Wall Street Journal: HCA seems worried about remaining liability for Medicare fraud

Details of fraud and potential $2 billion liability laid out in court documents

Feb. 27, 2002 — The Wall Street Journal reported today in its "Heard on the Street" column that an HCA effort to stop depositions of its employees "suggests that the company is more worried about its remaining Medicare-fraud liability than previously thought."

That liability, for Medicare cost-report fraud, could be as high as $2 billion, according to Phillips & Cohen LLP, which represents the whistleblowers in the "qui tam" case.

"The fraud claims that we have filed combined with the government's claims total $660 million, and that number is growing," says attorney John R. Phillips of Phillips & Cohen.

Under the False Claims Act, companies that defraud the government could be liable for as much as three times the government's losses plus $5,000 to $10,000 for each false claim.

HCA filed a motion with the court to stop employee depositions in the case after the company controller had been deposed. "You know what that says to me," James Moorman, president of the nonprofit Taxpayers Against Fraud, told the Journal. "All of a sudden they woke up that they've got a real problem, and they panicked."

Five other law firms have joined Phillips & Cohen to help the government litigate the case against HCA: Heller Ehrman White & McCauliffe; Boies Schiller & Flexner LLP; Hennigan, Bennett & Dorman; Irell & Manella; and James, Hoyer, Newcomer & Simljanich.

For the Justice Department brief on HCA's motion, please click here. The pdf file can be read using Adobe Acrobat (2.48MB).