Provided by Rick Scott for Governor
Florida gubernatorial candidate Rick Scott said people started suggesting he run for governor after hearing him speak out about how the federal government needed to stay out of health care.
“He was a fairly hands-on CEO,” said John Schilling, a former reimbursement supervisor in the Fort Myers division office. “He should have known being CEO of a multibillion-dollar company. He should have known what is on his balance sheet.”
“You’re over-lawyering this,” Nashville attorney Jerre Frazier recalled Scott telling him. “He’s an optimistic kind of guy. He doesn’t like bad news.”
NAPLES —
A whistleblower in the Columbia/HCA fraud case said Rick Scott should have known of billing practices at his hospitals that cheated the federal government out of millions of dollars.
“He was a fairly hands-on CEO,” said John Schilling, a former reimbursement supervisor in the Fort Myers division office. “He should have known being CEO of a multibillion-dollar company. He should have known what is on his balance sheet.”
A Nashville attorney brought in for his auditing acumen remembers talking to Scott about significant compliance problems.
“You’re over-lawyering this,” Jerre Frazier recalled Scott telling him. “He’s an optimistic kind of guy. He doesn’t like bad news.”
These former corporate insiders are bewildered by Scott’s candidacy for Florida governor, let alone his dramatic rise in the polls.
Voters are seemingly discounting Scott’s forced resignation in 1997 shortly after the FBI began widespread raids of Columbia/HCA offices. Ultimately, the largest for-profit hospital chain in the United States paid a record $1.7 billion in criminal and civil fines for Medicare fraud.
In television ads and on the campaign trail, Scott has repeatedly said he takes responsibility for what happened at the company and says he learned from it.
“Initially when I first saw he was running, I didn’t give him much chance,” said Schilling, 48, who has lived in Naples since 2001. “You can buy your way into the candidacy.”
Schilling didn’t know Scott also lives in Naples until he began research for his 2006 book, Undercover, detailing his life as an FBI informant in the case. The two have never run into each other in Naples.
“He’s putting on what people want to hear,” Schilling said of Scott’s candidacy. “People are always frustrated at inefficiency of government.”
Schilling was hired at the company’s Southwest Florida division offices in 1993 as a reimbursement manager. Six months into the job, he sensed something was wrong. A Medicare auditor had made an error that resulted in a $3 million gain at Fawcett Memorial Hospital in Port Charlotte.
District executives conspired to keep the mistake under wraps and keep the ill-gotten gain. He soon found other record irregularities going back at least 10 years.
“I exposed a double set of books,” he said, adding that one set was inflated cost reports for the federal government and the second was for internal purposes.
“The second was stamped confidential and don’t show to Medicare auditors,” Schilling said. “We estimated alone in 10 years over a billion in overpayments to the chain.”
“I exposed a double set of books,” Schilling said, adding that one set was inflated cost reports for the federal government and the second was for internal purposes. “The second was stamped confidential and don’t show to Medicare auditors. We estimated alone in 10 years over a billion in overpayments to the chain.”
In time, Schilling joined forces with James Alderson, an accountant at a Montana hospital, in a whistleblower case against Columbia/HCA.
Scott’s way of doing business was to have his chief executive officers at regional offices play hardball with acquisitions of other hospitals, doctors’ practices and bottom-line profits.
“If you didn’t cut the mustard, you were let go, if you didn’t meet budget goals,” Schilling said. “That is the way Rick Scott ran the company. He gave goals on notecards. He created a culture that the individual pushed the limit. Bonuses were 50 percent or more of a salary.”
* * * * *
Frazier, the Nashville attorney brought in to troubleshoot compliance issues, recalls Scott as always polite and personable.
“He was not a tyrant,” said Frazier, who now lives in Houston. “He stood in line in the cafeteria.”
The same day he was ousted as CEO, Scott didn’t flee the corporate premises _ instead he shook hands with employees.
“There were three buildings and he went around and expressed his appreciation to people,” he said.
Scott’s downfall nonetheless was the corporate culture he created that went bad, Frazier said, explaining that hospital managers and division chiefs were relentless in meeting Scott’s mission of creating a unified health-care and hospital company.
“I did not see Rick Scott act in bad faith but what I did see is the corporate culture he presided over. I did not see Rick Scott to be inclined to do anything criminal,” he said.
Photo by TRISTAN SPINSKI
Buy this photo ?
Home of Rick Scott, Naples, Wednesday, June 16, 2010. Photo by Tristan Spinski
“I did not see Rick Scott act in bad faith but what I did see is the corporate culture he presided over. I did not see Rick Scott to be inclined to do anything criminal,” Frazier said.
Still, Frazier isn’t certain how aware Scott was of the consequences of the corporate culture he created.
“I’m not sure he understood how much his lieutenants twisted arms,” he said. “People did not report bad news to him.”
Television campaign commercials in Florida, aired by supporters of opponent
Bill McCollum, may be truthful that impoverished seniors and uninsured pregnant women who were unable to pay were turned away at Columbia/HCA hospitals. But he doesn’t believe that would have happened if Scott were on the scene.
“I don’t think Rick Scott would have left someone outside, I don’t think he would have left someone to die,” Frazier said. “That is not the right thing to do and I do think he would have said it was not the right thing.”
Still, bottom-line driven hospital managers with sights sets on their bonuses were more than likely to find ways to exclude services to the poor and uninsured.
“Turn people away? It may have been a little more extreme at HCA,” he said.
Schilling, the Southwest Florida whistleblower, said he’s certain those kinds of things happened at Columbia/HCA and other hospitals.
“What I did hear sometimes in the trenches, some cost-cutting measures did have impacts on the quality and nurses were stretched thin. Patient satisfaction (surveys) showed high results. Who is compiling those surveys and how valid are those? Was there an independent source?”
For certain, when the federal investigation went into overdrive, a mountain of lawyers was retained, Frazier said.
“Three law firms were hired, each undermining each other. There was sort of mass confusion,” he said. “The lawyers did have control over who had access to Rick Scott.”
“CEOs blanket themselves with attorneys,” Schilling said. “They dodge the bullet of not being questioned. He never gave any information or assisted in the investigation.”
Although Scott has stated that he takes responsibility, Schilling doesn’t think that should satisfy voters.
“I give him credit for taking responsibility for those things but again, he stated he wasn’t aware of the fraud,” Schilling said. “I find it somewhat ironic, here you have someone running a multibillion-dollar company and he is not aware of what is going on and yet he wants to be governor. Is he going to not be aware of what is going on in state government? I just wouldn’t trust him.
“It must be an ego thing,” he added, about his theory of why Scott is running for governor. “He must need the ego of being in charge. I don’t know. It’s not for the money so it’s got to be for the ego.”
MORE DAILY NEWS COVERAGE ON RICK SCOTT
? Church co-founded, led by Rick Scott gives aid to Immokalee’s farmworkers
? Rick Scott left Presbyterian church to help found Naples Community Church
? Rick Scott for governor of Florida catches on with out-of-state donors
? PHOTOS: Rick Scott discusses Arizona immigration law in Naples
? Finance report: Scott loaned his campaign $22.9M and has spent nearly as much
? Click here for related story: For the record, do Rick Scott and Bill McCollum vote themselves?
? Click here for related story: VIDEO/PHOTOS: Rick Scott stops in Naples during state-wide six day bus tour
? Click here for related story: POLL: McCollum campaigns on GOP opponent Rick Scott’s turf
? Click here for related story: Judge: McCollum can get funds to match Rick Scott
? Click here for related story: VIDEO: Gov. candidate Rick Scott talks to local Republican women’s group
? Click here for related story: VIDEO/PHOTOS: Howdy neighbor: Rick Scott, Collier Democratic offices in same plaza
? Click here for related story: Rich Rick: Governor candidate Scott worth $218 million, investments reach Latin America
? Click here for related story: Dodgeball: Rick Scott, Bill McCollum debate about debate dates
? Click here for related story: Rick Scott interviews: Governor candidate on HCA, oil spill, illegal immigration
? Click here for related story: VIDEO/PHOTOS: Florida governor candidates Sink, McCollum, Chiles make pitch to editors
? Click here for related story: Rick Scott rides TV ads, ‘21st century campaign’ to GOP lead for Florida governor
? Click here for related story: Florida, Collier GOP leaders neutral as attacks escalate on Rick Scott, McCollum
? Click here for related story: McCollum wants to debate Rick Scott; Mitt Romney endorses in governor race
? Click here for related story: POLL: Rick Scott challenges Bill McCollum to four debates in Florida GOP governor’s race
? Click here for Daily News’ initial report on Rick Scott’s campaign for governor, HCA and his background
? Click here for a Q&A with the Daily News and Rick Scott
_ Connect with reporter Liz Freeman at www.naplesnews.com/staff/liz_freeman
? 2010 Naples Daily News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
