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Monday, February 28, 2011

Great Scott? Florida Pill Mills and the Governor

Richard Lynn "Rick" Scott is the current governor of Florida. This post presents some biographical information about Governor Scott. Readers may find it interesting to view his business background and discover more about Rick Scott, named by Time Magazine in June, 1996, one of "America's 25 Most Influential People."

In 1987, Scott helped found the Columbia Hospital Corporation with two business partners. This merged with Hospital Corporation of America in 1989 to form Columbia/HCA and eventually became the largest private for-profit health care company in the United States.

After investigation from the FBI, the Internal Revenue Service, and the Department of Health and Human Services, he was forced to resign as Chief Executive of Columbia/HCA in 1997 amid a scandal over the company's business and Medicare billing practices. The company ultimately admitted to fourteen felonies and agreed to pay the federal government over $600 million. (Kurt Eichenwald, "2 Leaders Are Out At Health Giant As Inquiry Goes On," The New York Times, July 26 1997)  (M.C. Moewe, "Ex-Columbia Chief Helps Grow Solantic," Jacksonville Business Journal, April 17 2006)

In settlements reached in 2000 and 2002, Columbia/HCA plead guilty to 14 felonies and agreed to a $600+ million fine in the largest fraud settlement in US history. Columbia/HCA admitted systematically overcharging the government by claiming marketing costs as reimbursable, by striking illegal deals with home care agencies, and by filing false data about use of hospital space. ("Largest Health Care Fraud Case In U.S. History Settled," #386 Department of Justice, June 26 2003)

The company also admitted fraudulently billing Medicare and other health programs by inflating the seriousness of diagnoses and to giving doctors partnerships in company hospitals as a kickback for the doctors referring patients to HCA. They filed false cost reports, fraudulently billing Medicare for home health care workers, and paid kickbacks in the sale of home health agencies and to doctors to refer patients. In addition, they gave doctors "loans" never intending to be repaid, free rent, free office furniture, and free drugs from hospital pharmacies.

In late 2002, HCA agreed to pay the U.S. government $631 million, plus interest, and pay $17.5 million to state Medicare agencies, in addition to $250 million paid up to that point to resolve outstanding Medicare expense claims. In all, civil law suits cost HCA more than $2 billion to settle, by far the largest fraud settlement in US history. (Julie Appleby, "HCA to Settle More Allegations for $631M," USA Today, December 18, 2002)

After the forced departure from Columbia/HCA (although he was never charged in the fraud), Scott became a venture capitalist. He launched Richard L. Scott Investments, based in Naples, Florida, which has stakes in health care, and manufacturing technology companies. (Drew Ruble, "Great Scott,", July 2006)

In 2003, Scott invested $5.5 million in Pharmaca Integrative Pharmacies, which operates drugstores/pharmacies that offer vitamins, herbal medicine, skin products, homeopathic medicines, and prescriptions. Other investors in Pharmaca include Tom Stemberg, founder and former CEO of Staples, and Arthur Blank, co-founder of Home Depot. ("Pharmaca Gets Equity To Expand Store Base," Chain Drug Review, December 15 2003)

In 2005-2006, Scott provided the initial round of funding of $3 million to, which offered hospitals, physicians, and other health care providers the opportunity to post information about their prices, hours, locations, insurance accepted, and personal backgrounds online.The company was founded with his daughter Allison. (Lisa Sibley, "Alijor's Online Directory of Providers Growing," San Jose Business Journal, July 24 2008)

Solantic, based in Jacksonville, Florida, was co-founded in 2001 by Scott and Karen Bowling, a former television anchor whom Scott met after Columbia bought what is now Memorial Hospital Jacksonville in 1995.

In 2006, Scott said that his plans for Solantic were to establish a national brand of walk-in medical clinics. In August 2007, the company received a $40 million investment from a private equity firm and said that it expected to open 35 clinics by the end of 2009, with annual revenues of $100 million once all these clinics were open, compared to $20 million at the time. (Urvaksh Karkaria, "Solantic to Expand Well Beyond State: The Urgent-Care Center Is Planning to Open 35 More Clinics By the End of 2009," Jacksonville Times-Union, August 15 2007)

As of March 2009, Solantic had 24 centers, all located in Florida.

Scott proudly talks about Solantic during his anti-reform campaign, holding it out as an example of the kind of free-market ingenuity that can fix our ailing healthcare infrastructure, as opposed to big government.

Still, Solantic has been the target of numerous employment discrimination suits, including one that settled with seven plaintiffs for an undisclosed sum on May 23, 2007. These suits allegedly stem from a Scott-directed policy to not hire elderly or overweight applicants, preferring 'mainstream' candidates. (Tristram Korten, "A Healthcare Reform Foe's Alleged History of Discrimination,", October 1 2009)

The Latest On Governor Rick Scott

In 2011, Governor Rick Scott moved to abolish a computer database that would track every prescription for narcotic drugs, one of the state's main weapons to combat pill mills. Documents accompanying Scott's budget ask the Legislature to repeal the 2009 law that approved the database after an eight-year fight, state officials said Tuesday.

"I’m trying to figure out in that group where the money is. It has come to my attention that thousands of dollars have been spent on lawyers, travel, meals and board members," Scott said. "I don’t support the database. I believe it’s an invasion of privacy.... it appears that the money’s been wasted."

The database has support from just about everyone (except the governor) — legislators, law enforcement, responsible doctors and pharmacists and legitimate pain clinics.

The database was set to start December 1 but is stalled by a protest from an unsuccessful bidder. "He does not believe this is a function that is best performed by government," Scott spokeswoman Amy Graham told Health News Florida. She did not say who Scott believes should run the system.

The database would be financed with $500,000 in private grants, not by state tax dollars.

Forty-two other states have databases. 

Unless the governor somehow likes the drug tourism, overdoses and other human wreckage spawned by a pill-friendly culture, he should reconsider his decision and support the system.

Prescription drug abuse is blamed for an estimated seven deaths a day in Florida.The database can help law enforcement, pharmacists and health officials pinpoint patients who abuse or traffic in powerful pills like oxycodone by getting multiple prescriptions in a short timeframe, a practice known as doctor-shopping.

Publisher and former presidential candidate Steve ForbesAfter years investigating HCA, federal law enforcement officials found evidence that Scott's hospitals kept two sets of books, Forbes wrote in an op-ed published in The Tampa Tribune. “The first tracked actual expenses, while the second contained inflated figures that were submitted to the government for reimbursement. By the time charges were filed, HCA officials admitted to systematically overcharging the government - and by extension taxpayers - with fraudulent claims, including exaggerating the treatment of Medicare patients to increase billings.(Steve Forbes, "Rick Scott's Troubling Story of Convenience," The Tampa Tribune, July 7 2010)

Forbes wrote that even if Scott was unaware of the fraud, the idea that such a massive crime occurred while he was chief executive raises serious questions about his ability to manage.

“Sounds like the CEO of BP ducking responsibility for the safety of BP's offshore oil rigs,” Forbes wrote.

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