May 24, 2013
The Frist File
The accusations are Medicare fraud, conflict of interest and insider trading. Bill Frist’s connection to his family’s Hospital Corporation of America (HCA) has landed him in hot water and earned him a subpoena from the U.S. attorney for the Southern District of New York and an investigation by the Securities and Exchange Commission.
HCA Inc., an international chain of hospitals founded in 1968 by Frist’s father, Thomas Frist Sr., and brother, Thomas Frist Jr., is one of the top-10 health care services companies, ranked by sales, according to Yahoo Finance. If you spot something you think we should add, let us know at firstname.lastname@example.org.
MEDICARE FRAUD | As reported by Doug Ireland of LA Weekly, Hospital Corporation of America was the subject of a decade-long federal investigation into suspected criminal fraud involving double bookkeeping and the overbilling of Medicare, Medicaid and Tricare. In 1997, at the pinnacle of a government crackdown on the healthcare industry’s defrauding of Medicare, HCA, then Columbia/HCA, was charged with conspiring to overbill Medicare and Medicaid, the federal healthcare programs for the elderly and the poor, by more than $1.7 million. HCA has since paid a total of $1.7 billion in fines, the largest fraud settlement in U.S. history. Following the settlement, HCA was allowed to continue its Medicare contracts.
CONFLICT OF INTEREST | Frist’s financial disclosure statement this year placed the value of his blind trusts at between $7 million and $25 million, according to The Washington Post. Frist placed his investments in a blind trust when he joined the Senate to avoid the appearance of conflict of interest. However, contrary to Frist’s initial statements, the blind trust provided him with regular updates on the status of his assets, according to the Associated Press.
INSIDER TRADING INVESTIGATIONS | On Sept. 21, 2005, Jonathan Katz of the Associated Press reported that Frist had instructed a trustee managing his assets to sell all of his HCA stock as well as that of his wife and children. All of their shares of HCA stock were sold by July 8, two weeks before HCA issued a disappointing earnings report leading to a 15 % drop in share price. Katz also reported that Frist claimed that the order was given to avoid the appearance of conflict of interest over his participation in healthcare legislation, and that he possessed no nonpublic information when the stock was sold (contrary to correspondence between the trustee and Frist family now on file with the Senate). The U.S. attorney for the Southern District of New York has issued subpoenas to investigate the sale, and the U.S. Securities and Exchange Commission has also issued a subpoena.
FRIST’S FOCUS ON HEALTHCARE | Before Frist was a household name, and before the HCA Medicare fraud scandal broke, he was active for the Bush-Quayle administration and in Tennessee politics. Frist chaired the Tennessee Medicaid Task Force from 1992-1993, the Republican National Committee’s Health Care Coalition’s National Steering Committee and George H.W. Bush-Dan Quayle ‘92, and was deputy director of the Tennessee Bush-Quayle ‘92 campaign.
Frist has held the following special assignments according to his “Spotlight on Healthcare” page:
Frist’s Votes Found to Favor HCA Interests
Investigations Involving Congress Members
Documents Contradict Comments on Holdings
Frist Sold Stock Before Price Dropped
Upon Frist’s Senate majority leader nomination:
Regarding HCA and Medicare fraud:
Citizens for Responsibility and Ethics in Washington
Created on Dec. 7, 2005, last updated on Mar. 5, 2012
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