Two former Columbia execs found guilty of Medicare fraud
By KAREN PIHL-CAREY
HHBR Staff Writer
Two of the four Columbia/HCA (Nashville, TN) executives on trial in Tampa, FL, for defrauding the government were found guilty Friday. They face up to five years in prison and a $250,000 fine on each of six counts.
Jay Jarrell, CEO of the company’s Southwest Florida division, buried his head in his hands as he listened to the verdict. He and Robert Whiteside, director of reimbursement, received guilty verdicts on six counts of defrauding Medicare and other government programs of nearly $3 million. They were acquitted on one count of obstructing a Medicare auditor.
The fraud took place at Fawcett Memorial Hospital in Port Charlotte, FL, prosecutors said. The defendants were accused of submitting requests for reimbursement on interest paid on loans. The interest was listed as capital expenses, which are reimbursed at a higher rate than interest costs. A whistleblower told authorities that the four men knew it was incorrect and even suggested offering a Medicare auditor a job to keep her from discovering it. Throughout the trial, defense attorneys maintained that the wrongdoing involved differences of opinion over complicated regulations.
Jarrell and Whiteside are free on bond. Their presentencing hearing is scheduled for Oct. 15. They will remain on the company payroll pending the outcome of an appeal, said a company spokesman.
The two other mid-level executives received better news on Friday. Michael Neeb, who is CFO of the company’s Jacksonville division and was CFO of Fawcett from 1992 to 1994, was acquitted of all charges. The jury was unable to reach a verdict on Carl Lynn Dick, CFO of Columbia’s Central Florida division. Dick was charged with one count of conspiracy. Prosecutors will decide this week whether to retry him.
Wall Street expects that Columbia will pay about $1 billion in fines to the government. The guilty verdicts in Tampa and investigations in Miami, El Paso, TX, and Atlanta have increased the pressure on the company.
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