Columbia trial off to slow start as a former executive testifies
By KAREN PIHL-CAREY
HHBR Staff Writer
The trial for four mid-level executives of Columbia/HCA Healthcare Corp. (Nashville, TN), being held in Tampa, FL, crept along so slowly last week that the judge excused one juror for complaining about it and warned the attorneys to pick up the pace.
A friend of the juror testified before U.S. District Judge Susan Bucklew that the juror had complained outside court that the case was dragging on. The juror had said that her boss was upset that the case might take two months and that the proceedings were so boring she wanted to get up and yell at the attorneys that they were wasting her time, reported the St. Petersburg Times. Bucklew excused the juror, who was told repeatedly not to discuss the case outside of court, then suggested the lawyers on both sides heed the juror’s complaint.
Perhaps the most interesting testimony reported so far involves that of William Steve Dudley, the former director of reimbursement for hospitals now belonging to Columbia. He left the company in 1992. In exchange for immunity, Dudley testified last week that his former supervisors, Jay Jarrell and Carl Lynn Dick, encouraged him to submit false cost reports to Medicare. Jarrell, Dick, Michael Neeb, and Robert Whiteside are the four men accused of cheating government programs out of almost $3 million in reimbursements.
Dudley testified that his research on a $14 million loan showed that only part of the money was borrowed to finance capital projects, meaning that only part of the money about 39% was reimbursable. Jarrell thought that 100% of the interest on the loan should be classified as a capital expense and reimbursable, Dudley testified. Jarrell’s attorney, Peter George, argued that it was only a difference of opinion over complex billing rules, reported the Fort Worth Star-Telegram.
But Dudley said he knew, and Dick and Jarrell knew, they were submitting false cost reports to Medicare, reported the Times.
"You knew you had lied to Medicare auditors?" George asked Dudley.
"Yes, sir. With the knowledge of my bosses, we had," Dudley answered.
Dudley said he didn’t stand up to his supervisors because he worried about losing his job.
Despite the trial, Columbia is seeing new life with stock up 60% and the spin-offs of two hospital groups. The spin-off of the 61 hospitals to Lifepoint Hospitals (Nashville, TN) and Triad Hospitals (Dallas) completes the company’s restructuring effort that has reduced its number of hospitals from 340 to about 225.
But the company still faces the uncertainty of costs associated with settling government allegations and dealing with more than 50 lawsuits filed by shareholders and whistleblowers.
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