Originally created 08/02/97

Mr. Frist goes to Washington



NASHVILLE, Tenn. - Columbia/HCA Healthcare Corp.'s new chief, Thomas Frist Jr., plans to show regulators a personal touch.

As three employees face federal health care fraud charges, Mr. Frist has company lawyers determining which laws, if any, his company broke. He expects answers within the next 10 days. Then he plans to fly to Washington with a list of ways the nation's largest for-profit hospital chain can make amends.

"I have to take decisive action in a responsible way, gain credit and credibility through actions with the governmental bodies, and maybe get an audience with them as CEO," Mr. Frist said in an interview at Columbia's Nashville headquarters. The company owns Columbia Augusta Medical Center.

Mr. Frist, 58, took over last week when Columbia founder and Chairman Richard Scott and President David Vandewater resigned under pressure from board members.

So far the federal Medicare and Medicaid fraud probe has led to the indictment against three Columbia middle managers and surprise searches last month by federal agents who seized documents from Columbia and affiliated sites in seven states.

The new chief has asked the Washington law firm Latham & Watkins to lead the company's own examination of Columbia's activities to date and what the company should do to change its policies.

"I'm saying, `You orchestrate it. You take care of this company. You work with us to develop these six, seven things we need to do,"' Mr. Frist said. "We'll go to Justice (Department officials) and say, `Here's what we're going to do,' and then I've got to follow through and make sure they're done."

As he waits for lawyers and accountants, to be hired by Monday, to wrap up their examination, Mr. Frist is learning how to manage the company's day-to-day operations and trying to repair its tarnished image.

Some efforts at transforming Columbia are small and symbolic: an end to locked doors at headquarters and a marketing campaign meant to make the Columbia brand name as recognizable as McDonald's.

Some are substantive: ending a controversial policy that let doctors buy shares in Columbia facilities, a policy critics say induces doctors to boost their income by referring patients to Columbia sites.

Justice Department and Health and Human Services Department officials plan to talk with Columbia executives about an immediate concern, Justice Department spokeswoman Carole Florman said: "how to avoid continuing the same type of alleged behavior that led us to this point."

But she declined to speculate on the date of the meeting or who might meet with Mr. Frist.

"I cannot imagine it would be (Attorney General) Janet Reno," she said.

The federal sweep led to an indictment unsealed this week against Robert Whiteside, 47, of Brentwood, Tenn.; Jay A. Jarrell, 42, of Fort Myers, Fla.; and Michael T. Neeb, 35, of Jacksonville, Fla.

They are charged with cheating federal health care programs out of $1.8 million through overbillings for Fawcett Memorial Hospital in Port Charlotte, Fla.

All have denied any wrongdoing.