Names In the News

HCA Cops a Plea

HCA-The Healthcare Company (formerly known as Columbia-HCA), the largest for-profit hospital chain in the United States, agreed in December to plead guilty to criminal conduct and pay more than $840 million in criminal fines, civil penalties and damages for alleged unlawful billing practices. Under the agreement, HCA will pay a total of $745 million to resolve five allegations regarding the manner in which it bills the U.S. government and the states for health care costs.

The agreement does not resolve allegations that HCA unlawfully charged for the costs of running its hospitals on cost reports submitted to the government, and that it paid kickbacks to physicians to get Medicare and Medicaid patients referred to its facilities.

As part of the $745 million, the settlement requires HCA to pay:

• More than $95 million to resolve civil claims arising from the company's outpatient laboratory billing practices, which included billing to Medicare, Medicaid, the Defense Department's TRICARE health care program, and the Federal Employees' Health Benefits Program, for lab tests that were not medically necessary, not ordered by physicians, as well as other billing violations;
• More than $403 million to resolve civil claims arising from "upcoding," where false diagnosis codes were assigned to patient records in order to increase reimbursement to the hospitals by Medicare, Medicaid, TRICARE and the Federal Employees' Health Benefits Program. The guilty plea includes one count relating to this upcoding practice; and
• $50 million to resolve civil claims that the company illegally claimed non-reimbursable marketing and advertising costs it disguised as community education. Medicare reimburses providers for "community education" - costs to educate the community at large about public health issues - but not for advertising and marketing a hospital's services.

Censorship: A Bitter Pill

Bowing to recent pressure from Johnson & Johnson, a major pharmaceutical advertiser, USA Network cancelled the production of a television movie about two highly publicized drug-tampering deaths, the Los Angeles Times reported in December.

The cable network abruptly pulled the plug on "Who Killed Sue Snow?" on Thanksgiving eve, five days before filming was to begin in Vancouver, Canada. The movie was based on the 1986 deaths of two Seattle-area residents who took cyanide-laced Excedrin.

The action by USA followed objections by Johnson & Johnson, whose subsidiary manufactures Tylenol. The company threatened to pull all advertising at the network and enlist other pharmaceutical manufacturers to do the same, the paper reported.

The sources said Johnson & Johnson wanted to avoid any reminder of seven unsolved Chicago-area deaths in 1982 from cyanide-tainted Extra Strength Tylenol.

It is unclear what pressure, if any, was exerted on USA by Bristol-Myers Squibb, the maker of Excedrin. A Bristol-Myers spokesman said he could not confirm whether the company had registered any concerns.

John McKeegan, a spokesman for Johnson & Johnson, confirmed that the company complained about the movie, but denied that it threatened to pull advertising.

USA officials said the project was pulled after Johnson & Johnson argued that the movie was irresponsible.

"USA Network and its advertisers agreed that it would be in the public's best interest to stop production of this movie," said Ron Sato, a USA spokesperson.

Racial Hostility at Lockheed

The U.S. Equal Employment Opportunity Commission (EEOC) moved in December to intervene in two private class action lawsuits filed in Atlanta against defense contractor Lockheed Martin.

The lawsuits, brought on behalf of hundreds of salaried and hourly African-American employees, charge that Lockheed harassed black workers, denied them deserved promotions or wages, and retaliated against them for complaining about the discrimination.

The EEOC asserts that Lockheed permitted a racially hostile work environment to exist by subjecting African- American employees to egregious harassment, which also led to biased decisions about promotions and pay. The alleged discriminatory conduct includes:

• Directing racial slurs at African-American workers;
• Subjecting African-American workers to hangman's nooses at the work site; and
• Leaving Ku Klux Klan (KKK) materials and graffiti in Lockheed facilities.

"Not only has Lockheed failed to prevent and correct such overt discriminatory conduct but the company permitted the discrimination to continue even after charges were filed with the EEOC and the private litigation was initiated," says Katherine Bissell, EEOC's lead counsel in the matter.

Lockheed says it "does not tolerate discrimination." Allegations of harassment are investigated, and "if proven, we act," says company spokesperson James Fetig. Acknowledging some of the alleged instances may have occurred, Fetig says company investigations did not uncover evidence "that would allow us to take action." He adds that the company has been frustrated by an EEOC "attitude that has been an obstacle to constructive dialogue."

- Russell Mokhiber