The Frist FileWas Frist playing doctor when he pushed legislation for medical reform or just lining his pockets? Get background on the accusations of Medicare fraud, conflict of interest and insider trading facing Sen. Bill Frist.
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 [email protected]
| 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:
BiographyCurriculum Vitae of the Honorable William H. Frist
Frist’s Votes Found to Favor HCA InterestsDec. 4, 2005
| The Associated Press reported: “An analysis of Senate Majority Leader Bill Frist’s voting record shows a pattern of supporting bills that benefit HCA Inc., the Nashville-based hospital company that’s been the foundation of the Frist family’s wealth.” more
Investigations Involving Congress Members Nov. 28, 2005 | The Associated Press reports: “Senate Majority Leader Bill Frist, R-Tenn.: The Securities and Exchange Commission and the Justice Department are investigating Frist’s sale of millions of dollars worth of stock in HCA, the Nashville-based hospital chain founded by his father and brother.” more
Documents Contradict Comments on Holdings Oct. 24, 2005 | Jeffrey H. Birnbaum of the Washington Post reports: “Senate Majority Leader Bill Frist (R-Tenn.) was given considerable information about his stake in his family’s hospital company, according to records that are at odds with his past statements that he did not know what was in his stock holdings.” more
Frist Sold Stock Before Price Dropped Sept. 21, 2005 | Jonathan M. Katz reported for the Associated Press: “Senate Majority Leader Bill Frist, a potential presidential candidate in 2008, sold all his stock in his family’s hospital corporation about two weeks before it issued a disappointing earnings report and the price fell nearly 15 percent.” more
Upon Frist’s Senate majority leader nomination: Bad Doctor Jan. 10, 2003 | Doug Ireland of the LA Weekly reported: “While TV gushed last week over the Republicans new Senate majority leader, Bill Frist, intervening in a traffic accident, portraying the former heart surgeon as a ‘Good Samaritan,’ in truth the GOP has simply replaced a racist with a corporate crook.” more
Regarding HCA and Medicare fraud: NewsHour with Jim Lehrer “Doctoring the Books” July 31, 1997 | “Three Columbia/HCA executives were charged with defrauding Medicare programs for more than a decade, underscoring the government’s growing investigation into healthcare fraud. After a backgrounder, Margaret Warner will lead a discussion on Columbia/HCA’s defrauding of medicare.”
Frist’s Senate PageCitizens for Responsibility and Ethics in WashingtonOct. 25, 2005
| Citizens for Responsibility and Ethics in Washington (CREW) has filed the second of two complaints with the Senate Select Committee on Ethics against Sen. William Frist (R-Tenn.). The second complaint alleges that Sen. Frist was well aware that he held HCA stock at a time when he denied any knowledge of such holdings. The complaint points to recent press reports and letters from trustees to Frist as evidence that the senator was aware of his holdings.
Press Release 1st Complaint 2nd Complaint
Listen: SEC Inquiry into Frist Stock Sale Deepens Oct. 13, 2005 | David Welna for NPR’s “All Things Considered”
Watch: NewsHour with Jim Lehrer “Doctoring the Books” July 31, 1997 | “Three Columbia/HCA executives were charged with defrauding medicare programs for more than a decade, underscoring the government’s growing investigation into healthcare fraud. After a backgrounder, Margaret Warner will lead a discussion on Columbia/HCA’s defrauding of Medicare.”Wait, before you go…
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