Columbia/HCA subsidiaries plead guilty to Medicare fraud, pay $840 million criminal and civil penalties; 8-year Corporate Integrity Agreement imposed

On December 14, 2000, two subsidiaries of HCA - The Healthcare Company (formerly Columbia/HCA) — Columbia Management Companies, Inc. and Columbia Homecare Group, Inc. — agreed to plead guilty to criminal charges including cost-report fraud, false Medicare billing for home health and wound-care services, improper pneumonia-claim billing, and kickbacks to physicians. The combined criminal-and-civil settlement announced that day totaled $840 million: $95,336,432 in criminal fines and $745 million (plus 6.5% simple interest from May 18, 2000) in civil damages and penalties to the United States and the states. As part of the resolution, HCA and the HHS Office of Inspector General executed a Corporate Integrity Agreement (CIA) described by DOJ as running for an eight-year term with “audit and other compliance provisions that are unprecedented in their scope and level of detail” — including independent audits of coding and billing practices, board-level compliance oversight, and mandatory self-reporting of overpayments.

Admission vs. non-admission, precisely stated: the criminal plea by the two named subsidiaries is an admission of guilt to specific charged conduct. The accompanying $745 million civil settlement, by contrast, resolved civil False Claims Act liability without an admission of wrongdoing — standard civil-settlement structure. This December 2000 action did not resolve the full nationwide investigation: DOJ’s own March 2001 civil complaints (case captions naming HCA-The Healthcare Company, Columbia Hospital Corporation, Curative Health Services, and Cedars Medical Center) explicitly targeted fraud allegations “that HCA did not settle with the December agreement,” and the matter was not finally closed until the June 26, 2003 settlement (see companion entry). The often-repeated “$1.7 billion total” figure for the HCA fraud settlements is the SUM of at least three distinct, separately dated actions (Dec 2000 criminal+civil $840M; June 2003 civil $631M; a related CMS administrative settlement of $250M) plus earlier smaller and later separate settlements (e.g., a 1998 cost-report suit and a 1999 $1.25M North Carolina matter explicitly described by DOJ as “unrelated” to the main investigation) — not one settlement event. Citing “$1.7 billion” without specifying which action(s) and which date(s) collapses distinct legal actions into a single figure.