Department of Justice Seal



TUESDAY, MAY 25, 1999

(202) 514-2007


TDD (202) 514-1888


WASHINGTON, D.C. -- The Department of Justice announced today that it has intervened in a lawsuit filed against Columbia/HCA Healthcare Corporation in El Paso, Texas, under the False Claims Act.

According to Acting Assistant Attorney General David W. Ogden of the Civil Division and U.S. Attorney for the Western District of Texas James W. Blagg, the suit was filed by a former employee of Columbia in El Paso and alleges that Columbia paid kickbacks for patient referrals, upcoded claims for reimbursement from federal health care programs, and shifted costs on its Medicare cost reports.

According to the complaint filed by the former employee, in an effort to maximize referrals from physicians, Columbia in El Paso gave physicians investment opportunities in the hospital, medical directorships and multiple other benefits such as free or reduced rent and travel in order to induce referrals. The complaint also alleges that the El Paso hospitals shifted costs and provided fraudulent cost reports. The complaint also alleges that treatments were improperly coded to increase reimbursements paid by the United States.

In addition, the complaint alleges that Columbia Medical Center West in El Paso prepared false reports in connection with the accreditation process conducted by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). A hospital which is not accredited by JCAHO may be ineligible to receive reimbursement under Medicare and other federal provider programs. The complaint alleges that hospital officials directed the relator to falsify documents in order to survive a May 1992 review by JCAHO. The United States declined to intervene as to that allegation, and the relator and Columbia are litigating that claim.

Under the False Claims Act, those who file false claims against the federal government are subject to three times the damages caused and penalties of $5,000 to $10,000 per violation. Under certain circumstances, the whistleblower is entitled to a portion of the government's recoveries.

The lawsuit is filed in the Western District of Texas as United States ex rel. Ortega v. Columbia/HCA Healthcare Corp., No. EP-95-CA-25.