What Is Goin’ On?

We all know our healthcare delivery system is screwed up. Some blame lawyers and lawsuits. Some blame insurance companies. Some blame the unknown and the unknowable. One thing is for sure, there is plenty of blame to go around, but lets not forget the “thief.”

Who is this thief? Those who cheat the government out of precious healthcare funds by submitting fraudulent claims. I am not talking about Aunt Betty who lied to get Medicaid. I am talking about the big boys, the hospitals and healthcare organizations that make Aunt Betty look like a saint. And we should not forget another thief: the government that lets them get away with it through poor or non-existent enforcement. I don’t know which one makes me madder or more disgusted.

In his book “Undercover: How I Went From Company Man to FBI Spy–and Exposed the Worst Healthcare Fraud in U.S. History” author John Schilling tells a story of corporate greed, fraud, and criminal indictments involving Columbia/HCA Hospitals, at the time the largest healthcare provider in America. It is also the story of John Schilling, who discovered the fraud, reported it to his superiors and was forced to become a whistleblower. Many years later, he became a multi-millionaire as a result of his courage and determination.

When he first discovered that his employer, Columbia/HCA, was filing false reports with the government and receiving more than they were entitled to in reimbursement from Medicare/Medicaid, John thought it would be simple to get the error corrected. Just tell your superiors! Well, it did not take long to find out that if he wanted to keep his job, he had better keep his mouth shut. Many employees did. The problem John faced was that if he continued in his job with knowledge of the fraud, he would, in effect, be committing a crime.

The alternative John chose was to contact a lawyer at Phillips & Cohen who represented whistleblowers. Whistleblowers are individuals who report government fraud in return for which they are supposedly protected from retaliation and may be awarded a percentage of any recovery the government may obtain as a result of their reporting the fraud. Believe it or not, the Fraud Claims Act which created the first whistleblower was enacted during Abraham Lincoln’s administration to deal with all the fraud going on in fulfilling government contracts during the Civil War, …er, I mean the War of Northern Agression!

John’s efforts at being a whistleblower turned out to be fairly successfull. The government settled with Columbia/HCA for about $1.7 billion. John and another whistleblower had to share about $100 million (before paying their attorneys and taxes) which left him financially secure. Currently, he owns a consulting company that provides services to whistleblowers and their attorney in gathering the evidence necessary to prove fraud.

Even though John received a fantastic financial reward, when he first stepped out on that limb and put his trust in the law, he did so whether he got a dime, a dollar or nothing. He “did the right thing” not because of financial reward, but because he knew his employer was cheating the taxpayers, you and me and him.

But John’s story will also make you mad. Mad that it takes so long to get these crooks to pay up. Mad that at some point the government settles with the crooks for something less than they are entitled to. Under the law the government can recover 3 times the amount fraudulently taken, plus attorney fees and the costs of the prosecution. In the case of Columibia?HCA, that would have been more than $5 billion. It might have put the big corporation out of business. The government puts people out of business every day for their crimes, but it seems corporations always get a break, after all they are big business and employ thousands. I still don’t like it!

What is even more maddening is the fact that several Columbia/HCA big shots, were indicted, tried and convicted of fraud, only to have the 11th Circuit Court of Appeals (Atlanta) overturn their convictions and set them free. Had that happened with a convicted sex offender, you can hear the uproar, but when it is good old corporate big shots, it is just the way the system works.

One other item of interest. HCA was started by the Frist Family from Tennessee. You know the Frist Family, one of whom was Bill Frist, the former Senator (R-TN) from 1995 - 2007 and Senate Majority Leader 2003 - 2007. Bill’s brother, Thomas, was Chairman of HCA in 1989 when it merged with Columbia Hospitals and became the biggest healthcare provider in the United States. At the time Bill Frist was a doctor. The HCA fortune put him in the Senate in 1995. Old Bill, sold all of his stock for $20 million in 2005–just before a disappointing earnings report. Sounds like insider trading, doesn’t it! That little shenanigan by Frist and other corporate executives got HCA sued. It settled for $20 million.

And to think Frist, not to long ago, was rumored to be a potential presidential candiate in 2008. Heaven help us!