Make us your home page

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

PolitiFact Florida | St. Petersburg Times
Sorting out the truth in state politics

Scott's political opponents correct: His former hospital company committed fraud

Rick Scott's opponents for governor are telling reporters to essentially brush off a new poll that shows the former Columbia/HCA hospital CEO beating both Attorney General Bill McCollum in the Republican primary and Chief Financial Officer Alex Sink in a hypothetical November matchup.

Focus on the fraud, they say. The fraud. The fraud.

"Rick Scott has spent $15 million in half as many weeks to fund his public image repair squad's pricey and misleading paid media campaign," McCollum spokesman Kristy Campbell said Thursday. "It's no surprise he has skyrocketed in the polls since Floridians are just beginning to learn about his questionable past. His lead will evaporate when Floridians learn Rick Scott oversaw the most massive Medicare fraud scheme in American history."

Democrats added their own e-mail, titled "Fraud is not a mistake," and a 2-minute, 40-second Web video called "Slick Rick."

"Rick Scott may think that his millions of dollars will allow him to avoid answering hard questions about his record as CEO of Columbia/HCA . . . but with your help we will make sure he is held accountable," said the Florida Democratic Party's Eric Jotkoff.

PolitiFact Florida had to bite. Here we'll focus on whether Scott's old company, Columbia/HCA, committed fraud and also explain Scott's role with the company, his part in a federal investigation and the outcomes of the federal inquiry.

To borrow a line from Scott's television ads, let's get to work.

Columbia/HCA history

Scott started what was first named Columbia in the spring of 1987, purchasing two El Paso, Texas, hospitals. He quickly expanded the company by purchasing more hospitals. A hospital network created efficiencies. Efficiencies created profits.

In 1994, Scott's Columbia purchased Tennessee-headquartered HCA and its 100 hospitals and merged the companies. When Scott resigned as CEO in 1997, Columbia/HCA had grown to more than 340 hospitals, 135 surgery centers and 550 home health locations in 37 states and two foreign countries, Scott's campaign says. The company employed more than 285,000 people.

Now about Scott's departure in 1997.

That year, federal agents went public with an investigation into the company, first seizing records from four El Paso-area hospitals and then expanding across the country. In time it became apparent that the investigation focused on whether Columbia/HCA bilked Medicare and Medicaid.

Scott resigned as CEO in July 1997, less than four months after the inquiry became public and before the depth of the investigation became clear. Company executives said had Scott remained CEO, the entire chain could have been in jeopardy.

At issue, Scott says, is that he wanted to fight the federal accusations. The corporate board of the publicly traded company wanted to settle.

And settle Columbia/HCA did.

In December 2000, the U.S. Justice Department announced what it called the largest government fraud settlement in U.S. history when Columbia/HCA agreed to pay $840 million in criminal fines and civil damages and penalties.

Among the revelations from the 2000 settlement, which all apply to when Scott was CEO:

• Columbia billed Medicare, Medicaid and other federal programs for tests that were not necessary or ordered by physicians.

• The company attached false diagnosis codes to patient records to increase reimbursement to the hospitals.

• The company illegally claimed nonreimbursable marketing and advertising costs as community education.

• Columbia billed the government for home health care visits for patients who did not qualify to receive them.

The government settled a second series of similar claims with Columbia/HCA in 2002 for an additional $881 million.

The total fine: $1.7 billion.

Plea deals, fraud

As part of the 2000 settlement, Columbia/HCA agreed to plead guilty to at least 14 corporate felonies. A corporate felony comes with financial penalties but not jail time, since a corporation can't be sent to prison.

Among the 14 felonies, Columbia/HCA pleaded guilty to three counts of conspiracy to defraud the United States.

Also, four Florida-based Columbia/HCA executives were indicted. Two were convicted of defrauding Medicare in 1999 and were sentenced to prison, only to have those convictions overturned on appeal. A third executive was acquitted and a jury failed to reach a verdict on the fourth.

Was Scott close to going to prison for his part in the case?

It appears not at all.

The former CEO was never indicted and was never questioned in the case, he says. He may have been a target of the investigation — an ABC News report from 1997 says he was — but that never translated into charges.

Sorting it out

Let's boil this down.

Was Scott running Columbia/HCA when it found itself at the center of a massive federal investigation? Yes.

Did the company pay a record $1.7 billion in government penalties and fines? Yes, Columbia/HCA paid.

And as we checked in this item, did his former company commit fraud? Yes, it pleaded guilty to fraud charges.

Of course, the million-dollar question is how much of the blame ultimately falls on Scott? And that's an answer we can't provide.

Scott was in charge so he bears some responsibility and has said so. But there has yet to come to light any detail of how much he knew, and when he knew it.

Though that won't keep us from looking.

Aaron Sharockman can be reached at

The statement

Rick Scott's former health care company, Columbia/HCA, committed "fraud."

Bill McCollum, Thursday in a statement from his gubernatorial campaign

The ruling

Scott's company, Columbia/HCA, settled a federal investigation in 2000 by pleading guilty to 14 corporate felonies, including three counts of fraud. The company also paid fines and penalties totaling $1.7 billion. We rule this statement True.

Scott's political opponents correct: His former hospital company committed fraud 06/10/10 [Last modified: Thursday, June 10, 2010 10:46pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Forecast: Rain, heat prevails for Tampa Bay through weekend as tropics gear up


    The summertime pattern of mid- to late-day showers and scorching temperatures will persist across Tampa Bay on Friday and throughout the weekend.

    Tampa Bay's 7 day forecast. [WTSP]
  2. Is Bucs kicker Nick Folk a significant upgrade over Roberto Aguayo?


    Bucs head coach Dirk Koetter made it clear.

    Bucs kicker Nick Folk is entering his 11th NFL season. He spent three seasons with the Cowboys and seven with the Jets. [LOREN ELLIOTT  |  Times]
  3. Florida education news: Student discipline, online learning, solar eclipse glasses and more


    STUDENT DISCIPLINE: Everyone wants their child to behave in school. But sometimes defining what that means causes dissention. That was the case this week at a Pasco County elementary school, which A Pasco County elementary school has adopted a new behavior model that encourages cooperation and responsibility. Some parents are upset that it also seems to support giving in to peer pressure.

  4. Pinellas wants to see impact of tourism bucks spent on big events

    Local Government

    CLEARWATER –– Pinellas County relies on more than just beaches to attract visitors. County government also spends millions to help sponsor big-name events to draw even more tourists.

    The Pinellas County Tourist Development Council awareded up to $250,000 to help sponsor the 2018 Firestone Grand Prix of St. Petersburg. [CHRIS URSO   |   Times]
  5. Zephyrhills begins residential lien forgiveness program

    Local Government

    ZEPHYRHILLS — A new program is under way to forgive liens on certain residential properties in the city to combat blight, encourage improvements to properties and spur home ownership.

    City Manager Steve Spina said after the council’s unanimous vote, the new lien forgiveness program is up and running.