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Columbia/HCA Sues Former Executive

October 17, 1998

NASHVILLE, Tenn. (AP) _ Columbia/HCA Healthcare Corp., the nation’s largest health care firm, has sued a former executive and several companies, claiming they defrauded the company out of millions of dollars.

Samuel Greco, Columbia’s former vice president for financial operations, hired vendors to provide services for Columbia, which has 330 hospitals in 35 states. In several instances, the vendors then hired other companies to provide the services for a lower price and pocketed the difference, according to the lawsuit filed Thursday in U.S. District Court in Tampa, Fla.

In some cases, the concerns described themselves as partly owned by Columbia, with Greco serving as a director, the suit said. Columbia says it had no ownership stake in any of the companies.

Greco oversaw Columbia’s purchasing program until August 1997, when he resigned in a management shakeup brought on by a federal fraud investigation. Columbia officials said the program allowed it to outpace other hospital companies because it kept down the costs of various materials.

For more than a year, the federal government and at least 11 states have been investigating whether Columbia committed fraud by overcharging Medicare, Medicaid and other government health programs or services.

Last summer, the government indicted four Columbia middle managers in Florida. They are charged with conspiring to defraud the government of $2.8 million by disguising certain Medicare claims to get a higher reimbursement. A trial is expected to begin early next year.

As the financial officer who oversaw expense claims, Greco is considered a potential key witness in the federal case.

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