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HCA-The Healthcare Co., the nation's largest for-profit hospital chain, will pay $95.3 million in criminal fines for defrauding federal government health-care programs, bringing its total settlement with the government to more than $840 million--the largest in history, Attorney General Janet Reno said yesterday.

"Health-care fraud impacts every American citizen," Reno said. "When a company defrauds our nation's health-care programs, it takes money out of the pockets of the American taxpayers. It is wrong."

The charges stem from what the Justice Department called a "systematic" conspiracy by the company--known until last May as Columbia/HCA Healthcare Corp.--to defraud Medicare, Medicaid and other public-health programs. Justice said the company submitted fraudulent bills and annual cost reports to the government.

HCA also agreed to plead guilty to paying kickbacks to doctors who steered patients to HCA facilities.

"The government will not tolerate misuse of the reimbursement system for financial gain and will hold responsible parties accountable for their conduct," Reno said.

Thomas F. Frist Jr., HCA's chief executive, who took over in 1997, said in a statement: "Today's action represents one of the last steps needed to put the Columbia investigation behind us and allows us to move forward, maintaining our focus on providing quality patient care."

Frist replaced Richard Scott, who had built the Nashville-based company into the nation's largest hospital chain.

HCA owns about 200 health-care facilities and has 168,000 employees in 26 states, England and Switzerland. It has three facilities in the Washington area: Reston Hospital Center, Fairfax Surgical Center and Dominion Hospital in Falls Church.

HCA's troubles aren't over, however. The plea agreement only resolves HCA's corporate criminal liability. The Justice Department said it can continue to investigate and prosecute any individuals involved in wrongdoing.

"The government can still spend years going after the individuals on this. They're around," said Stephen Meagher, a San Fransisco lawyer who represents John Schilling, one of several former HCA employees who have sued the company. "The FBI people that I've talked to tell me there's no plan to disassemble the investigation."

Under the agreement, which is subject to review by the court, HCA also will pay $745 million to settle civil fraud charges. That settlement was announced in May.

More than $403 million of that total involved allegations of "up coding," the practice of assigning false diagnosis codes to patient records to increase reimbursement to hospitals by government health programs. An additional $106 million of the total was related to home health visits by HCA representatives to patients who did not qualify for them.

At yesterday's news conference, June Gibbs Brown, inspector general of the Department of Health and Human Services, also announced that HCA has agreed to sell a hospital in Miami. The company also agreed to "engage in significant compliance efforts over the next eight years," including independent audits of the company's hospital and laboratory billing procedures.

© 2000 The Washington Post Company