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EXHIBIT 99.3
UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
AND
FOR THE WESTERN DISTRICT OF TEXAS
EL PASO DIVISION
UNITED STATES OF AMERICA, )
)
V. ) Case No. Cr.
)
COLUMBIA HOMECARE GROUP, Inc. )
COLUMBIA MANAGEMENT COMPANIES, Inc.)
)
Defendants. )
PLEA AGREEMENT
The Defendants, Columbia Homecare Group, Inc., and Columbia Management
Companies, Inc., and their parent, HCA - The Healthcare Company, have engaged in
plea discussions with the United States pursuant to Rule 11 (e)(1)(c) of the
Federal Rules of Criminal Procedure and agree as follows:
1. (a). HCA - The Healthcare Company, a Delaware corporation with its
headquarters in Nashville, Tennessee, is the parent company of the Defendants,
and was known as Columbia/HCA Healthcare Corporation until May, 2000. HCA -The
Healthcare Company, through its predecessors, subsidiaries and affiliates
(collectively referred to as. HCA) own and operate health care facilities
throughout the United States.
(b). Defendant Columbia Homecare Group, Inc., is a wholly
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owned subsidiary of HCA which was responsible for managing home health care
operations associated with hospitals owned by HCA or its subsidiaries.
(c). Defendant Columbia Management Companies, Inc., was the
successor in interest to certain unincorporated operating groups of HCA and its
predecessors and was in the business of operating and managing hospitals and
health care facilities. Columbia Management Companies, Inc., also owns, or will
own by the date of entry of this-Plea Agreement, Deering Hospital and Clearwater
Community Hospital, both located in Florida.
2. Upon execution of this Plea Agreement, the United States will
file criminal Information in the United States District Courts for Northern
District of Georgia, the Southern District of Florida, the Middle District of
Florida, the Middle District of Tennessee, and the Western District of Texas.
Defendants will waive venue and execute waivers of Indictment. In addition,
Defendants will sign written consents, pursuant to Rule 20 of the Federal Rules
of Criminal Procedure, to transfer to the District Court for the Middle District
of Florida the Information filed in the Northern District of Georgia, the
Southern District of Florida and the Middle District of Tennessee The Defendants
will plead guilty to the crimes specified in these Information as follows.
IN THE MIDDLE DISTRICT OF FLORIDA:
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a. Defendant Columbia Homecare Group, Inc., will plead guilty to an
Information brought by the United States Attorney for the Northern
District of Georgia charging one count of receiving unlawful
remuneration, in violation of 42 U.S.C. ss.1320a-7b (Attachment A);
b. Defendant Columbia Homecare Group, Inc., will plead guilty to an
Information brought by the United States Attorney for the Southern
District of Florida charging one count of conspiracy to defraud the
United States and to pay unlawful remuneration, in violation of 18
U.S.C. ss.ss.371 and 2 (Attachment B);
c. Defendant Columbia Homecare Group, Inc., will plead guilty to an
Information brought by the United States Attorney for the Middle
District of Florida charging one count of conspiracy to defraud the
United States, and to make false statements and representations, and
one count of conspiracy to defraud the United States and to receive
unlawful remuneration, in violation of 18 U.S.C. ss.371 (Attachment C);
d. Defendant Columbia Management Companies, Inc., will plead guilty to
an Information brought by the United States Attorney for the Middle
District of Florida charging eight counts of making false statements
and representations, in violation of 18 U.S.C. ss.1001 (Attachment D);
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e. Defendant Columbia Management Companies, Inc., will plead guilty to
an Information brought by the Fraud Section, Criminal Division,
Department of Justice and filed in the Middle District of Tennessee,
charging one count of conspiracy to defraud the United States and to
use false writings and documents, in violation of 18 U.S.C. ss.371
(Attachment E); and
IN THE WESTERN DISTRICT OF TEXAS:
f. Defendant Columbia Management Companies, Inc., will plead guilty to
an Information brought by the United States Attorney for the Western
District of Texas (El Paso) charging one count of conspiracy to pay
unlawful remuneration, in violation of 18 U.S.C. ss.371 and 42
U.S.C. ss.1320a7b (Attachment F).
3. Pursuant to 18 U.S.C. ss.3571(d), the maximum sentence to be
imposed by the Courts for each Count in the Information is a fine of the greater
of twice the gross pecuniary gain, or twice the gross pecuniary loss, from the
offenses charged.
4. If acceptable to the Courts, Defendants and the United States
will waive the presentence investigation and report pursuant to Rule 32 (b)(1)
of the Federal Rules of Criminal Procedure and ask that Defendants be sentenced
at the time the guilty pleas are entered.
5. Subject to the Courts' approval of this Plea Agreement,
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Defendant(s) will pay the following criminal fines and Special Assessments
pursuant to 18 U.S.C. ss.3571 and 18 U.S.C. ss.3013 respectively:
a. Defendant Columbia Homecare Group, Inc., will pay a criminal fine of
$3,360,000 and a Special Assessment of $400 upon the Information
described in Paragraph 2(a) above; a criminal fine of $3,360,000 and a
Special Assessment of $400, upon the Information described in Paragraph
2(b) above; and a criminal fine of $8,400,000 and a Special Assessment
of $800, upon the Information described in Paragraph 2(c) above;
b. Defendant Columbia Management Companies, Inc., will pay a criminal
fine of $22,600,000 and a Special Assessment of $3,200 upon the
Information described in Paragraph 2(d) above;
c. Defendant Columbia Management Companies, Inc., will pay a criminal
fine of $27,500,000 and a Special Assessment of $400 upon the
Information described in Paragraph 2(e) above; and
d. Defendant Columbia Management Companies, Inc., will pay a criminal
fine of $30,116,592 and a Special Assessment of $400 upon the
Information described in Paragraph 2(f) above.
6. The United States and Defendants agree that restitution shall
not be imposed as to any part of Defendants' criminal
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sentences. In its determination not to seek restitution, the United States has
taken into consideration the restitution to be paid pursuant to the "Civil and
Administrative Settlement" agreement simultaneously entered into between the
United States and HCA settling some civil and administrative claims and remedies
and pursuant to ongoing negotiations and/or litigation as to matters not covered
by that settlement.
7. The total amount of the fines, assessments, and settlement in
Paragraph 5 above shall be paid in full within five business days after entry of
final judgments by the respective courts upon all the Information described in
Paragraph 2 above.
8. This Plea Agreement is entered into in conjunction with: a) a
corresponding Civil and Administrative Settlement between HCA and the United
States, which incorporates: (a) a Corporate Integrity Agreement between HCA and
the Office of Inspector Genera 1 of the United States Department of Health and
Human Services; and b) a Divestiture Agreement between the Office of Inspector
General of the United States Department of Health and Human Services and HCA. If
these agreements are not executed by the date of acceptance of the Plea
Agreement by the courts, the United States and Defendants may withdraw from this
Plea Agreement.
9. Defendants and HCA agree to cooperate fully and completely
with the United States for five years from the date of
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acceptance of this Plea Agreement in any criminal, civil and/or administrative
investigations of, and proceedings against, any present and former officers,
directors, employees and agents, and of any parties with whom it had or has a
business or professional relationship, including, but not limited to, vendors,
contractors, partners, joint venturers, physicians, and referral sources.
Defendants and HCA further agree that such cooperation' shall be binding upon
themselves and their successors and will include any such investigations
conducted by the Department of Justice, the Federal Bureau of Investigation, the
Department of Health and Human Services, the Defense Criminal Investigative
Service, the United States Postal Inspection Service and the state Medicaid
Fraud Control Units which are currently open or commenced within five years from
the date of acceptance of this Plea Agreement.
10. Defendants and HCA agree that the full and complete
cooperation described in paragraph 9 includes, but is not limited to, the
following:
a. Defendants and HCA will provide complete production of all
non-privileged information, including: books, papers, documents and other
objects in Defendants' and HCA's custody and/or control; reports of financial
and other internal and external audits; and documents reflecting severance or
termination agreements with former employees. Whenever such data
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are retained in computerized format, Defendants and HCA shall provide access to
such data and assistance in operating the computers as is, necessary to produce
the data requested. Defendants and HCA will make all reasonable efforts to
facilitate access to, and encourage the cooperation of, their agents and
accountants in producing such information as requested by the United States.
b. Defendants and HCA will provide testimony and any other
information deemed necessary by the United States or a court to identify or
establish the original location, authenticity, or other evidentiary foundation
for any documents and to authenticate such documents in any criminal, civil and
administrative investigations and proceedings in which the United States is
involved.
c. Defendants and HCA will not assert any claim of privilege,
including attorney-client privilege or attorney-work product privilege, with
respect to any documents or testimony requested by the United States to
establish the original location, authenticity or evidentiary foundation for
documents referred to in subparagraph 10(a) above, provided that the United
States will not assert that the provision of such documents or testimony
constitutes a waiver of applicable privileges beyond the limits set forth in
this paragraph.
d. Defendants and HCA will provide testimony and/or other
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information orally by competent corporate representatives as requested by the
United States, to include sworn testimony before federal grand juries or in
federal trials, as well as oral briefings to federal and state law enforcement
authorities.
e. Defendants and HCA will take reasonable steps to facilitate
access to, and encourage the cooperation of, individual current and former
employees from whom testimony or information is sought in their individual
capacities. Defendants and HCA agree to advise any individual current and former
employees, who inform Defendants and/or HCA that they have been contacted by the
United States, that the companies encourage the individual's cooperation with
the government, and that Defendants and HCA will neither punish nor take any
adverse action against any employee for cooperating with the government.
Further, when requested to do so by attorneys for the government, Defendants and
HCA will provide such advice in writing to specific current or former employees.
Cooperation provided pursuant to this subparagraph will include identification
of witnesses who, to Defendants' and HCA's knowledge, may have material
information related to the matters under investigation.
f. When requested to do so, Defendants and HCA will provide oral
briefings for the purposes described in paragraph 9 to federal and state law
enforcement authorities regarding the results of internal investigations
relating to the subject matter
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of this Plea Agreement. Such briefings will be subject to the Agreement
Regarding Disclosure signed by the parties in April, 1998.
g. Defendants and HCA will retain all material records in their
original form for five years from the date of execution of this Agreement.
Before the expiration of the five-year period described above and before
disposing of any records covered by this subparagraph, Defendants and HCA will
consult with the United States Department of Justice concerning the continuing
need for preserving such records.
h. Defendants and HCA agree to continue the existing agreements
regarding contacts with represented persons, which agreements are described in
letters to and from the Department of Justice dated April 1, 1998, May 1, 1998,
June 5, 1998, April 16, 1999 and April 19, 1999.
i. Defendants and HCA agree that if Defendants or HCA sells,
merges or otherwise divests ten or more health care facilities in a single
transaction within 5 years from the date of execution of this Plea Agreement,
Defendants and HCA will include in any contract for sale, merger or divestiture
an obligation on the part of the purchaser/successor also to cooperate as
described in Paragraphs 10, 11 and 18 of this Plea Agreement. If fewer than ten
health care facilities are sold, divested or merged in a single transaction,
Defendants and HCA and its successors agree
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to continue to include in any contract for sale or divestiture, certain
provisions regarding records retention and access to witnesses as described in a
December 1, 2000 letter to the Department of Justice.
11. Defendants and HCA agree to disclose to the Criminal Division,
Fraud Section, of the Department of Justice any evidence of misconduct regarding
the activities, past and present, of any employees, officers, directors, agents,
consultants, partners, joint venturers, or other persons associated or
affiliated with Defendants and/or HCA that management has grounds, after
appropriate inquiry, to believe may constitute a violation of federal criminal
laws, civil fraud laws or any administrative regulation applicable to any
federal health care program for which criminal, civil fraud or civil monetary
penalties may be authorized. Defendants and HCA shall establish and/or maintain
existing procedures by which Defendants' and HCA's officers, employees or
agents, including those persons responsible for administering its compliance and
hotline programs, as well as its internal or external auditors, and senior
management personnel shall report all such allegations to a Compliance Officer.
The disclosures to the Fraud Section shall be made within 60 days of that date
on which Defendants and/or HCA or their successors become aware of such
misconduct.
12. If the courts accept this Plea Agreement, and Defendants
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and HCA comply with this Plea Agreement, including the cooperation described in
Paragraphs 9 and 10, the United States agrees not to prosecute Defendants and
HCA, its predecessors, successors, affiliates, subsidiaries or health care
facilities in which they have or had any ownership interest, for offenses which
may have been committed before the date of execution of this Plea Agreement and
arising from or relating to billing and reimbursement for services provided
pursuant to federal health care benefit programs regarding: Medicare cost
reports; violations of the Anti-Kickback Act, 42 U.S.C. ss.1320a-7b, the
Physician Self-referral law, 42 U.S.C. ss.1395nn and any other conduct involving
relations with referral sources and those in a position to influence referral
sources; DRG billing; laboratory billing; the acquisition of home health
agencies; and the provision of services by home health agencies. In addition,
the United States agrees not to prosecute the same entities for other possible
criminal offenses which are or have been under investigation by the Department
of Justice arising from or relating to billing and reimbursement for services
provided pursuant to federal health care benefit programs. This promise not to
prosecute does not extend to any conduct which may involve patient abuse or
neglect, or any crimes of violence.
13. The promises not to prosecute referred to in Paragraph 12 do
not extend to any individual, including any current or
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former officer, director, employee or agent of the Defendants or HCA.
14. Defendants and HCA agree that any failure to provide full and
complete cooperation as described in Paragraphs 9 and 10 above will be a breach
of this Plea Agreement and will empower the United States to seek to set aside
the Plea Agreement and to pursue all possible violations against the Defendants
and HCA. However, Defendants and HCA shall be entitled to receive reasonable
notice in writing from the United States to Defendants and HCA's General Counsel
of the specific circumstances constituting an alleged failure to provide the
cooperation required by this Plea Agreement and shall have 30 days from receipt
of such written notice, unless the United States determines that less time is
necessary, to cure any such failure before the United States initiates any court
action to set aside this Plea Agreement. In the event this Plea Agreement is set
aside pursuant to this paragraph and a prosecution is initiated, the
admissibility of certain statements made by Defendants and HCA shall be governed
by Paragraph 24 below.
15. Defendants and HCA agree that this Plea Agreement shall not
prevent, preclude or prejudice the United States from proceeding in the future
with investigations and prosecutions of any federal criminal violations which
may be committed after the date of execution of this Plea Agreement by
Defendants, HCA, or
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by any of their officers, directors, employees and/or agents.
16. This Plea Agreement is binding on the United States Department
of Justice, including all the offices of United States Attorneys. This Plea
Agreement does not bind the Internal Revenue Service of the United States
Department of Treasury or Defendants or HCA with respect to any civil or
criminal liability, if any, which Defendants or HCA may have for federal income
or other taxes. The provisions of this Plea Agreement do not preclude the United
States from prosecuting Defendants and/or HCA for any violations Title 26 and
Title 18 offenses in connection with the enforcement of federal revenue laws,
including but not limited to conspiracies to commit such offenses and
conspiracies to defraud the United States by impeding, impairing, obstructing
and defeating the lawful function of the United States Treasury and the Internal
Revenue Service in the ascertainment, computation, assessment or collection of
revenue.
17. Defendants and HCA agree that all costs (as defined in the
Federal Acquisition Regulations ("FAR") ss.31.205-47 and in Titles XVIII and XIX
of the Social Security Act, 42 U.S.C. ss.ss.139S-1395ggg and ss.ss.1396-1396v,
and the regulations promulgated thereunder, incurred by or on behalf of
Defendants and/or HCA, its present or former officers, directors, employees,
shareholders and agents in connection with: (1) the government's investigations,
and Defendants and/or HCA's investigations and
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defense, of the matters covered by this Plea Agreement; (2) the negotiation of
this Plea Agreement; (3) any corrective action undertaken by Defendants and HCA
pursuant to this Plea Agreement; and (4) the payments made to the United States
pursuant to this Plea Agreement shall be unallowable costs for government
contract accounting and for Medicare, Medicaid, CHAMPUS and FEHBP reimbursement
purposes.
18. Defendants and HCA have taken and agree to take the following
remedial actions:
a. HCA has established a compliance plan which has been described
to the Department of Justice in connection with the negotiation of this Plea
Agreement. The plan includes an employee hotline by which its officers and
employees can report any facts or circumstances which the officer or employee
believes may constitute misconduct which may violate federal law; and
b. Upon acceptance of this Plea Agreement by the courts and
execution of the Civil and Administrative Settlement Agreement, HCA agrees to
adopt and apply the Corporate Integrity Agreement, which is incorporated in the
Civil and Administrative Settlement, to all of the health care facilities and
lines of business located in the United States that they own or operate.
19. Defendants and HCA agree that they will, within 120 days of
acceptance of this Plea Agreement, reaffirm, in writing, corporate procedures
and policies which shall prohibit their
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corporate directors, officers, employees and agents from engaging in the
practices described in the Information and in the Civil and Administrative
Settlement.
20. Defendants and HCA shall, within 90 days of acceptance of this
Plea Agreement, certify to the Department of Justice that each has received
signed certifications from each of their corporate officers, including those at
the group, division and facility level, and all other officers and employees
principally responsible for negotiating contracts with potential referral
sources, all personnel responsible for approving such activities, and all
directors, managers and supervisors of employees responsible for preparing or
submitting billings to government agencies or private payors, acknowledging that
each has received and read a detailed summary of this Plea Agreement, the
Information, and the Civil and Administrative Settlement, and further, that each
has been advised that all documents related to this Plea Agreement and the Civil
and Administrative Settlement have been posted on HCA's internal web site.
21. Defendants and HCA shall, within 120 days of acceptance of
this Plea Agreement, conduct instructional meetings for all personnel described
in Paragraph 20 above, at which meetings outside legal counsel, ethics officers
and auditors shall thoroughly explain and review these criminal and civil
proceedings and the corporate procedures and policies described
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in Paragraph 18 above.
22. Defendants and HCA agree that neither of them will file for
voluntary bankruptcy protection within 90 days after making the payments
described in Paragraph 5 and 6 above.
23. If this Plea Agreement or any material provision thereof,
including the sentences agreed upon in Paragraphs 5, 6 and 7 above, is rejected
by either court the parties shall be released from their obligations under this
Plea Agreement and it shall be null and void. It is further agreed that, in this
event, Defendants may withdraw any of their pleas of guilty if such a plea has
been entered, and that the United States may move to dismiss the Information
without prejudice. Defendants and HCA will make no objection to such dismissal,
nor any objection, on the basis of such dismissal or on the basis of the voiding
of this Plea Agreement, to the continuation of the investigations or the return
of any indictment. It is further agreed, that if this Plea Agreement is
rejected, the admissibility against Defendants or HCR, or their successors, of
any statements made by Defendants or HCA or their representatives during the
course of and in furtherance of the plea discussions will be determined under
Rule 11(e)(6) of the Federal Rules of Criminal Procedure and Rule 410 of the
Federal Rules of Evidence, and the terms of all agreements previously entered
between HCA and the United States. Defendants and HCA acknowledge that all leads
derived from such statements
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may be used against Defendants or HCA in any subsequent proceeding.
24. If any Defendant or HCA fails to comply with any material
provision of this Plea Agreement and a court either sets aside this Plea
Agreement or declares this Plea Agreement null and void, Defendants and HCA,
including their successors, subsidiaries and affiliates will be subject to
prosecution for the he criminal violations alleged in the Information and/or any
other violations for which prosecution would otherwise be barred by Paragraph
12. In any such prosecution, the admissibility against Defendants and HCA of any
statements made by legal representatives of Defendants or HCA in connection with
the negotiation of this Plea Agreement, or pursuant to its terms will be
determined under Rule 11(e)(6) of the Federal Rules of Criminal Procedure, Rule
410 of the Federal Rules of Evidence, and the terms of all agreements previously
entered between HCA and the United States. All leads derived from such
statements may be used against Defendants and HCA. Statements made by other
employees of Defendants or HCA whose testimony is provided pursuant to Paragraph
10 above shall be admissible notwithstanding Rule 11 and Rule 410.
25. In the event this Plea Agreement is set aside for any reason,
Defendants shall be entitled to the return of payments made to the United States
under paragraph 5 of this Plea
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Agreement.
26. Defendants and HCA agree that, except for the charges
contained in the Information described in Paragraph 2(d) above, all criminal
statutes of limitations shall be tolled from September 1, 1998, until the date
on which the courts accept or reject this Plea Agreement. With respect to the
Information described in Paragraph 2(d) above, Defendants and HCA agree that the
criminal statute of limitations shall be tolled from April 1, 1996. In addition,
in the event that this Plea Agreement is set aside pursuant to Paragraph 24
above, Defendants and HCA agree that the statutes of limitations further shall
be tolled from the time of acceptance of this Plea Agreement until the date on
which the Plea Agreement may be set aside.
27. Defendants and HCA waive and will not assert any defenses or
claims they may have, which defense or claim may be based in whole or in part on
the contention that under the Double Jeopardy Clause of the Fifth Amendment, or
under the Excessive Fines Clause of the Eight Amendment, this Plea Agreement
and/or the resulting pleas and sentences bar a remedy sought in any civil or
administrative proceeding.
28. Each Defendant is pleading guilty because it is guilty of the
crime(s) charged in the Information.
29. Defendants agree that a person who is a senior executive
officer of both Defendants and HCA will appear to enter
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the guilty plea and for the imposition of sentence. Defendants and HCA also
expressly agree that they will not authorize any corporate representative to
make any public statements or representations which contradict the Defendants'
admissions of guilt made pursuant to this Plea Agreement.
30. This is the entire Plea Agreement between the United States
and Defendants and HCA. Except as provided in the Civil and Administrative
Settlement, particularly as the Settlement relates to the ability of Defendants
and HCA to participate in federally-funded programs, no other promises,
representations or inducements have been made to the Defendants, HCA or its
attorneys and none will be made unless in writing and signed by all parties.
AGREED AND ACCEPTED Date: 12/14/2000
HCA:
/s/ ROBERT A. WATERMAN
- -----------------------------------------
Robert A. Waterman
Senior Vice President and General Counsel
/s/ CATHRYN L. SOWERS
- -----------------------------------------
Cathryn L. Sowers
Vice President for Litigation
/s/ J. STEPHEN HINKLE
- -----------------------------------------
J. Stephen Hinkle
Litigation Counsel
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COLUMBIA MANAGEMENT COMPANIES, INC.:
/s/ ROBERT A. WATERMAN
- -----------------------------------------
Robert A. Waterman
Senior Vice President and General Counsel
COLUMBIA HOMECARE GROUP, INC.:
/s/ ROBERT A. WATERMAN
- -----------------------------------------
Robert A. Waterman
Senior Vice President
COUNSEL:
/s/ ROGER S. GOLDMAN
- -----------------------------------------
Roger S. Goldman
LATHAM & WATKINS
/s/ WALTER P. LOUGHLIN
- -----------------------------------------
Walter P. Loughlin
LATHAM & WATKINS
RESPECTFULLY SUBMITTED,
Joshua R. Hochberg
Chief, Fraud Section
Criminal Division
U.S. Department of Justice
/s/ Ann Arbor
Ann Arbor
Senior Counsel for Litigation
U.S. Department of Justice
Criminal Division, Fraud Section
P.O. Box 28188, McPherson Station
Washington, D.C. 20038
(202) 514-0727