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HCA whistleblower renews his claim that Scott knew about fraud

 The accounting whistleblower who helped to uncover the largest Medicare fraud case in U.S. history at the hospital company Gov. Rick Scott started revived his claims Monday that his former boss knew of the widespread fraud and “shouldn't be trusted” to be re-elected.

“There is no doubt in my mind that Rick Scott was the leader of a criminal enterprise,’’ said John Schilling,  a former HCA accountant who worked with the FBI in 1996 through 2003, at a press conference organized by the Charlie Crist campaign.

"I would not want someone who was a leader of a criminal enterprise leading our government."

Schilling, a registered Republican from Collier County, helped to expose the $1.7 billion Medicare fraud at Columbia/HCA that brought down several executives and forced Scott's resignation from the mammoth hospital chain he built.

None of these charges are new, however. Scott was never charged with a crime or fined, and voters were barraged with reports of the charges in 2010 when he narrowly defeated Democrat Alex Sink.  

Scott admitted responsibility for the fraud in a 2010 television ad when he was running in the primary against then-Attorney General Bill McCollum, but the Crist campaign has revived the narrative, claiming it is indicative of a pattern of abuse of the law by Scott.  

The Florida Democratic Party is running national news clips from the period on a web site named The Fraud Files. 

“The McCollum crowd says the hospital company I started was fined by the government the Medicare fraud. Unfortunately that’s true. ’’ Scott said in the 2010 television ad dubbed "Truth" and is available here.  "I was in charge and even questioned by authorities. But that’s not what matters. What matters is that the company made mistakes and as CEO I take responsibility and learn from it.”

Schilling, who won a $100 million judgment with another former HCA official as a result of his whistleblower lawsuit, is now the founding partner of Naples-based Ethics Solutions LLC, a consulting company that specializes in health care fraud investigations and works and supports other whistleblowers with cases similar to his.

“The fraud at Rick Scott’s company hurt seniors, it hurt taxpayers, it hurt everyone,'' Schilling said Monday, as he read from a statement. "It was stealing from the American taxpayers and eroding the Medicare program designed to care for the elderly. “He likes to say he wasn’t questioned but I am a witness and I was an FBI informant. Fraud was in the DNA of Rick Scott’s company from the very beginning and he was the father.”

Schilling said that within six months of being hired in 1993 to be supervisor of reimbursmenet services in the Southwest Florida division in Fort Myers he learned that the company kept two sets of books – one  a cost report, stamped "confidential" for the management and one for the regulators. The first set was never to be shown to Medicaid auditors, he said.

"It resulted in hundreds of millions of dollars of ill-gotten gains for Columbia/HCA,'' he said. After 18 months of trying to "rectify things internally – tried to talk to management, get them to change their practices,'' he said. "I was told to be quiet. I was told our jobs were on the line if this gets out. I did meet some management that did agree with me that this was fraudulent, that they were trying to work with the corporate office but it fell on deaf ears."

He said that instead of making easy changes to the accounting practice, it "mushroomed into a massive civil and criminal health care fraud investigation. I would spend weeks, months, years, side-by-side with the Department of Justice and the FBI."

He was wired to record meetings, covertly taped phone calls, mapped out offices and "provided the FBI investigators with a wealth of operational information about the company." He said his role led to the government's search warrant of 36 Columbia/HCA locations in six states.

"Within weeks, four managers were indicted of criminal healthcare fraud and Rick Scott was ousted from the company,'' he said.

The ultimate settlement led 14 criminal convictions and Columbia/HCA forfeiting $1.7 billion in fines for fraudulent Medicare overpayments. The fraud included "several types of fraud under Rick Scott's leadership,'' he said. The fraud included: cost report fraud, physician kickback fraud, upcoding on inpatient emissions, upcoding on lab procedures and inappropriate lab and in-home visits. 

He said that as a Republican and father of three children "it sickens me that Rick Scott used the money that he reaped from ripping off the seniors to promote himself and, by most accounts, to buy the governor's office."

Schilling left the company in 1995 and sought whistleblower protection. In 1996, the FBI persuaded him to get back into Columbia/HCA so he could serve as an undercover informant.

He said he has no firsthand knowledge that Scott was involved but he believes he was not only aware of the fraudulent practices, he sanctioned them.

“I did not have day-to-day communication with Rick Scott. I had only met him once or twice while I was an employee there,’’ Schilling said.

“I’m basing my belief that he knew what was going on based on that he was as very hands on CEO of the company, that he was very involved in the organization and in communicating with employees. I knew that, working with government investigators, they thought he was a target and that he was orchestrating criminal conduct.”

The Scott campaign would not respond to Schilling’s comments but noted that the event was coordinated by Crist’s campaign and they called it a “desparate attack.”

“As Charlie realizes that no one is buying what he is selling, he is becoming increasingly angry and nasty in his personal attacks on the governor,’’ said Greg Blair, Scott’s communications director.  

Crist spokesman Kevin Cate noted that one year Scott vetoed $1.5 million set aside by Republican legislators to increase health care fraud investigations.  

However, Schilling noted after the press conference that Florida has a weak record when it comes to health care enforcement, even when Crist was governor. 

In 2008, he was retained by the state of Florida to work with an investigator in the Agency for Health Care Administration to investigate fraud at a Trinity Community Hospital in the North Florida Community of Jasper.

Investigators there found misuse of both state and federal Medicaid funds. The hospital was soon closed.

“Even at that time, the enforcement was not real strong and the investigator that I had been working with expressed concern that they do lack enforcment action in this state,” he said. 

Update: A day after he held this press conference, Schilling's name was attached to a fundraising letter. "As someone who's seen what Rick Scott is capable of -- I'm asking you: Chip in $1 or more to support Charlie Crist,'' it reads.