the kickback statutes. Three days later, her boss ordered her to erase the memo from her computer because he didn’t want to leave a “paper trail,” court records said. Mroz quit and filed her own whistle-blower lawsuit.

The Justice Department later accused Columbia/HCA of making $7.9 million in illegal payments to 82 doctors at five South Florida hospitals leading to $51 million in Medicare business, court records show.

Eventually, the company settled all the charges in agreements with the government in 2000 and 2003. As one condition of its guilty pleas, Columbia/HCA agreed to sell Deering Hospital in South Dade. The facility is now known as Jackson South.

The two top whistle-blowers in the case got up to $50 million. Others received less — sometimes much less. “I got less than $200,000,” said Marine. “It really wasn’t worth it . . . I got blacklisted by those guys.” He said he hasn’t been able to find work in healthcare. He’s now an accountant for an aviation company.

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