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Monday, Jun 18, 2018
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Dems may revive HCA fraud case against Scott

The Florida Democratic Party and likely Democratic nominee for governor Charlie Crist are seeking to revive the Medicare fraud case against the hospital chain once run by Rick Scott as an issue in the 2014 governor’s race.

But it’s an open question whether the issue will work any better this year than it did in 2010, when Democrat Alex Sink raised it repeatedly in a losing campaign.

“2010 was a different year, a different election; there were a lot of different things going on,” state Democratic Party executive director Scott Arce­neaux said in a conference call with reporters Monday. “But it was an avenue for us that worked. We think that voters just need to be reminded. In the 3½ years since then, they haven’t grown to trust this governor.”

The party held the conference call to announce a new web ad intended to remind voters that Columbia/HCA, the hospital chain built by Scott into the nation’s largest, pleaded guilty to widespread Medicare fraud in 2000 and ultimately paid fines totaling $1.7 billion — at the time, the largest fine for health care fraud in U.S. history.

Crist has made the Medicare fraud charges a feature of his stump speeches, calling Scott “a fraud” and saying fraud characterizes Scott’s business and political dealings.

The ad is based largely on a Scott deposition in 2000 in which he repeatedly cited his Fifth Amendment constitutional rights against self-incrimination in refusing to answer questions in a civil case linked to the Medicare fraud case.

“Seventy-five,” says the ad. “That’s now many times Rick Scott took the Fifth to avoid incriminating himself while his company was under investigation by the FBI.

“Scott’s company pled guilty, fined nearly $2 billion for Medicare fraud. Taxpayers got cheated, while he walked away with millions.”

Scott was forced to resign as CEO of the company in 1997 but told reporters he got a severance package of $10 million, a consulting contract worth $5 million and $300 million worth of stock.

Among the findings of the investigation into the case were that HCA hospitals “upcoded” treatments, meaning they billed for similar but more costly procedures than those actually performed; shifted costs including salaries and administrative expenses from other areas onto Medicaid and Medicare treatments to inflate its billings; paid kickbacks to doctors for patient referrals; billed the government for costs including sports tickets, meals and country club dues, and billed for treatments and drugs that weren’t covered.

Scott said during the 2010 campaign that he wanted to fight the charges in court but that the company forced him to resign and settled with the government.

“Mistakes were made at the company, and as CEO I have to accept responsibility for those mistakes, and I do,” he said in 2010. He attributed those mistakes to subordinates and said he should have had more auditors and closer oversight.

In response to the Democrats’ new ad, the state Republican Party referred to a new web ad faulting Crist on a variety of issues.

The GOP ad criticizes Crist over college tuition, his support of President Obama’s Affordable Care Act and increases in auto registration and other fees.

After a 2010 campaign in which the fraud case was the Democrats’ biggest single issue against Scott, Scott won narrowly over Democrat Alex Sink, with a margin of 1.2 percentage points.

Asked after a recent appearance in St. Petersburg why he thinks the issue will have a different effect than in 2010, Crist said, “I’m going to talk about it more.”

He also said not everyone knows about the case. Some “very intelligent voters” are unaware of Scott’s use of the Fifth Amendment, he said.

Arceneaux said this election will be different because, “The tea party bubble has long since burst and we are seeing that all over the country, not just in Florida. Second, Democratic grassroots are fired up and energized to beat Rick Scott in a way they just weren’t in 2010.”

Scott “is not the unknown tea party outsider any longer. He has to actually run on his record and who he really is,” Arce­neaux said.

Sink said the party should use the issue again, calling it “very appropriate to remind voters of his record.’’

The ad is correct in saying Scott pleaded the Fifth Amendment 75 times in a deposition “while his company was under investigation” in 2000, but doesn’t mention that the deposition wasn’t about the fraud investigation that eventually led to the big fines. It was in a civil case with a company accusing Columbia/HCA of breach of contract, although lawyers for that company alleged the breach was related to the fraud.

Scott pleaded the Fifth Amendment 75 times because his lawyer had advised him not to answer any questions at all while the federal investigation was proceeding. He even refused to say whether he worked for Columbia/HCA.

Some questions did relate to the fraud investigation, as when the opposing lawyer asked Scott whether the company’s actions were “designed to cover up or obfuscate Columbia’s improper billing practices.”

In a televised debate during the 2010 campaign, Scott said he pleaded the Fifth Amendment because the opposing lawyers were on “a fishing expedition.”

But critics said even that would be illegal because the Fifth Amendment is legally intended to be used only by those with an actual fear of self-incrimination.

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