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Execs Guilty of Insurance Fraud

July 2, 1999

TAMPA, Fla. (AP) _ Two executives with Columbia/HCA Healthcare Corp. were found guilty Friday of defrauding Medicare and other government insurance programs of nearly $3 million.

The jury acquitted another executive and could not reach a verdict on a fourth defendant.

Jay Jarrell and Robert Whiteside, both executives of the nation’s largest hospital chain, were found guilty of conspiring to defraud and defrauding the tax-supported health-insurance programs. Michael Neeb was acquitted.

The jury could not reach a verdict on Carl Lynn Dick, who was accused of conspiring to defraud Medicare, Medicaid and CHAMPUS, which is medical insurance for the military.

Jarrell and Whiteside were found guilty of six of seven counts.

The criminal case resulted from a six-state investigation of Nashville-based Columbia/HCA facilities and its involvement in the tax-supported health programs.

FBI officials have said the Medicare fraud case is the largest health care investigation in terms of scope and amount of money at stake.

The jurors, who listened to seven weeks of testimony, deliberated four days.

The panel of eight men and four women, which wasn’t sequestered, had to decide whether the executives improperly categorized interest payments on reimbursement requests for Fawcett Memorial Hospital in Port Charlotte, Fla.

Prosecutors said the requests were not supported by the hospital’s books and records, and resulted in $2.97 million in overpayments. The executives allegedly knew Medicare auditors who approved the capital categorization were mistaken.

``The defendants found (the mistakes), recognized them and exploited them ... to the tune of $3 million belonging to the United States of America,″ Assistant U.S. Attorney Robert Mosakowski said.

The defendants testified that they believed the payment requests were accurate, and their attorneys categorized the dispute as a difference in opinion about complicated Medicare regulations.

``These rules are not black and white. That’s why this is not a criminal case. Reasonable people can disagree,″ said Jarrell’s attorney, Peter George.

The government’s key witnesses were alleged co-conspirators testifying under immunity.

Among them was John Schilling, a former reimbursements supervisor who also stands to gain millions from a whisteblower lawsuit against Columbia/HCA.

He testified Jarrell suggested offering a Medicare auditor a job with Columbia/HCA to keep her from discovering the overpayments.

William Steve Dudley, a former accountant for a company eventually acquired by Columbia/HCA, testified Neeb, Jarrell and Whiteside encouraged him to bilk Medicare after he told them their actions were illegal.

Dudley acknowledged on the stand that he filed false reimbursement requests to the government, forged a document and lied before a grand jury. He admitted that he falsely told a grand jury Dick had instructed him to forge the form.

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