8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report: December 14, 2000

(Date of Earliest Event Reported)

HCA – The Healthcare Company

(Exact name of Registrant as specified in its Charter)

Delaware

(State of Incorporation)

001-11239	75-2497104
(Commission File Number)	(I.R.S. Employer Identification No.)
One Park Plaza, Nashville, Tennessee	37203
(Address of principal executive offices)	(Zip Code)
(615) 344-9551
(Registrant’s telephone number, including area code)

Item  5.     Other Events

      On December 14, 2000, HCA – The Healthcare Company announced an agreement to resolve pending criminal issues and other allegations involved in the government investigation of the company.

Item  7.     Exhibit  5

99.1	Copy of press release dated December 14, 2000 relating to announcement of agreement to resolve pending criminal issues and other allegations involved in the government investigation.
99.2	Civil and Administrative Settlement Agreement dated December 14, 2000 among HCA – The Healthcare Company, the United States Department of Justice and others.
99.3	Plea Agreement dated December 14, 2000 among the United States Department of Justice, Columbia Homecare Group, Inc., Columbia Management Companies, Inc. and HCA – The Healthcare Company.
99.4	Corporate Integrity Agreement dated December 14, 2000 among HCA – The Healthcare Company and the Office of Inspector General of the United States Department of Health and Human Services.

SIGNATURE

      Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

HCA – The Healthcare Company

/s/ JOHN M. FRANCK II

John M. Franck II

Vice President and

Corporate Secretary

DATED: December 20, 2000

EX-99.1 2 g66041ex99-1.txt PRESS RELEASE DATED 12/14 1 EXHIBIT 99.1 [HCA LOGO] NEWS - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE INVESTOR CONTACT: MEDIA CONTACT: Mark Kimbrough Jeff Prescott (615) 344-2688 (615) 344-5708 HCA SIGNS AGREEMENTS IN COLUMBIA INVESTIGATION Columbia Management Companies, Inc and Columbia Homecare Group, Inc. Agree to Pleas NASHVILLE, TENN., DEC. 14, 2000--HCA announced today that it has signed an agreement with the criminal division of the Department of Justice and U.S. attorneys' offices in Atlanta; El Paso, Texas; Miami; and Tampa, Fla. to resolve all pending federal criminal issues in the Columbia investigation. The company also signed today a civil settlement agreement with the civil division of the Department of Justice, first announced by the company in May 2000, to resolve civil false claims issues related to DRG coding, outpatient laboratory and home health. Today's actions also included the signing of a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. "Today's action represents one of the last steps needed to put the Columbia investigation behind us and allows us to move forward, maintaining our focus on providing quality patient care," said Thomas F. Frist, Jr., M.D., Chairman and Chief Executive Officer of HCA. Frist was named Chairman and CEO of the company in July of 1997, bringing with him Jack Bovender as President and COO. The two immediately began making structural changes within the company, including the announcement of a 12-point plan to refocus operations. The plan placed new emphasis on locally-managed hospitals and included elements such as: - Halting the company's national branding campaign and returning to a focus on local community relationships - Reemphasizing a "patients first" philosophy with a new mission and values statement - Replacing most of senior management and further strengthening the board of directors - Developing a code of conduct as part of a model ethics and compliance program -more- 2 In exchange for a full criminal release for the company and its affiliates on all federal healthcare billing issues involved in the investigation up to the date pleas are entered, Columbia Management Companies, Inc. and Columbia Homecare Group, Inc. (non-operating subsidiaries) have agreed to the following pleas: Department of Justice - DRG Coding, one count of conspiracy. U.S. Attorney's Office, Atlanta - Home health acquisitions, one count of receiving unlawful remuneration. U.S. Attorney's Office, El Paso - El Paso physician relationships, one count of conspiracy. U.S. Attorney's Office, Miami - Home Health acquisitions and community educators cost allowability, one count of conspiracy. U.S. Attorney's Office, Tampa - Home Health acquisitions and community educators, two counts of conspiracy. Cost report claims in connection with certain specific cost reports, multiple counts of false statements. Today's agreements resolve all federal criminal issues outstanding against the company and civil issues related to outpatient lab billing, home health issues and DRG coding. In addition, representatives of state attorneys general have agreed to recommend to state officials that the company be released from corresponding criminal liability in all states in which the company conducts business. The company continues to discuss civil issues relating to cost reporting and physician relations with the government. The criminal agreement also will result in the company divesting Deering Hospital in Miami, Fla. The company has been in discussions over the past few years with buyers interested in acquiring Deering Hospital. The divestiture was agreed to as part of the overall criminal resolution, and does not reflect an admission or understanding that the facility was involved in the specific situations discussed in the agreement. In addition, the company has agreed to the exclusion from the Medicare program of Clearwater Community Hospital in Clearwater, Fla., which the company closed in February 1999. As part of today's announced criminal agreement the company will pay the government approximately $95 million, which the company will record as a special charge in the fourth quarter of 2000. The criminal agreement is conditional upon entry of pleas in federal district court, and necessary court approvals, which are expected in the first quarter of 2001. Payment of the criminal settlement will be made by the company within five days after all necessary court approvals are obtained. As previously announced in May of 2000, the civil agreement completed today included a provision for the company to pay the government $745 million plus interest. Payment of the civil settlement will be made upon court approval of the settlement, which is expected in the first quarter of 2001. The accounting charge for the civil settlement was recorded in the second quarter of 2000. 3 This press release contains forward-looking statements (all statements other than those setting forth solely historic fact) based on management's current expectations. Numerous risks, uncertainties and other factors including (1) the ability to consummate the agreements relating to the civil and criminal actions, (2) judicial approval of the settlement agreements in the civil and criminal actions, (3) the review by the company's external auditors of the accounting treatment of the settlement amounts and any related adjustments, (4) any examination by the Internal Revenue Service of the tax treatment of the settlement amounts and any related adjustments, (5) the impact of the remaining civil issues relating to cost reporting and physician relations not resolved by the settlements, (6) the impact of the settlements on pending and any future actions by state government authorities and civil litigation by private plaintiffs, (7) and other factors detailed from time to time in the company's filings with the Securities and Exchange Commission may cause actual results to differ materially from those anticipated in the forward-looking statements. Many of the factors that will determine the impact of the announced settlements are beyond the ability of the company to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof. The company undertakes no obligation to revise or update any forward-looking statement, or to make and other forward-looking statements, whether as a result of new information, future events or otherwise. All references to company and "HCA" as used throughout this news release refer to HCA - The Healthcare Company and its affiliates. EX-99.2 3 g66041ex99-2.txt SETTLEMENT AGREEMENT 1 EXHIBIT 99.2 CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT I. PARTIES This Civil and Administrative Settlement Agreement (Agreement) is entered into between the following (hereinafter "the Parties") through their authorized representatives: the United States of America, acting through the United States Department of Justice and on behalf of the Office of Inspector General (OIG-HHS) of the Department of Health and Human Services (HHS); the TRICARE Management Activity (TMA)(formerly the Office of Civilian Health and Medical Program of the Uniformed Services (OCHAMPUS), through its General Counsel; the Office of Personnel Management (OPM), which administers the Federal Employees Health Benefits Program (FEHBP), through the United States Attorney's Office for the District of Columbia; (collectively the "United States"); and HCA - - The Healthcare Company, formerly known as Columbia/HCA Healthcare Corporation, on behalf of its predecessors and current and former affiliates, divisions and subsidiaries (collectively "HCA"). II. PREAMBLE As a preamble to this Agreement, the Parties agree to the following: A. HCA is a Delaware corporation that through its predecessors and/or its subsidiaries and affiliates operates or has operated over 400 hospitals, over 500 home health agencies, 2 and numerous ancillary health care facilities in at least thirty states. B. Dennis J. Wyman, M.D., Robert K. Rothfeder, M.D., Health Outcomes Technologies, Donald S. McLendon, Tonya M. Atchison, Randal T. Boston, Sharon Christian, Martha Long, Kristen Kuhn, Pamela Cianci, Mary R. Hampton, Sara Ortega, John W. Schilling, Madelyn Rappaport, J. Watson Maxwell, Francis M. Patton, and Francesco Lanni (the "relators") filed qui tam actions in various United States District Courts that are now pending before the District Court for the District of Columbia captioned as follows: (1) U.S. ex rel. Wyman and Rothfeder v. HealthTrust, Columbia/HCA, et al., No. 99 - 3310 (D.D.C.)(formerly D.Utah); (2) U.S. ex rel. Health Outcomes Technologies v. Columbia Medical Center-East, et al., No. 99 - 3297 (D.D.C.)(formerly E.D.Pa.); (3) U.S. ex rel. McLendon v. Columbia Healthcare Corp., et al., No. 99-3295 (D.D.C.)(formerly N.D.Ga.); (4) U.S. ex rel. Cianci v. Columbia/HCA Healthcare Corp., et al., No. 99-2761-CIV-T-23E (formerly M.D. Fla.); (5) U.S. ex rel. Atchison v. Columbia/HCA Healthcare, Inc., No. 99-2399 (D.D.C.)(formerly M.D. Tenn.); CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 3 (6) U.S. ex rel. Atchison v. Columbia/HCA Healthcare, Inc., No. 99-3307 (D.D.C.)(formerly W.D.Tex.); (7) U.S. ex rel. Boston v. Columbia/HCA Healthcare Corp., No. 99-3301 (D.D.C.)(formerly N.D. Tex.); (8) U.S. ex rel. Christian, Long and Kuhn v. Columbia/HCA Healthcare Corp., et al., No. 99-3303 (D.D.C.)(formerly S.D. Tex.); (9) U.S. ex rel. Hampton v. Columbia/HCA Healthcare Corp., et al., No. 99-3294 (D.D.C.)(formerly M.D.Ga.); (10) U.S. ex rel. Ortega v. Columbia/HCA Healthcare Corp., et al., No. 99-3305 (D.D.C.)(formerly W.D.Tex.); (11) U.S. ex rel. Schilling v. Columbia/HCA Healthcare Corp., et al., Civ. No. 96-1264-CIV-T-23B (formerly M.D.Fla.); (12) U.S. ex rel. Rappaport v. Hospital Corporation of America et al., Civ. No. 99-3228 (formerly N.D. Ala.); (13) U.S. ex rel. Lanni v. Curative Health Services, Inc. et al., No. 00-2584 (D.D.C.)(formerly S.D.N.Y.). C. HCA submitted or caused to be submitted claims for payment to the Medicare Program (Medicare), Title XVIII of the Social Security Act, 42 U.S.C. ss.ss.1395-1395ggg, the Medicaid Program, 42 U.S.C. ss.ss.1396-1396v; the TRICARE Program CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 4 (hereinafter referred to as TRICARE), 10 U.S.C. ss.1071 - 1107,and the FEHBP, 5 U.S.C.ss.ss.8901 et seq. (collectively "the government health care programs"). D. The United States contends that it has certain civil claims under the False Claims Act, 31 U.S.C. ss.3729-33, and other federal statutes and/or common law doctrines, as specified in Paragraph 2 below, against HCA, for engaging in the following conduct (hereinafter referred to as the "Covered Conduct"). (1) OUTPATIENT LABORATORY BILLING From January 1, 1989 through December 31, 1997, HCA hospitals identified in Attachment 1 to this Agreement billed the government health care programs for outpatient laboratory tests designated by the CPT Codes in the 80000-89999 range, and by CPT Codes G0058, G0059 and G0060, without regard for whether they were medically necessary, had been properly ordered by physicians or were being billed appropriately. (2) DRG UPCODING From January 1, 1990 through December 31, 1997, HCA hospitals identified in Attachment 2 to this Agreement "upcoded" claims to the government health care programs for inpatient hospital admissions by assigning diagnosis codes that were not supported by physician documentation in the patients' medical records for the purpose of improperly increasing reimbursement on inpatient claims submitted for the following Diagnosis Related CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 5 Groups (DRGs): 076, 079, 087, 121, 124, 132, 138, 316, 416, and 475; and the complication and comorbidity DRGs ("cc" DRGs) identified in Attachment 3 to this Agreement. (3) HOME HEALTH COMMUNITY EDUCATION For cost report years 1994 through 1997, HCA submitted claims to Medicare for reimbursement of costs, including administrative and general costs, that it had allocated to community education activities. In fact, some of these costs were attributable to nonreimbursable advertising and marketing functions performed by home health community educators, including, but not limited to, patient care coordinators, home care coordinators, community liaisons and community liaison nurses. The conduct described in this Paragraph does not include claims, if any, submitted to Medicaid, TRICARE or FEHBP. (4) HOME HEALTH BILLING ISSUES Between January 1, 1995 and December 31, 1998, the HCA-owned home health agencies listed in Attachment 4 to this Agreement submitted claims to Medicare, Medicaid, and TRICARE (a) for visits to patients who did not qualify for home health services because (i) the patients were not homebound, (ii) there was no medical need for such services, or (iii) there was no medical need for skilled services; (b) for visits that were not provided; (c) for visits to deliver services that were in fact or should CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 6 have been provided by an assisted living facility; (d) for visits that lacked proper physician authorization because (i) the home health agency had not received physician orders prior to billing for services, (ii) the home health agency had not properly obtained the physician signature, (iii) the home health agency provided the services after expiration of the written order from the physician; and (e) for visits billed but not documented. The conduct described in this Paragraph does not include claims, if any, submitted to FEHBP. (5) HOME HEALTH MANAGEMENT FEES For cost report years 1993 through 1998, HCA improperly included in Medicare cost reports the management fee costs related to the acquisition of the Olsten, ResCare, AbleCare, CareOne and Central (a/k/a Simeone Central) home health agencies in Florida, Georgia and Alabama. The costs referred to in this Paragraph include all kickback, related party, undisclosed rebate and cost report claims relating to these acquisitions, but do not include duplicative services or non-allowable costs included in administrative and general costs not otherwise covered in this release allocated to the acquired agencies. The conduct described in this Paragraph does not include claims, if any, submitted to Medicaid, TRICARE or FEHBP. E. The United States also contends that it has certain administrative claims against HCA under the provisions CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 7 for permissive exclusion from the Medicare, Medicaid, and other Federal health care programs, 42 U.S.C. ss.1320a-7(b), the provisions for civil monetary penalties, 42 U.S.C. ss.1320a-7a, permissive exclusion from TRICARE, 32 C.F.R. ss.199.9, and permissive exclusion from FEHBP, 5 U.S.C. ss.8902a and 5 C.F.R. Part 970, for the Covered Conduct. F. The following States ("the States") contend that they have certain civil claims against HCA for the conduct specified in Paragraphs D (1)(outpatient laboratory), (2)(DRG upcoding) and (4)(home health billing) above: Alaska, Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, Missouri, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wyoming. HCA and the States will execute separate settlement agreements regarding these claims in exchange for the payment specified in Paragraph 1(b) below. G. The relators identified in Paragraph B above are among those who claim entitlement under 31 U.S.C. ss.3730(d) to a share of the proceeds of this Agreement, but the relators and the United States have not agreed on the entitlement or amount of that award, if any. This Agreement does not cover the claims of CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 8 any relator to payment of attorney's fees under 31 U.S.C. ss.3730(d). H. This Settlement Agreement does not constitute evidence or an admission by any party of any liability or wrongful conduct. I. HCA has executed letters of credit in favor of the United States in the total amount of one billion dollars ($1,000,000,000) pursuant to a February 1999 Letter of Credit Agreement (LOC Agreement). The LOC Agreement is incorporated herein by reference. J. HCA and OIG-HHS have executed a separate Corporate Integrity Agreement (CIA), which is incorporated herein by reference. K. To avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of the claims set forth above, the Parties hereby reach a full and final settlement of the claims against HCA pursuant to the Terms and Conditions set forth below. III. TERMS AND CONDITIONS NOW, THEREFORE, in reliance upon the representations contained herein, in consideration of the mutual promises, covenants, and obligations set forth below, and for good and valuable consideration as stated herein, the Parties agree as follows: CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 9 1. HCA agrees to pay to the United States and the States $745,000,000.00, plus interest accruing at a simple rate of 6.5% per annum from May 18, 2000 through and including the Payment Date (the Settlement Amount). The "Payment Date" shall be within five (5) days of approval of this Agreement by the United States District Court for the District of Columbia. HCA agrees to pay the Settlement Amount as follows: (a) HCA agrees to pay $731,367,246.23 plus interest accruing at a simple rate of 6.5% per annum from May 18, 2000 through and including the Payment Date to the United States by electronic funds transfer pursuant to written instructions to be provided by Michael F. Hertz, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice. The $731,367,246.23 represents the total of the following settlement amounts: $90,016,350 (outpatient laboratories); $395,567,650 (DRG upcoding); $50,000,000 (home health community education); $90,000,000 (home health management fees); $105,783,246.23 (home health billing). (b) HCA also agrees to pay the States $13,632,753.77, plus interest accruing at a simple rate of 6.5% per annum from May 18, 2000 through and including the Payment Date in a separate escrow, as designated by the States, for distribution to the individual States upon completion of the separate State settlement agreements. CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 10 2. Subject to the exceptions in Paragraph 10 below, in consideration of the obligations of HCA set forth in this Agreement, conditioned upon HCA's payment in full of the Settlement Amount, the United States (on behalf of itself, its officers, agents, agencies, and departments) agrees to release HCA together with its current and former parent corporations, each of its direct and indirect subsidiaries, brother or sister corporations, divisions, current or former owners and affiliates, and the successors and assigns of any of them from any civil or administrative monetary claim the United States has or may have under the False Claims Act, 31 U.S.C. ss.ss.3729-3733; the Civil Monetary Penalties Law, 42 U.S.C. ss.1320a-7a; the Program Fraud Civil Remedies Act, 31 U.S.C. ss.ss.3801-3812; or the common law theories of payment by mistake, unjust enrichment, breach of contract, and fraud, for the Covered Conduct. 3. On the Payment Date, conditioned upon receipt of the Settlement Amount, the LOC Agreement is hereby amended as follows: (a) The unconditional guarantee by the Company (as defined in the LOC Agreement) of the Obligations (as defined in the LOC Agreement) in the form of the Letters of Credit (as defined in the LOC Agreement), and the aggregate amount which may be drawn under the Letters of Credit by the United States, shall be two hundred fifty million dollars ($250,000,000) rather than one billion dollars ($1,000,000,000). CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 11 (b) Upon receipt by the United States of any payment made in satisfaction of any of the Obligations following the Payment Date, whether pursuant to an Actionable Order or Settlement Agreement (as such terms are defined in the LOC Agreement) and including any payment made through a drawing under any Letter of Credit, the unconditional guarantee by the Company of the Obligations in the form of the Letters of Credit, and the aggregate amount which may be drawn under the Letters of Credit by the United States, shall immediately be reduced dollar-for-dollar by the amount of such payment. Reductions pursuant to this clause (b) shall be cumulative and in addition to the reduction described in clause (a) above. For purposes of this clause (b), a payment shall be deemed made in satisfaction of an obligation only if acknowledged in writing as such by the United States or if made through a drawing under a Letter of Credit. (c) In connection with any reduction of the Company's guarantee of the Obligations described in clause (a) or (b) above, the Company may elect to replace the then outstanding Letter(s) of Credit with one or more new Letter(s) of Credit in an amount at least equal to the reduced amount of the Company's guarantee set forth in clause (a) or (b) (as applicable), so long as the new Letter(s) of Credit are issued by a Letter of Credit issuer acceptable under Paragraph 2 of the LOC Agreement. The replaced Letter(s) of Credit shall be returned for cancellation CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 12 to the Company in exchange for the replacement Letter(s) of Credit. HCA and the United States acknowledge that the foregoing agreement to replace the Company's unconditional guaranty of the Obligations in the form of the Letters of Credit on the Payment Date with two hundred fifty million dollars ($250,000,000) rather than one billion dollars ($1,000,000,000) is not based on the amount or expected amount of HCA's remaining liability for conduct not addressed by this Agreement. 4. This Agreement is expressly conditioned upon resolution, through execution of plea agreement(s) or otherwise, of the Company's corporate criminal liability, with the Department of Justice (the Criminal Condition) as set forth in the Plea Agreement executed on December 14, 2000. As used in this Paragraph, the term "resolution" includes, where appropriate, acceptance by the appropriate court(s) of any plea agreement(s) and imposition of any sentence(s) necessary to effectuate the Criminal Condition. 5. After the execution of this Agreement, the United States and HCA will move the United States District Court for the District of Columbia for (1) dismissal with prejudice of the claims against HCA in the Civil Actions identified in Paragraph B (1) - (4) above; and (2) dismissal with prejudice of those claims against HCA in the Civil Actions identified in Paragraph B (5) - (13) above that are co-extensive with the Covered Conduct. CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 13 The motions to dismiss will be conditioned upon receipt by the United States of the Settlement Amount. The claims that the United States and HCA agree are co-extensive with the Covered Conduct are identified in Attachment 5 to this Agreement, incorporated by reference herein. The parties agree that they reserve the right to seek to dismiss any claim of any relator other than those identified on the grounds they are coextensive with the Covered Conduct or are otherwise barred. The United States also agrees to use reasonable good faith efforts to cause the dismissal or release of any claims filed by relators (with prejudice to relators but without prejudice to the United States) in the Civil Actions identified in Paragraph B (5) - (13) above that: 1) relate to home health community education claims (as described in Paragraph D (3) above) submitted to Medicaid, TRICARE or FEHBP; 2) relate to home health billing claims (as described in Paragraph D (4) above) submitted to FEHBP; and 3) relate to home health management fees claims (as described in Paragraph D (5) above) submitted to Medicaid, TRICARE or FEHBP. 6. Should this Agreement be challenged by any relator as not fair, adequate or reasonable pursuant to 31 U.S.C. ss.3730(c)(2)(B), the United States and HCA agree that they will take all reasonable and necessary steps to defend this Agreement. 7. In consideration of the obligations of HCA set forth in this Agreement and the CIA, conditioned upon HCA's payment in full of the Settlement Amount, the OIG-HHS agrees to CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 14 release and refrain from instituting, directing or maintaining any administrative action seeking exclusion from the Medicare, Medicaid, or other Federal health care programs (as defined in 42 U.S.C. ss.1320a-7b(f)) against HCA under 42 U.S.C. ss.1320a-7a (Civil Monetary Penalties Law), or 42 U.S.C. ss.1320a-7(b)(7) (permissive exclusion for fraud, kickbacks, and other prohibited activities), for the Covered Conduct, except as reserved in Paragraph 10, below, and as reserved in this Paragraph. The OIG-HHS expressly reserves all rights to comply with any statutory obligations to exclude HCA together with its current and former parent corporations, each of its direct and indirect subsidiaries, brother or sister corporations, divisions, current or former owners, affiliates, and the successors and assigns of any of them from the Medicare, Medicaid, or other Federal health care program under 42 U.S.C. ss.1320a-7(a)(mandatory exclusion) based upon the Covered Conduct. 8. In consideration of the obligations of HCA set forth in this Agreement, conditioned upon HCA's payment in full of the Settlement Amount, TMA agrees to release and refrain from instituting, directing, or maintaining any administrative action seeking exclusion from the TRICARE/CHAMPUS Program against HCA under 32 C.F.R. ss.199.9 for the Covered Conduct, except as reserved in Paragraph 10, below, and as reserved in this Paragraph. TMA expressly reserves authority to exclude HCA together with its current and former parent corporations, each of CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 15 its direct and indirect subsidiaries, brother or sister corporations, divisions, current or former owners, affiliates, and the successors and assigns of any of them, from the TRICARE/CHAMPUS program under 32 C.F.R. ss.ss.199.9 (f)(1)(i)(A), (f)(1)(i)(B), and (f)(1)(iii), based upon the Covered Conduct. 9. In consideration of the obligations of HCA set forth in this Agreement, conditioned upon HCA's payment in full of the Settlement Amount, OPM agrees to release and refrain from instituting, directing, or maintaining any administrative action seeking exclusion from the FEHBP program against HCA under 5 U.S.C. ss.8902a or 5 C.F.R. Part 970 for the Covered Conduct, except as reserved in Paragraph 10, below and except if excluded by the OIG-HHS pursuant to 42 U.S.C. ss.1320a-7(a). 10. Notwithstanding any term of this Agreement, specifically reserved and excluded from the scope and terms of this Agreement as to any entity or person (including HCA and Relators) are any and all of the following claims of the United States: a. Any civil, criminal or administrative liability to the United States arising under Title 26, U.S. Code (Internal Revenue Code); b. Any criminal liability; c. Except as explicitly stated in this Agreement, any administrative liability, including mandatory exclusion from Federal health care programs; CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 16 d. Any liability to the United States (or its agencies) for any conduct other than the Covered Conduct; e. Any claims of the United States based upon such obligations as are created by this Agreement; f. Any claims by FEHBP for the Covered Conduct identified in Paragraph D(3) (home health community education), (4) (home health billing), and (5) (home health management fees) above. g. Any claims by TRICARE/CHAMPUS for the Covered Conduct identified in Paragraph D(3) (home health community education) and (5) (home health management fees) above. h. Any claims by the United States or the States relating to the Medicaid Program for the Covered Conduct identified in Paragraph D(3) (home health community education) and (5) (home health management fees) above. i. Any express or implied warranty claims or other claims for defective or deficient products or services, including quality of goods and services, provided by HCA; j. Any claims for personal injury or property damage or for other similar consequential damages arising from the Covered Conduct; k. Any claims of the United States based on a failure to deliver items or services due (with the exception of home health services that the United States alleges were not provided, as described in Paragraph D(4)); CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 17 l. Any civil or administrative claims of the United States against individuals (including current or former directors, officers, employees, agents, or shareholders of HCA). 11. HCA has entered into a Corporate Integrity Agreement (CIA) with HHS, attached as Attachment 6, which is incorporated into this Agreement by reference. HCA will implement its obligations under the CIA immediately upon the execution of this Agreement. 12. HCA waives and will not assert any defenses HCA may have to any criminal prosecution or administrative action relating to the Covered Conduct, which defenses may be based in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution, this Settlement bars a remedy sought in such criminal prosecution or administrative action. HCA agrees that this settlement is not punitive in purpose or effect. Nothing in this Paragraph or any other provision of this Agreement constitutes an agreement by the United States concerning the characterization of the Settlement Amount for purposes of the Internal Revenue Laws, Title 26 of the United States Code. 13. HCA fully and finally releases the United States, its agencies, employees, servants, and agents from any claims (including attorney's fees, costs, and expenses of every kind and however denominated) which HCA has asserted, could have asserted, CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 18 or may assert in the future against the United States, its agencies, employees, servants, and agents, related to the Covered Conduct and the United States' investigation and prosecution thereof. 14. The Settlement Amount will not be decreased as a result of the denial of claims for payment now being withheld from payment by any Medicare carrier or intermediary or by FEHBP or TRICARE or any State payer, related to the Covered Conduct; and HCA agrees not to resubmit to any Medicare carrier or intermediary or to FEHBP or TRICARE or any State payer any previously denied claims related to the Covered Conduct, and agrees not to appeal any such denials of claims. 15. HCA agrees to the following: (a) Unallowable Costs Defined: HCA agrees that all costs (as defined in the Federal Acquisition Regulations (FAR) 48 C.F.R. ss.31.205-47 and in Titles XVIII and XIX of the Social Security Act, 42 U.S.C. ss.ss.1395-1395ggg and 1396-1396v, and the regulations promulgated thereunder) incurred by or on behalf of HCA, its present or former officers, directors, employees, shareholders, and agents in connection with: (1) the matters covered by this Agreement and any related plea agreement, CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 19 (2) the Government's audit(s) and civil and any criminal investigation(s) of the matters covered by this Agreement, (3) HCA's investigation, defense, and corrective actions undertaken in response to the Government's audit(s) and civil and any criminal investigation(s) in connection with the matters covered by this Agreement (including attorney's fees and the obligations undertaken pursuant to the CIA incorporated in this Agreement), (4) the negotiation and performance of this Agreement and any Plea Agreement, and (5) the payment HCA makes to the United States pursuant to this Agreement and any payments that HCA may make to relators, are unallowable costs on Government contracts and under the Medicare Program, Medicaid Program, TRICARE Program, and Federal Employees Health Benefits Program (FEHBP). (All costs described or set forth in this Paragraph 15(a) are hereafter, "unallowable costs"). (b) Future Treatment of Unallowable Costs: These unallowable costs will be separately estimated and accounted for by HCA, and HCA will not charge such unallowable costs directly or indirectly to any contracts with the United States or any State Medicaid Program, or seek payment for such unallowable CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 20 costs through any cost report, cost statement, information statement, or payment request submitted by HCA or any of its subsidiaries to the Medicare, Medicaid, TRICARE, or FEHBP Programs. (c) Treatment of Unallowable Costs Previously Sought: HCA further agrees that within 60 days of the effective date of this Agreement it will identify to applicable Medicare and TRICARE fiscal intermediaries, carriers, and/or contractors, and Medicaid, VA and FEHBP fiscal agents, any unallowable costs (as defined in this Paragraph) included in payments previously sought from the United States, or any State Medicaid Program, including, but not limited to, payments sought in any cost reports, cost statements, information reports, or payment requests already submitted by HCA or any of its subsidiaries, and will request, and agree, that such cost reports, cost statements, information reports, or payment requests, even if already settled, be adjusted to account for the effect of the inclusion of the unallowable costs. HCA agrees that the United States will be entitled to recoup from HCA any overpayment as a result of the inclusion of such unallowable costs on previously-submitted cost reports, information reports, cost statements, or requests for payment. Any payments due after the adjustments have been made shall be paid to the United States pursuant to the direction of the Department of Justice, and/or the affected agencies. The CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 21 United States reserves its rights to disagree with any calculations submitted by HCA or any of its subsidiaries on the effect of inclusion of unallowable costs (as defined in this Paragraph) on HCA or any of its subsidiaries' cost reports, cost statements, or information reports. Nothing in this Agreement shall constitute a waiver of the rights of the United States to examine or reexamine the unallowable costs described in this Paragraph. 16. HCA agrees to cooperate fully and completely with the United States in any criminal, civil and/or administrative investigations and proceedings of any present and former officers, directors, employees and agents, and of any parties with whom it had or has a business or professional relationship with respect to the Covered Conduct. HCA will itself provide information through testimony and/or oral briefings by competent corporate representatives upon request of the United States. HCA will furnish to the United States, upon reasonable request, complete and un-redacted copies of all non-privileged documents, reports, memoranda of interviews, and records in its possession, custody, or control concerning any investigation of the Covered Conduct which it has undertaken, or which has been performed by others on its behalf, and agrees that it will not assert any claim of privilege with respect to information requested by the United States to establish the authenticity or evidentiary CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 22 foundation for the non-privileged information it has provided. HCA agrees not to impair, and, upon reasonable notice, will encourage, the cooperation of its directors, officers, employees and agents in any investigation of the Covered Conduct. HCA also agrees to use its best efforts to make available, and encourage the cooperation of, former directors, officers and employees for interviews and testimony, consistent with the rights and privileges of such individuals in any investigation of the Covered Conduct. The obligations referred to in this Paragraph shall in no way limit HCA's obligations under any other agreement with the United States or the States, including, but not limited to, the Plea Agreement that HCA is entering with the United States. 17. This Agreement is intended to be for the benefit of the Parties and the States only, and by this instrument the Parties and the States do not release any claims against any other person or entity, except to the extent specifically provided for in this Agreement. 18. HCA agrees that it will not seek payment for any of the health care billings covered by this Agreement from any health care beneficiaries or their parents or sponsors. HCA waives any causes of action against these beneficiaries or their sponsors or responsible parties based upon the claims for payment covered by this Agreement. CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 23 19. Except as may be expressly provided to the contrary in this Agreement, each party to this Agreement will bear its own legal and other costs incurred in connection with this matter, including the preparation and performance of this Agreement. 20. This Agreement is governed by the laws of the United States. The Parties agree that the exclusive jurisdiction and venue for any dispute arising between and among the Parties under this Agreement will be the United States District Court for the District of Columbia, except that disputes arising under the Corporate Integrity Agreement shall be resolved exclusively under the dispute resolution provisions in the Corporate Integrity Agreement and disputes arising under the separate agreements with the States shall be governed by the relevant provisions of those agreements. 21. This Agreement may not be amended except by written consent of the Parties, except that only HCA and OIG-HHS must agree in writing to modification of the Corporate Integrity Agreement. 22. The undersigned individuals signing this Agreement on behalf of HCA represent and warrant that they are authorized by HCA to execute this Agreement. The undersigned United States signatories represent that they are signing this Agreement in CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 24 their official capacities and that they are authorized to execute this Agreement. 23. This Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same agreement. 24. This Agreement is binding on HCA's successors, transferees, heirs, and assigns. 25. This Agreement is effective on the date of signature of the last signatory to the Agreement. Facsimiles of signatures shall constitute acceptable, binding signatures for purposes of this Settlement Agreement. CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 25 THE UNITED STATES OF AMERICA DATED: December 14, 2000 BY: /s/ Joyce R. Branda ----------------------------- ---------------------------- JOYCE R. BRANDA DEPUTY DIRECTOR COMMERCIAL LITIGATION BRANCH CIVIL DIVISION U.S. DEPARTMENT OF JUSTICE CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 26 DATED: 12/13/00 BY: /s/ LEWIS MORRIS ----------------------------- ---------------------------- LEWIS MORRIS ASSISTANT INSPECTOR GENERAL OFFICE OF COUNSEL TO THE INSPECTOR GENERAL OFFICE OF INSPECTOR GENERAL UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 27 DATED: 12/12/00 BY: /s/ ROBERT L. SHEPHERD ----------------------------- ---------------------------- ROBERT L. SHEPHERD DEPUTY GENERAL COUNSEL TRICARE MANAGEMENT ACTIVITY UNITED STATES DEPARTMENT OF DEFENSE CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 28 DATED: 12-13-00 BY: /s/ William E. Flynn III ----------------------------- ---------------------------- WILLIAM E. FLYNN III ASSOCIATE DIRECTOR FOR RETIREMENT AND INSURANCE SERVICE UNITED STATES OFFICE OF PERSONNEL MANAGEMENT CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 29 DATED: 12-14-01 BY: /s/ E. Jeremy Hutton ----------------------------- ---------------------------- E. JEREMY HUTTON ASSISTANT INSPECTOR GENERAL FOR LEGAL AFFAIRS UNITED STATES OFFICE OF PERSONNEL MANAGEMENT CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA 30 HCA - The Healthcare Company DATED: 12/14/00 BY: /s/ Robert A. Waterman ----------------------------- ---------------------------- ROBERT A. WATERMAN GENERAL COUNSEL HCA DATED: 12/14/00 BY: /s/ Cathryn L. Sowers ----------------------------- ---------------------------- CATHRYN L. SOWERS VICE PRESIDENT LITIGATION HCA DATED: 12/14/00 BY: /s/ Roger S. Goldman ----------------------------- ---------------------------- ROGER S. GOLDMAN LATHAM & WATKINS COUNSEL FOR HCA DATED: 12/14/00 BY: /s/ Craig Holden ----------------------------- ---------------------------- S. CRAIG HOLDEN OBER, KALER, GRIMES & SHRIVER COUNSEL FOR HCA CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT BETWEEN U.S. & HCA EX-99.3 4 g66041ex99-3.txt PLEA AGREEMENT 1 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 2 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: 3 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); 4 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, 5 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 6 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 7 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 8 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 9 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 10 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 11 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 12 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 13 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 14 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 15 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 16 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 17 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 18 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 19 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 20 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 20 21 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 EX-99.4 5 g66041ex99-4.txt INTEGRITY AGREEMENT 1 EXHIBIT 99.4 CORPORATE INTEGRITY AGREEMENT BETWEEN THE OFFICE OF INSPECTOR GENERAL OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES AND HCA-THE HEALTHCARE COMPANY I. PREAMBLE HCA--The Healthcare Company ("HCA") hereby enters into this Corporate Integrity Agreement ("CIA") with the Office of Inspector General ("OIG") of the United States Department of Health and Human Services ("HHS") to promote compliance by itself, its subsidiaries, and their employees, contractors, agents, and physicians with the requirements of Medicare, Medicaid and all other Federal health care programs (as defined in 42 U.S.C. ss. 1320a-7b(f))(hereinafter collectively referred to as the "Federal health care programs.") This CIA shall be applicable only to those operations of HCA that are subject to United States law and regulations. HCA's compliance with the terms and conditions in this CIA shall constitute an element of HCA's present responsibility with regard to participation in the Federal health care programs. Whenever the term "HCA" is used in this CIA, it includes all of HCA's subsidiaries, as defined in this agreement. Contemporaneously with this CIA, HCA is entering into a Settlement 1 2 Agreement with the United States, and this CIA is incorporated by reference into the Settlement Agreement. HCA currently operates an Ethics and Compliance Program, which HCA agrees to operate in a manner consistent with the terms of this CIA. II. TERM OF THE CIA AND DEFINITIONS A. Term. The period of the compliance obligations assumed by HCA under this CIA shall be eight years from the effective date of this CIA (unless otherwise specified). The effective date of this CIA shall be the date that the court(s) accept the plea(s) and impose a sentence in the criminal proceedings related to the plea agreement entered into between HCA and the United States on or about the date of the signing of this CIA. Sections VII, VIII, IX, X and XI of this CIA shall remain in effect until OIG has completed its review of the final annual report and any additional materials submitted by HCA pursuant to OIG's request. The compliance obligations of the Corporate Integrity Agreement in place for Lanier Park Hospital in Gainesville, Georgia, shall not apply to the time period beginning on the effective date of this CIA (sections II.D, II.E, III, V, and VI of the Lanier Park CIA shall remain in effect until OIG has completed its review of the most recent annual report and any additional materials submitted by HCA pursuant to OIG's request), and upon the effective date of this CIA Lanier Park Hospital shall be subject to the provisions of this CIA to the same extent as other HCA facilities. 2 3 B. Definitions. For the purposes of this CIA, the following terms have the following meanings. 1. Covered Person: (a) any officer, director, or employee of HCA or any of its subsidiaries; or (b) any agent or other individual who furnishes health care items or services to any Federal health care program beneficiary at a facility owned or operated by HCA or any of its subsidiaries for which HCA or any of its subsidiaries claims reimbursement from any Federal health care program. Notwithstanding the above, this term does not include part-time or per diem employees, agents or other individuals who are not reasonably expected to work more than 160 hours per year, except that any such individuals shall become "Covered Persons" at the point when they work more than 160 hours during the calendar year. 2. Subsidiary: any corporation or other entity that provides items or services for which payment may be made by any Federal health care program, or prepares or submits requests for such payment, and in which HCA (i) has at least a 50% ownership interest, or (ii) has at least a 5% ownership interest and either manages or controls. 3. Covered Contractor: any agent or other individual (who is not a covered person) who prepares claims, cost reports, or other requests for reimbursement from any Federal health care program on behalf of HCA or any of its subsidiaries on a regular basis (i.e., for more than 80 hours within the calendar year). 3 4 III. CORPORATE INTEGRITY OBLIGATIONS HCA shall ensure that its Ethics and Compliance Program includes the following elements during the term of this CIA. A. Compliance Officers and Committees. 1. Ethics, Compliance and Corporate Responsibility Committee of the Board of Directors. HCA currently has an Ethics, Compliance and Corporate Responsibility Committee of the Board of Directors ("Board Committee") comprised of five outside directors of HCA. The Board Committee is responsible for the review of matters related to the Ethics and Compliance Program, this CIA, and compliance with requirements of Federal health care programs. The Board Committee shall meet at least quarterly. When new members of the Board Committee are appointed or the responsibilities or authorities of the Board Committee are substantially changed, HCA shall notify the OIG, in writing, within 15 days of such a change. 2. Senior Vice President for Compliance. HCA currently has a Senior Vice President for Ethics, Compliance, and Corporate Responsibility ("SVP- Compliance"). The SVP-Compliance is and shall be responsible for developing and implementing policies, procedures, and practices designed to ensure compliance with the requirements set forth in this CIA and with the requirements of the Federal health care programs. The SVP-Compliance is and shall be a member of senior management of HCA, shall make 4 5 regular (at least quarterly) reports regarding compliance matters directly to the CEO and/or to the Board of Directors (including the Board Committee) of HCA, and shall be authorized to report to the Board of Directors (including the Board Committee) at any time. The SVP-Compliance shall be responsible for monitoring the day-to-day activities engaged in by HCA to further its compliance objectives as well as for any reporting obligations created under this CIA. In the event a new SVP- Compliance is appointed or the responsibilities or authorities of the SVP-Compliance are substantially changed, HCA shall notify the OIG, in writing, within 15 days of such a change. 3. Ethics, Compliance and Corporate Responsibility Department. HCA currently has an Ethics, Compliance and Corporate Responsibility Department ("EC Department"). The EC Department is managed by the SVP-Compliance and is responsible for the operation of the Ethics and Compliance Program and for compliance with the requirements of this CIA and of the Federal health care programs. In the event the responsibilities or authorities of the EC Department are substantially changed, HCA shall notify the OIG, in writing, within 15 days of such a change. 4. Local Ethics and Compliance Officers. HCA currently has a Local Ethics and Compliance Officer ("ECO") at each of its facilities (for the purpose of this CIA, a "facility" is any hospital, ambulatory surgery center, clinic or group of clinics, or other location where health care items or services are provided by HCA or one of its 5 6 subsidiaries). Each ECO shall have sufficient management responsibility so as permit the effective performance of his or her duties. Each ECO is responsible for implementation and oversight of the Ethics and Compliance Program at the facility and for the facility's compliance with the requirements of this CIA and of the Federal health care programs. HCA shall make proper execution of ECO duties a major component of the performance evaluations of ECOs. HCA shall continually assess the effectiveness of ECOs and the methods and findings of any such assessments shall be made available to the OIG upon request. HCA shall not implement any substantial change in the responsibilities or authorities of the ECOs relating to HCA's Ethics and Compliance Program without prior written approval from the OIG. 5. Corporate Ethics and Compliance Committees. HCA currently has a Corporate Ethics and Compliance Steering Committee ("Compliance Steering Committee"). The Compliance Steering Committee is chaired by the SVP-Compliance and includes the Corporate CEO, COO, the two group presidents, and certain senior vice presidents. The Compliance Steering Committee oversees the effectiveness of the Ethics and Compliance Program and makes decisions on investments in the Program. The Compliance Steering Committee shall be responsible for overseeing the implementation of the requirements of this CIA. HCA also currently has a Corporate Ethics and Compliance Policy Committee ("Compliance Policy Committee"). The Compliance 6 7 Policy Committee is chaired by the SVP-Compliance and includes the group CFOs, three hospital presidents, a number of senior vice presidents, e.g., Internal Audit, General Counsel, Quality, Information Systems, Human Resources, Government Programs, and executives representing major compliance areas, such as coding, billing, physician relationships, and cost reports. The Compliance Policy Committee reviews and approves all compliance-related policies. The two committees shall conduct at least 12 meetings per year in aggregate. The committees shall keep a record of their proceedings that shall be available to the OIG upon request. 6. Hospital Compliance Committees. Each Hospital shall have a Hospital Ethics and Compliance Committee ("Hospital Committee"). The Hospital Committee shall be chaired by the ECO of the facility and include the heads of each of the facility's major compliance-related departments. The Hospital Committee shall be responsible for assisting the ECO in implementing the Ethics and Compliance Program, and ensuring compliance by the facility with this CIA and the requirements of Federal health care programs. The Hospital Committee shall also be responsible for reporting on compliance issues to the ECO. 7. Responsible Executives. HCA has designated certain individuals ("Responsible Executives") to be responsible for development and implementation of a portion of the Ethics and Compliance Program related to a specific compliance risk area. 7 8 For example, the Vice President, Health Information Management Services, is the Responsible Executive for coding compliance. The Responsible Executives work with the SVP-Compliance, EC Department, Compliance Policy Committee, and others to develop, oversee, monitor, and implement compliance policies within their designated areas of responsibility. HCA shall not discontinue or materially alter its current Responsible Executive structure without written approval from the OIG. B. Written Standards. 1. Code of Conduct. HCA currently has a Code of Conduct. HCA has implemented a program to distribute the Code of Conduct to covered persons. HCA shall make the promotion of, and adherence to, the Code of Conduct an element in evaluating the performance of managers, supervisors, and all other employees. HCA has implemented a program to obtain an acknowledgment from each covered person that he or she has received HCA's Code of Conduct and understands that it represents the mandatory policies of the organization. Within 90 days of the effective date of this CIA, HCA shall obtain a certification from each of its facilities and corporate departments that, based on information and belief, this distribution and acknowledgment process is complete. New covered persons shall receive the Code of Conduct and shall complete the required acknowledgment within 30 days after becoming a covered person. HCA shall annually review the Code of Conduct and shall make any necessary revisions. These 8 9 revisions shall be distributed as expeditiously as possible after initiating such a change and no later than 30 days after the effective date of the revised Code of Conduct. HCA shall implement a program to obtain an acknowledgment from each covered person that he or she has received the revised Code of Conduct, understands that it represents the mandatory policies of the organization, and agrees to abide by it. Within 90 days of the effective date of the revised Code of Conduct, HCA shall obtain a certification from each of its facilities and corporate departments that, based on information and belief, this distribution and acknowledgment process is complete. HCA shall obtain the acknowledgments and certifications described in the preceding two sentences every time that a revised Code of Conduct is distributed (but in any event no less frequently than every three years). 2. Covered Contractor Requirements. HCA shall require a Covered Contractor to: (a) agree to abide by HCA's Code of Conduct or adopt its own Code of Conduct substantially similar to HCA's Code of Conduct; (b) distribute either (i) HCA's Code of Conduct or (ii) its Code of Conduct and information about HCA's Confidential Disclosure Program (including the Ethics Line number) to employees working on HCA matters; and, (c) certify to HCA that employees working on HCA matters have received a copy of (i) HCA's Code of Conduct or (ii) its Code of Conduct and information about HCA's Confidential Disclosure Program (including the Ethics Line number). Where the 9 10 Covered Contractor is a solo practitioner, the Covered Contractor must be provided with HCA's Code of Conduct and certify that he or she will abide by it. 3. Policies and Procedures. HCA is developing written compliance Policies and Procedures. Prior to the effective date of this CIA, HCA has implemented many such Policies and Procedures and provided them to the OIG. HCA shall assess and update as necessary the Policies and Procedures at least annually and more frequently, as appropriate. HCA shall provide a summary of changes to its Policies and Procedures in its Annual Reports under this CIA and the current Policies and Procedures shall continue to be available to OIG upon request. HCA represents that it has distributed its Policies and Procedures to its facilities. Compliance staff at both the facilities and the corporate headquarters, including the Responsible Executives, shall be available to explain any and all Policies and Procedures. C. Training and Education. HCA shall meet the following training requirements. The training requirements are cumulative (not exclusive) so that one person may be required to attend training in several substantive areas in addition to the general training. All training requirements set forth below in paragraphs 1 to 5 shall be implemented as specified below. With respect to the initial training required to be provided within a certain time period after the effective date of this CIA, HCA need not provide such training to persons who have received training in the six-month period prior to the 10 11 effective date of this CIA, if the training provided meets all the subject matter and duration requirements that would apply to the initial training under the CIA. 1. General Training. HCA shall provide at least two hours of training initially (within 90 days of the effective date of this CIA) to each covered person, and one hour of refresher training annually thereafter. The training shall cover HCA's Ethics and Compliance Program, its Code of Conduct, and the requirements of this CIA. The training conducted by HCA when it issued its Code of Conduct, One Clear Voice, and its ethics and compliance refresher training, Commitments We Share, and/or its revised Code of Conduct, A Tradition of Caring, (all of which explained HCA's Ethics and Compliance Program and its Code of Conduct) regardless of the date the training occurred will satisfy this requirement for training within 90 days notwithstanding the fact that such training did not cover the CIA. Covered persons who have received prior training described in the previous sentence must receive at least one hour of refresher training (including discussion of the CIA) during the first year covered by the CIA and annually thereafter. Within 90 days after the effective date of this CIA, HCA shall notify all covered persons of the execution of the CIA and provide a summary of the key provisions of this CIA through electronic mail, its internet and/or intranet sites, newsletters, and other appropriate means. All general training conducted after the effective date of this CIA shall include training on the CIA. 11 12 2. Coding Training. HCA shall continue to have in place an introductory training course for each hospital inpatient coder, as well as an intermediate coding course. HCA shall provide at least eight hours of coding training to inpatient hospital coders and supervisors within 180 days of the effective date of this CIA. HCA shall maintain its DRG coding course for hospital inpatient coders accessible through its intranet. HCA shall maintain and enforce its current policy requiring 30 hours of continuing education annually for hospital inpatient coders. 3. Billing Training. HCA shall provide training to all individuals (including Laboratory and Business Office Directors and other billing personnel) responsible for Federal health care program billing in their facilities. HCA shall provide at least eight hours of such training within 180 days of the effective date of this CIA and during each subsequent year. The training shall include the following subject matters: a. the submission of accurate bills for services rendered to Federal health care program beneficiaries; b. policies, procedures and other requirements applicable to the documentation of medical records; c. the personal obligation of each individual involved in the billing process to ensure that such billings are accurate; 12 13 d. applicable reimbursement statutes, regulations, and program requirements and directives; e. the legal sanctions for improper billings; and f. examples of proper and improper billing practices. 4. Cost Report Training. HCA shall ensure that covered persons who prepare cost reports receive at least eight hours of training on preparation of cost reports for Federal health care programs within 180 days of the effective date of this CIA. HCA shall maintain and enforce its current practice requiring 40 hours of continuing education annually to include Federal and/or state statutes, regulations, and guidelines, compliance, and Corporate policies for covered persons who prepare cost reports. 5. Physician Relations Training. Within 90 days of the effective date of this CIA and annually thereafter, HCA shall provide at least one hour of training to its Hospital CEOs, CFOs, and all other personnel substantially involved in negotiating or monitoring physician relationships on the statutes and regulations related to hospital/physician relationships (including but not limited to 42 U.S.C. ss.ss. 1320a-7b(b) and 1395nn). HCA shall annually distribute its physician relationship policy checklist to such personnel. 6. Overall Compliance Training. HCA shall continue its process of establishing individual training profiles for its employees. HCA shall pursue the 13 14 implementation of these training profiles in order to ensure that all covered persons are familiar with areas of compliance risk relevant to their positions. 7. New Persons. Affected new covered persons shall receive the General Training described in section III.C.1 above by the end of the first 30 days after the person begins work. The orientation training (which is defined as all other training required, under section III.C, to be accomplished within 180 days or less after the effective date of this CIA) required by this CIA shall also be promptly provided to appropriate new covered persons (but in no event later than 90 days after the person begins work on the matter for which they must be trained) so that the persons are fully qualified by virtue of such training to perform whatever responsibilities may be assigned to them. In any situation where training requirements have not been completed, a fully trained HCA employee shall carefully monitor the work of the untrained person. 8. Covered Contractor Requirements. HCA must document completion of the applicable coding, billing, cost report, or physician relationships training to employees of Covered Contractors working on HCA matters if: (i) the Covered Contractor is a solo-practitioner; (ii) the Covered Contractor was not retained because of its professional expertise in the area for which training is necessary; or (iii) the Covered Contractor has not complied with the requirements of section III.B.2. HCA is responsible for ensuring the expertise and compliance of Covered Contractors. 14 15 9. Certifications and Retention. HCA shall maintain sufficient records to demonstrate that the required training has occurred. These records shall include certifications from covered persons that they have attended the required training. The certifications may be acquired through: attendance/sign-in sheets for in-person group training sessions; computer attestations for computer-based training; or similar mechanisms for other forms of training. Facility ECOs and/or Responsible Executives shall retain training records and certifications in a manner that permits reporting to the SVP-Compliance to enable the SVP-Compliance to report on the training, and provide the specific course materials and certifications, to the OIG upon request. D. Review Procedures. 1. Retention of Independent Review Organization. HCA shall retain an entity (or entities), such as an accounting, auditing or consulting firm (hereinafter "Independent Review Organization" or "IRO"), to perform review procedures to assist HCA in assessing the adequacy of its Policies and Procedures, Ethics and Compliance Program, its compliance with this CIA, and its compliance with the requirements of Federal health care programs. The reviews shall be performed annually during the term of the CIA in accordance with the attached workplans. These reviews shall cover the calendar years 2001 through 2008, unless otherwise specified in a workplan. The Independent Review Organization used for each review must have expertise in the 15 16 matters to be reviewed and particularly with the requirements of the Federal health care programs relevant to that area of review. The Independent Review Organization must be retained to conduct the reviews for the first year within 90 days of the effective date of this CIA. An IRO may engage qualified sub-IROs (including, as appropriate, law firms), as necessary and HCA shall have the right to designate a different IRO for any particular area of compliance concern if it believes that such different IRO would be better qualified to undertake a particular focused review. HCA shall have the right to designate a new IRO at any time it chooses. If HCA designates a new IRO, it shall provide written notice to the OIG within 15 days of designating the new IRO. This written notice will include the following: (a) the name, address, and primary contact person at the new IRO; (b) a brief description of the qualifications of the new IRO; and (c) a brief description of the reasons that a new IRO was designated. 2. Types of Reviews. The IRO(s) and HCA appropriate internal resources or directed external resources shall annually perform the reviews described in the audit work plans ("workplans") attached to, and incorporated by reference into, this CIA. The workplans address the following areas: (1) Diagnosis Related Groups (DRGs); (2) Laboratory Billing; (3) Outpatient Prospective Payment; and (4) Physician Relationships. The workplans require reviews of systems and processes in place at HCA and its facilities, and of claims submitted by HCA and paid by Federal health care programs (the 16 17 physician relationship workplan includes review of physician relationships rather than claims). The reviews of claims more specifically described in the workplans fall into two general categories: (1) probe samples of a set number of claims (with no pre-determined statistical confidence or precision parameters); and (2) full samples of claims from which an overpayment amount can be projected to the total population of claims in question within pre-determined statistical confidence and precision parameters. HCA and the IRO will evaluate the IRO work plans annually based upon prior year results. If appropriate, HCA will submit revised IRO work plan(s) to the OIG for its review and action. 3. Statistical Sampling and Appraisal Methodologies for Reviews. All matters related to this CIA and the workplans that involve statistical sampling or appraisal, or the review of claims, including probe samples and full samples, shall be conducted in accordance with the provisions of Appendix A to this CIA. 4. Ethics and Compliance Program Review. The IRO shall conduct a compliance review providing findings regarding whether HCA's Ethics & Compliance Program, Policies and Procedures, and operations comply with the terms of this CIA. This review shall include section by section findings regarding the requirements of this CIA. In addition, the IRO shall provide findings regarding whether HCA has complied with its obligation under the Settlement Agreement: (a) not to resubmit to any Federal health care program payors any previously denied claims related to the conduct addressed 17 18 in the Settlement Agreement, and its obligation not to appeal any such denials of claims; and (b) not to charge to, or otherwise seek payment from, federal or state payors for unallowable costs (as defined in the Settlement Agreement) and its obligation to identify and adjust any past charges of unallowable costs. 5. Review Reports. HCA and the IRO(s) shall annually produce reports corresponding to all of the required reviews and including all of the information required by this section of the CIA, workplans, and the Claims Review Reports described in Appendix A. A complete copy of all of the reports for the reporting year shall be included in each of HCA's Annual Reports to OIG. 6. Verification/Validation. In the event that the OIG has reason to believe that any of HCA's reviews fail to conform to its obligations under the CIA or indicates improper billings not otherwise adequately addressed in the audit report, and thus determines that it is necessary to conduct an independent review to determine whether or the extent to which HCA is complying with its obligations under this CIA, HCA agrees to pay for the reasonable cost of any such review by the OIG or any of its designated agents. Prior to proceeding with such an independent review, the OIG shall notify HCA of its intent to do so and its reasons for believing such a review is necessary, and shall attempt to resolve any issues without proceeding with an independent review. This attempt to resolve issues may include permitting HCA to recommend further work it or the IRO may 18 19 undertake to address the OIG's concerns. However, it shall remain in the sole discretion of the OIG to proceed with an independent review as described above. E. Confidential Disclosure Program. HCA has established a Confidential Disclosure Program. HCA provides a toll free "Ethics Line" to enable employees, contractors, agents or other individuals to disclose, to the EC Department or some other person who is not in the disclosing individual's chain of command, any identified issues or questions associated with HCA's Policies and Procedures, practices, or operations with respect to any Federal health care program, believed by the individual to be inappropriate. HCA shall continue to publicize the existence of the Ethics Line to all covered persons. HCA has established a Policy governing its handling of disclosures made through the Ethics Line. HCA shall continue to operate the Ethics Line through such Policy. HCA shall continue to forbid retribution or retaliation for disclosures and allow for anonymous, confidential disclosures. The EC Department shall maintain a confidential disclosure log, which shall include a record and summary of each allegation received, the status of the respective investigations, and any corrective action taken in response to the investigation. F. Ineligible Persons. 1. Definition. For purposes of this CIA, an "Ineligible Person" shall be any individual or entity who: (i) is currently excluded, debarred, or otherwise ineligible to participate in the Federal health care programs; or (ii) has been convicted of a criminal 19 20 offense related to the provision of health care items or services but has not yet been excluded, debarred, or otherwise declared ineligible. 2. Screening Requirements. HCA shall not hire or engage as contractors, or grant staff privileges to, any Ineligible Person. To prevent hiring or contracting with, or granting staff privileges to, any Ineligible Person, HCA shall screen all prospective employees and prospective contractors prior to engaging their services and screen physicians prior to granting staff privileges by (i) requiring applicants to disclose whether they are Ineligible Persons, and (ii) reviewing the General Services Administration's List of Parties Excluded from Federal Programs (available through the Internet at http://epls.arnet.gov) and the HHS/OIG List of Excluded Individuals/Entities (available through the Internet at http://www.hhs.gov/oig) (these lists will hereinafter be referred to as the "Exclusion Lists"). 3. Review and Removal Requirement. HCA has reviewed its list of current employees and contractors paid through automated means against the Exclusion Lists. Within 180 days of the effective date of this CIA, HCA shall review its list of current physicians with staff privileges against the Exclusion Lists. HCA shall review the lists of employees, contractors, and physicians with staff privileges against the Exclusion Lists at least semi-annually during the duration of this CIA. In addition, HCA shall require employees, contractors and physicians with staff privileges to disclose immediately any 20 21 debarment, exclusion or other event that makes the person an Ineligible Person. If HCA has notice that an employee, agent, or physician has become an Ineligible Person, HCA shall remove such person from responsibility for, or involvement with, HCA's business operations related to the Federal health care programs and shall remove such person from any position for which the person's salary or the items or services rendered, ordered, or prescribed by the person are paid in whole or part, directly or indirectly, by Federal health care programs or otherwise with Federal funds at least until such time as the person is reinstated into participation in the Federal health care programs. 4. Pending Charges and Proposed Exclusions. If HCA has notice that an employee or contractor is charged with a criminal offense related to any Federal health care program, or is proposed for exclusion during his or her employment or contract, HCA shall take all appropriate actions to ensure that the responsibilities of that employee or contractor have not and shall not adversely affect the quality of care rendered to any beneficiary, patient or resident, or the accuracy of any claims submitted to any Federal health care program. G. Notification of Proceedings. Within 30 days of discovery by HCA, HCA shall notify OIG, in writing, of any ongoing investigation or legal proceeding conducted or brought by a governmental entity or its agents involving an allegation that HCA has committed a crime or has engaged in fraudulent activities. This notification shall include 21 22 a description of the allegation, the identity of the investigating or prosecuting agency, and the status of such investigation or legal proceeding. HCA shall also provide written notice to OIG within 30 days of the resolution of the matter, and shall provide OIG with a description of the findings and/or results of the proceedings, if any. H. Reporting. 1. Overpayments a. Definition of Overpayments. For purposes of this CIA, an "overpayment" shall mean the amount of money HCA has received in excess of the amount due and payable under any Federal health care program requirements. HCA may not subtract any underpayments for purposes of determining the amount of relevant "overpayments." b. Reporting of Overpayments. If, at any time, HCA identifies or learns of any overpayments, HCA shall notify the payor (e.g., Medicare fiscal intermediary or carrier) and repay any identified overpayments within 30 days of identification and take remedial steps within 60 days of identification (or such additional time as may be agreed to by the payor) to correct the problem, including preventing the underlying problem and the overpayments from 22 23 recurring. Also, within 30 days of identification of the overpayment, HCA shall repay the overpayment to the appropriate payor to the extent such overpayment has been quantified (submission of corrected bills in conformance with payor policy within 30 days fulfills this requirement). If not yet quantified, within 30 days of identification, HCA shall notify the payor of its efforts to quantify the overpayment amount along with a schedule of when such work is expected to be completed. Notification and repayment to the contractor should be done in accordance with the contractor policies. For Medicare overpayments identified through HCA's Ethics and Compliance Program and/or the processes required under this CIA, (including internal and IRO audits, Ethics Line cases, or other corporate-level monitoring or review), the notice to the contractor must include the information contained on the Overpayment Refund Form, attached to this as Appendix B to this CIA (unless the contractor has authorized the form not to be submitted for this particular type of claim correction). 23 24 2. Reportable Events. a. Definition of Reportable Event. For purposes of this CIA, a "Reportable Event" means anything that involves: (i) a substantial overpayment; or (ii) a matter that a reasonable person would consider a potential violation of any criminal, civil, or administrative statute or regulation applicable to any Federal health care program for which criminal penalties, civil monetary penalties, or exclusion may be authorized. A Reportable Event may be the result of an isolated event or a series of occurrences. b. Reporting of Reportable Events. If HCA determines that there is a Reportable Event, HCA shall notify OIG, in writing, within 30 days of making the determination that the Reportable Event exists. The report to the OIG shall include the following information: (i) If the Reportable Event results in an overpayment, the report to the OIG shall be made at the same time as the notification to the payor required in section III.H.1, and shall include all of the information on the Overpayment Refund Form, as well as: 24 25 (A) the payor's name, address, and contact person to whom the overpayment was sent; and (B) the date of the check and identification number (or electronic transaction number) on which the overpayment was repaid/refunded; (ii) a complete description of the Reportable Event, including the relevant facts, persons involved, and legal and Federal health care program authorities implicated; (iii) a description of HCA's actions taken to correct the Reportable Event; and (iv) any further steps HCA plans to take to address the Reportable Event and prevent it from recurring. I. Corrective Actions Related to Investigation of Physician Relationships. In the context of the investigation, self-audit, and settlement discussions related to the issue of physician relationships, certain such relationships have been identified as anomalies. HCA shall take appropriate measures to review these anomalous relationships. Those relationships that are determined by HCA to be non-compliant shall be terminated or amended to conform to HCA's Ethics and Compliance Program and the requirements of the Federal health care programs. HCA shall report on these measures as 25 26 required in section V and all supporting documents shall be available to the OIG upon request. IV. NEW AND DIVESTED LOCATIONS In the event that HCA: (1) purchases or establishes a new hospital, freestanding ambulatory surgery center, home health agency, or another line of business that provides services that are billed to Federal health care programs; or (2) sells or divests an existing hospital, freestanding ambulatory surgery center, or home health agency, HCA shall notify OIG of this fact within 30 days of the date of purchase, establishment, sale, or divestiture. This notification shall include the location of the operation(s), telephone number, fax number, Federal health care program provider number(s) (if any), and the corresponding payor(s) (contractor specific). All covered persons at new locations shall be subject to the requirements in this CIA that apply to new covered persons (e.g., completing certifications and undergoing training). If HCA sells all of the assets or its ownership interest related to a location, then that location shall no longer be considered part of HCA for the purposes of this CIA. If the location is still owned or operated in whole or in part by HCA or any of its subsidiaries or their successors, then the location shall continue to be considered part of HCA for the purposes of this CIA. If a hospital or ambulatory surgery center shall no longer be subject to the CIA due to a sale or transfer from HCA, HCA shall require as a condition of the sale that buyer or transferee 26 27 represents and agrees that it has or shall implement and maintain with respect to its operations of the facility an effective program to prevent and detect violations of the legal requirements applicable to the delivery of goods and services in connection with any health care benefits and that such a program will comply with the provisions of the U.S. Sentencing Guidelines relating to corporate compliance programs and will be mindful of any applicable guidance issued by the OIG or other components of HHS; and that the buyer or transferee agrees that it will maintain such program for no less than five years from the date of sale or transfer. V. IMPLEMENTATION AND ANNUAL REPORTS A. Implementation Report. Within 120 days after the effective date of this CIA, HCA shall submit a written report to OIG summarizing the status of its implementation of the requirements of this CIA. This Implementation Report shall include: 1. the name, title, address, facility name (if applicable), and telephone number of all of the individuals who are in positions, or on committees, described in section III.A (except that with respect to section III.A.6 only, the SVP-Compliance shall certify that the Hospital Committees are in place as required and the information otherwise required by this section shall be available to the OIG upon request); 27 28 2. the copy of all Policies and Procedures required by section III.B.2 that have not been previously provided to the OIG; 3. a description of the training required by section III.C, including a description of the targeted audiences and a schedule of when the training sessions were held; 4. a certification by the SVP-Compliance that: a. the Policies and Procedures required by section III.B have been developed and implemented, and have been distributed to all pertinent covered persons; b. all covered persons have completed the Code of Conduct certification required by section III.B.1; and c. all covered persons have completed the training and executed the certification required by section III.C. 5. the identity of the Independent Review Organization(s) and the proposed start and completion date of the first set of reviews by the Independent Review Organization(s) and appropriate HCA internal resources or directed external resources; 6. a summary of personnel actions taken pursuant to section III.F (other than hiring or granting of staff privileges); 28 29 7. a summary of the actions taken to ensure that the anomalous physician relationships identified in the investigation, self-audit, and settlement discussions have been reviewed, and terminated or amended, as appropriate, in conformance with section III.I.; 8. a list of all of HCA's locations (including physical locations and mailing addresses), the corresponding name under which each location is doing business, the corresponding phone numbers and fax numbers, each location's Medicare provider identification number(s), and the contractor's name and address; and 9. To the extent not already furnished to OIG, or if modified, a description of HCA's corporate structure, including identification of any parent, sister, and other related companies, subsidiaries and their respective lines of business. B. Annual Reports. HCA shall submit to OIG Annual Reports with respect to the status and findings of HCA's compliance activities. The first Annual Report shall cover the time period from the effective date of this CIA through December 31, 2001 and shall be received by the OIG no later than April 30, 2002. Subsequent Annual Reports shall cover each of the calendar years 2002 through 2008 and shall be received by the OIG no 29 30 later than April 30 of the year following the year covered in the report. Each Annual Report shall include: 1. any change in the identity, title, address, facility name (if applicable), telephone number, and position description of all of the individuals who are in positions, or on committees, described in section III.A (except that with respect to section III.A.6 only, the SVP-Compliance shall certify that the Hospital Committees are in place as required and the information otherwise required by this section shall be available to the OIG upon request); 2. a certification by the SVP-Compliance that: a. all covered persons have completed the annual Code of Conduct certification required by section III.B.1; b. all covered persons have completed the training and executed the certification required by section III.C; and c. HCA has complied with the following specified obligations under the Settlement Agreement: (i) not to resubmit to any Federal health care program payors any previously denied claims related to the conduct addressed in the Settlement Agreement, and its obligation not to appeal any such denials of claims; and (ii) not to charge to or otherwise seek payment from federal or state payors for unallowable 30 31 costs (as defined in the Settlement Agreement) and its obligation to identify and adjust any past charges of unallowable costs. 3. notification of any changes or amendments to the Policies and Procedures referenced in section III.B and the reasons for such changes (e.g., change in contractor policy); 4. a complete copy of the reports prepared pursuant to the reviews required in section III.D, including a copy of the methodologies used, along with a copy of the IRO's engagement letter; 5. HCA's response/corrective action plan to any issues raised in the reviews conducted under section III.D; 6. a summary of Reportable Events required to be identified and reported by section III.H and an update on corrective actions taken in response to such Reportable Events; 7. a report of the aggregate overpayments identified through HCA's Ethics and Compliance Program and/or the processes required under this CIA, (including internal and IRO audits, Ethics Line cases, or other corporate-level monitoring or review) that have been returned to the Federal health care programs. Overpayment amounts shall be broken down into the following categories: inpatient Medicare; outpatient Medicare; Medicaid 31 32 (report each applicable state separately); and other Federal health care programs; 8. a copy of the confidential disclosure log required by section III.E and a description of any changes to the Confidential Disclosure Program or Ethics Line referenced in that section; 9. a description of any personnel actions (other than hiring or granting staff privileges) taken by HCA as a result of the obligations in section III.F; and, with respect to any person that falls within the ambit of section III.F.4, the name, title, and responsibilities of the person, and the actions taken by HCA in response to the obligations set forth in that section; 10. a summary describing any ongoing investigation or legal proceeding conducted or brought by a governmental entity involving an allegation that HCA has committed a crime or has engaged in fraudulent activities, which is required to be reported by section III.G. The statement shall include a description of the allegation, the identity of the investigating or prosecuting agency, and the status of such investigation, legal proceeding or requests for information; 11. to the extent that such relationships still exist and have not been appropriately altered and reported in an earlier report to the OIG, a 32 33 summary of the actions taken to ensure that the anomalous physician relationships identified in the investigation, self-audit, and settlement discussions have been reviewed, and terminated or amended, as appropriate, in conformance with section III.I; and 12. a description of all changes to the most recently provided list (as updated) of HCA's locations (including physical locations and mailing addresses) as required by section V.A.7, the corresponding name under which each location is doing business, the corresponding phone numbers and fax numbers, each location's Federal health care program provider identification number(s), and the contractor name and address that issued each provider identification number. C. Certifications. The Implementation Report and Annual Reports shall include a certification by the SVP-Compliance that: (1) except as otherwise explicitly described in the applicable report, HCA is in compliance with all of the requirements of this CIA, to the best of his or her knowledge; and (2) the SVP-Compliance has reviewed the report and has made reasonable inquiry regarding its content and believes that the information is accurate and truthful. 33 34 VI. NOTIFICATIONS AND SUBMISSION OF REPORTS Unless otherwise stated in writing subsequent to the effective date of this CIA, all notifications and reports required under this CIA shall be submitted to the entities listed below: OIG: Civil Recoveries Branch - Compliance Unit Office of Counsel to the Inspector General Office of Inspector General U.S. Department of Health and Human Services Cohen Building, Room 5527 330 Independence Avenue, SW Washington, DC 20201 Phone 202.619.2078 Fax 202.205.0604 HCA: Alan Yuspeh Senior Vice President Ethics, Compliance, and Corporate Responsibility HCA-The Healthcare Company One Park Plaza Nashville, TN 37203 Phone 615.344.1005 Fax 615.344.1045 Unless otherwise specified, all notifications and reports required by this CIA may be made by certified mail, overnight mail, hand delivery or other means, provided that there is proof that such notification was received. For purposes of this requirement, internal facsimile confirmation sheets do not constitute proof of receipt. 34 35 VII. OIG INSPECTION, AUDIT AND REVIEW RIGHTS In addition to any other rights OIG may have by statute, regulation, or contract, OIG or its duly authorized representative(s) may examine HCA's books, records, and other documents and supporting materials and/or conduct an on-site review for the purpose of verifying and evaluating: (a) HCA's compliance with the terms of this CIA; and (b) HCA's compliance with the requirements of the Federal health care programs in which it participates. The documentation described above shall be made available by HCA to OIG or its duly authorized representative(s) at all reasonable times for inspection, audit or reproduction. Furthermore, for purposes of this provision, OIG or its duly authorized representative(s) may interview any of HCA's employees, contractors, or agents who consent to be interviewed at the individual's place of business during normal business hours or at such other place and time as may be mutually agreed upon between the individual and OIG. HCA agrees to assist OIG in contacting and arranging interviews with such individuals upon OIG's request. HCA's employees may elect to be interviewed with or without a representative of HCA present. VIII. DOCUMENT AND RECORD RETENTION In addition to any other requirements for record retention, HCA shall maintain for inspection all documents and records: (1) related to reimbursement from the Federal health care programs for at least five years after the submission of the request for 35 36 reimbursement (or longer if otherwise required); and (2) necessary to establishing HCA's compliance with this CIA for at least three years following the submission of the Annual Report covering the relevant year. Imaged copies of documents shall satisfy this requirement. IX. DISCLOSURES Consistent with HHS's Freedom of Information Act ("FOIA") procedures, set forth in 45 C.F.R. Part 5, the OIG shall make a reasonable effort to notify HCA prior to any release by OIG of information submitted by HCA pursuant to its obligations under this CIA and identified upon submission by HCA as trade secrets, commercial or financial information and privileged and confidential under the FOIA rules. With respect to such releases, HCA shall have the rights set forth at 45 C.F.R. ss. 5.65(d). HCA shall refrain from identifying any information as trade secrets, commercial or financial information and privileged and confidential that does not meet the criteria for exemption from disclosure under FOIA. X. BREACH AND DEFAULT PROVISIONS HCA is expected to fully and timely comply with all of its CIA obligations. A. Stipulated Penalties for Failure to Comply with Certain Obligations. As a contractual remedy, HCA and OIG hereby agree that failure to comply with certain obligations set forth in this CIA may lead to the imposition of the following monetary 36 37 penalties (hereinafter referred to as "Stipulated Penalties") in accordance with the following provisions. 1. A Stipulated Penalty of $2,500.00 (which shall begin to accrue on the day after the date the obligation became due) for each day, beginning 90 days after the effective date of this CIA and concluding at the end of the term of this CIA, HCA fails to have in place any of the following: a. all of the personnel and committees required in section III.A; b. a written Code of Conduct as required in section III.B.1; c. written Policies and Procedures as required in section III.B.2; d. a training program as required in section III.C; and e. a Confidential Disclosure Program as required in section III.E; 2. A Stipulated Penalty of $2,500.00 (which shall begin to accrue on the day after the date the obligation became due) for each day HCA fails meet any of the deadlines to submit the Implementation Report or the Annual Reports to the OIG. 3. A Stipulated Penalty of $2,500.00 (which shall begin to accrue on the date the failure to comply began) for each day HCA employs, contracts with, or grants staff privileges to an Ineligible Person and that person: (i) has responsibility for, or involvement with, HCA's business operations related to the Federal health care programs; 37 38 or (ii) is in a position for which the person's salary or the items or services rendered, ordered, or prescribed by the person are paid in whole or part, directly or indirectly, by Federal health care programs or otherwise with Federal funds (the Stipulated Penalty described in this paragraph shall not be demanded for any time period during which HCA can demonstrate that it did not discover the person's exclusion or other ineligibility after making a reasonable inquiry (as described in section III.F) as to the status of the person). 4. A Stipulated Penalty of $2,500.00 (which shall begin to accrue on the date the HCA fails to grant access) for each day HCA fails to grant access to the information or documentation as required in section VII of this CIA. 5. A Stipulated Penalty of $2,500.00 (which shall begin to accrue on the date the failure began) for a failure by HCA to report a Reportable Event, take corrective action, and pay the appropriate refunds, as provided in section III.H; 6. A Stipulated Penalty of $2,000.00 (which shall begin to accrue 10 days after the date that OIG provides notice to HCA of the failure to comply) for each day HCA fails to comply fully and adequately with any obligation of this CIA and such failure is not already subject to a penalty in section X.A.1 through 5 above. In its notice to HCA, the OIG shall state the specific grounds for its determination that the HCA has failed to comply fully and adequately with the CIA obligation(s) at issue. 38 39 B. Payment of Stipulated Penalties. 1. Demand Letter. Upon a finding that HCA has failed to comply with any of the obligations described in section X.A and determining that Stipulated Penalties are appropriate, OIG shall notify HCA of: (a) HCA's failure to comply; and (b) the OIG's exercise of its contractual right to demand payment of the Stipulated Penalties (this notification is hereinafter referred to as the "Demand Letter"). Within 10 days after receiving the Demand Letter, HCA shall either: (a) cure the breach to the OIG's satisfaction and pay the applicable stipulated penalties; or (b) request a hearing before an HHS administrative law judge ("ALJ") to dispute the OIG's determination of noncompliance, pursuant to the agreed-upon provisions set forth below in section X.D. In the event HCA elects to request an ALJ hearing, the Stipulated Penalties shall continue to accrue until HCA cures, to the OIG's satisfaction, the alleged breach in dispute. Failure to respond to the Demand Letter in one of these two manners within the allowed time period shall be considered a material breach of this CIA and shall be grounds for exclusion under section X.C. 2. Timely Written Requests for Extensions. HCA may submit a timely written request for an extension of time to perform any act or file any notification or report required by this CIA. Notwithstanding any other provision in this section, if OIG grants the timely written request with respect to an act, notification, or report, Stipulated 39 40 Penalties for failure to perform the act or file the notification or report shall not begin to accrue until one day after HCA fails to meet the revised deadline set by the OIG. Notwithstanding any other provision in this section, if OIG denies such a timely written request, Stipulated Penalties for failure to perform the act or file the notification or report shall not begin to accrue until two business days after HCA receives OIG's written denial of such request. A "timely written request" is defined as a request in writing received by OIG at least five business days prior to the date by which any act is due to be performed or any notification or report is due to be filed. 3. Form of Payment. Payment of the Stipulated Penalties shall be made by certified or cashier's check, payable to "Secretary of the Department of Health and Human Services," and submitted to OIG at the address set forth in section VI. 4. Independence from Material Breach Determination. Except as otherwise noted, these provisions for payment of Stipulated Penalties shall not affect or otherwise set a standard for the OIG's determination that HCA has materially breached this CIA, which decision shall be made at the OIG's discretion and governed by the provisions in section X.C, below. 40 41 C. Exclusion for Material Breach of this CIA 1. Notice of Material Breach and Intent to Exclude. The parties agree that a material breach of this CIA by HCA constitutes an independent basis for OIG to exclude HCA and/or any of its subsidiaries from participation in the Federal health care programs (as defined in 42 U.S.C. ss. 1320a-7b(f)). Upon a determination by OIG that HCA has materially breached this CIA and that exclusion should be imposed, the OIG shall notify HCA by certified mail of: (a) HCA's material breach; and (b) OIG's intent to exercise its contractual right to impose exclusion (this notification is hereinafter referred to as the "Notice of Material Breach Letter"). 2. Opportunity to Cure. HCA shall have 30 days after receiving the Notice of Material Breach Letter to demonstrate to the OIG's satisfaction that: a. HCA is in full compliance with this CIA; b. the alleged material breach has been cured; or c. the alleged material breach cannot be cured within the 30-day period, but that: (i) HCA has begun to take action to cure the material breach; (ii) HCA is pursuing such action with due diligence; and (iii) HCA has provided to OIG a reasonable timetable for curing the material breach. 41 42 3. Exclusion Letter. If at the conclusion of the 30-day period, HCA fails to satisfy the requirements of section X.C.2, OIG may exclude HCA and/or any of its subsidiaries from participation in the Federal health care programs. OIG shall notify HCA in writing of its determination to exclude HCA and/or any of its subsidiaries (this letter shall be referred to hereinafter as the "Exclusion Letter"). Subject to the Dispute Resolution provisions in section X.D, below, the exclusion shall go into effect 30 days after the date of the Exclusion Letter. The exclusion shall have national effect and shall also apply to all other federal procurement and non-procurement programs. If HCA and/or any of its subsidiaries is excluded under the provisions of this CIA, HCA may seek reinstatement pursuant to the provisions at 42 C.F.R. ss.ss. 1001.3001-.3004. 4. Material Breach. A material breach of this CIA means: a. a failure by HCA to report a Reportable Event, take corrective action and pay the appropriate refunds, as provided in section III.H, provided that any of the following individuals at HCA had notice of the Reportable Event: an officer; a director; a Responsible Executive; an ECO; a member of the EC Department; or an attorney in the Legal Department; 42 43 b. repeated or flagrant violations of the obligations under this CIA, including, but not limited to, the obligations addressed in section X.A of this CIA; c. a failure to respond to a Demand Letter concerning the payment of Stipulated Penalties in accordance with section X.B above; or d. a failure to retain and use an Independent Review Organization for review purposes in accordance with section III.D. D. Dispute Resolution 1. Review Rights. Upon the OIG's delivery to HCA of its Demand Letter or of its Exclusion Letter, and as an agreed-upon contractual remedy for the resolution of disputes arising under the obligation of this CIA, HCA shall be afforded certain review rights comparable to the ones that are provided in 42 U.S.C. ss. 1320a-7(f) and 42 C.F.R. Part 1005 as if they applied to the Stipulated Penalties or exclusion sought pursuant to this CIA. Specifically, the OIG's determination to demand payment of Stipulated Penalties or to seek exclusion shall be subject to review by an ALJ and, in the event of an appeal, the Departmental Appeals Board ("DAB"), in a manner consistent with the provisions in 42 C.F.R. ss.ss. 1005.2-1005.21. Notwithstanding the language in 42 C.F.R. ss. 1005.2(c), the request for a hearing involving stipulated penalties shall be made within 10 43 44 days of HCA receiving the Demand Letter and the request for a hearing involving exclusion shall be made within 20 days of HCA receiving the Exclusion Letter. 2. Stipulated Penalties Review. Notwithstanding any provision of Title 42 of the United States Code or Chapter 42 of the Code of Federal Regulations, the only issues in a proceeding for stipulated penalties under this CIA shall be: (a) whether HCA was in full and timely compliance with the obligations of this CIA for which the OIG demands payment; and (b) the period of noncompliance. HCA shall have the burden of proving its full and timely compliance and the steps taken to cure the noncompliance, if any. If the ALJ finds for the OIG with regard to a finding of a breach of this CIA and orders HCA to pay Stipulated Penalties, such Stipulated Penalties shall become due and payable 20 days after the ALJ issues such a decision notwithstanding that HCA may request review of the ALJ decision by the DAB. 3. Exclusion Review. Notwithstanding any provision of Title 42 of the United States Code or Chapter 42 of the Code of Federal Regulations, the only issues in a proceeding for exclusion based on a material breach of this CIA shall be: (a) whether HCA was in material breach of this CIA; (b) whether such breach was continuing on the date of the Exclusion Letter; and (c) whether the alleged material breach could not have been cured within the 30-day period, but that (i) HCA had begun to take action to cure the material breach within that period, (ii) HCA has pursued and is pursuing such action with 44 45 due diligence, and (iii) HCA provided to OIG within that period a reasonable timetable for curing the material breach. For purposes of the exclusion herein, exclusion shall take effect only after an ALJ decision that is favorable to the OIG. HCA's election of its contractual right to appeal to the DAB shall not abrogate the OIG's authority to exclude HCA and/or any of its subsidiaries upon the issuance of the ALJ's decision. If the ALJ sustains the determination of the OIG and determines that exclusion is authorized, such exclusion shall take effect 20 days after the ALJ issues such a decision, notwithstanding that HCA may request review of the ALJ decision by the DAB. XI. EFFECTIVE AND BINDING AGREEMENT Consistent with the provisions in the Settlement Agreement pursuant to which this CIA is entered, and into which this CIA is incorporated, HCA and OIG agree as follows: A. This CIA shall be binding on the successors, assigns, and transferees of HCA, consistent with the terms of Section IV; B. This CIA shall become final and binding on the date that the court(s) accept the plea(s) and impose a sentence in the criminal proceedings related to the plea agreement entered into between HCA and the United States on or about the date of the signing of this CIA; C. Any modifications to this CIA shall be made with the prior written consent of the parties to this CIA; and 45 46 D. The undersigned HCA signatories represent and warrant that they are authorized to execute this CIA. The undersigned OIG signatory represents that he is signing this CIA in his official capacity and that he is authorized to execute this CIA. 46 47 ON BEHALF OF HCA /s/ Thomas F. Frist, Jr. 12/12/00 - ------------------------------------- ------------------- Thomas F. Frist, Jr., M.D DATE Chairman and Chief Executive Officer HCA-The Healthcare Company /s/ Alan Yuspeh 12/12/00 - ------------------------------------- ------------------- Alan Yuspeh DATE Senior Vice President Ethics, Compliance, and Corporate Responsibility HCA-The Healthcare Company ON BEHALF OF THE OFFICE OF INSPECTOR GENERAL OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES /s/ Lewis Morris 12/14/00 - ------------------------------------- ------------------- Lewis Morris DATE Assistant Inspector General for Legal Affairs Office of Inspector General U.S. Department of Health and Human Services 47 -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

   1
                                                                    EXHIBIT 99.1

[HCA LOGO]


                                                                            NEWS
- --------------------------------------------------------------------------------
                                                           FOR IMMEDIATE RELEASE

INVESTOR CONTACT:                                              MEDIA CONTACT:
Mark Kimbrough                                                 Jeff Prescott
(615) 344-2688                                                 (615) 344-5708


                 HCA SIGNS AGREEMENTS IN COLUMBIA INVESTIGATION
      Columbia Management Companies, Inc and Columbia Homecare Group, Inc.
                                 Agree to Pleas



NASHVILLE, TENN., DEC. 14, 2000--HCA announced today that it has signed an
agreement with the criminal division of the Department of Justice and U.S.
attorneys' offices in Atlanta; El Paso, Texas; Miami; and Tampa, Fla. to resolve
all pending federal criminal issues in the Columbia investigation.

         The company also signed today a civil settlement agreement with the
civil division of the Department of Justice, first announced by the company in
May 2000, to resolve civil false claims issues related to DRG coding, outpatient
laboratory and home health. Today's actions also included the signing of a
corporate integrity agreement with the Office of Inspector General of the
Department of Health and Human Services.

         "Today's action represents one of the last steps needed to put the
Columbia investigation behind us and allows us to move forward, maintaining our
focus on providing quality patient care," said Thomas F. Frist, Jr., M.D.,
Chairman and Chief Executive Officer of HCA.

         Frist was named Chairman and CEO of the company in July of 1997,
bringing with him Jack Bovender as President and COO. The two immediately began
making structural changes within the company, including the announcement of a
12-point plan to refocus operations. The plan placed new emphasis on
locally-managed hospitals and included elements such as:

         -        Halting the company's national branding campaign and returning
                  to a focus on local community relationships
         -        Reemphasizing a "patients first" philosophy with a new mission
                  and values statement
         -        Replacing most of senior management and further strengthening
                  the board of directors
         -        Developing a code of conduct as part of a model ethics and
                  compliance program


                                     -more-


   2

         In exchange for a full criminal release for the company and its
affiliates on all federal healthcare billing issues involved in the
investigation up to the date pleas are entered, Columbia Management Companies,
Inc. and Columbia Homecare Group, Inc. (non-operating subsidiaries) have agreed
to the following pleas:

         Department of Justice - DRG Coding, one count of conspiracy.

         U.S. Attorney's Office, Atlanta - Home health acquisitions, one count
         of receiving unlawful remuneration.

         U.S. Attorney's Office, El Paso - El Paso physician relationships, one
         count of conspiracy.

         U.S. Attorney's Office, Miami - Home Health acquisitions and community
         educators cost allowability, one count of conspiracy.

         U.S. Attorney's Office, Tampa - Home Health acquisitions and community
         educators, two counts of conspiracy. Cost report claims in connection
         with certain specific cost reports, multiple counts of false
         statements.


         Today's agreements resolve all federal criminal issues outstanding
against the company and civil issues related to outpatient lab billing, home
health issues and DRG coding. In addition, representatives of state attorneys
general have agreed to recommend to state officials that the company be released
from corresponding criminal liability in all states in which the company
conducts business. The company continues to discuss civil issues relating to
cost reporting and physician relations with the government.

         The criminal agreement also will result in the company divesting
Deering Hospital in Miami, Fla. The company has been in discussions over the
past few years with buyers interested in acquiring Deering Hospital. The
divestiture was agreed to as part of the overall criminal resolution, and does
not reflect an admission or understanding that the facility was involved in the
specific situations discussed in the agreement. In addition, the company has
agreed to the exclusion from the Medicare program of Clearwater Community
Hospital in Clearwater, Fla., which the company closed in February 1999.

         As part of today's announced criminal agreement the company will pay
the government approximately $95 million, which the company will record as a
special charge in the fourth quarter of 2000. The criminal agreement is
conditional upon entry of pleas in federal district court, and necessary court
approvals, which are expected in the first quarter of 2001. Payment of the
criminal settlement will be made by the company within five days after all
necessary court approvals are obtained.

         As previously announced in May of 2000, the civil agreement completed
today included a provision for the company to pay the government $745 million
plus interest. Payment of the civil settlement will be made upon court approval
of the settlement, which is expected in the first quarter of 2001. The
accounting charge for the civil settlement was recorded in the second quarter of
2000.


   3

         This press release contains forward-looking statements (all statements
other than those setting forth solely historic fact) based on management's
current expectations. Numerous risks, uncertainties and other factors including
(1) the ability to consummate the agreements relating to the civil and criminal
actions, (2) judicial approval of the settlement agreements in the civil and
criminal actions, (3) the review by the company's external auditors of the
accounting treatment of the settlement amounts and any related adjustments, (4)
any examination by the Internal Revenue Service of the tax treatment of the
settlement amounts and any related adjustments, (5) the impact of the remaining
civil issues relating to cost reporting and physician relations not resolved by
the settlements, (6) the impact of the settlements on pending and any future
actions by state government authorities and civil litigation by private
plaintiffs, (7) and other factors detailed from time to time in the company's
filings with the Securities and Exchange Commission may cause actual results to
differ materially from those anticipated in the forward-looking statements. Many
of the factors that will determine the impact of the announced settlements are
beyond the ability of the company to control or predict.

Readers should not place undue reliance on forward-looking statements, which
reflect management's views only as of the date hereof. The company undertakes no
obligation to revise or update any forward-looking statement, or to make and
other forward-looking statements, whether as a result of new information, future
events or otherwise.

All references to company and "HCA" as used throughout this news release refer
to HCA - The Healthcare Company and its affiliates.

EX-99.2

   1
                                                                    EXHIBIT 99.2

                  CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT


                                   I. PARTIES

         This Civil and Administrative Settlement Agreement (Agreement) is
entered into between the following (hereinafter "the Parties") through their
authorized representatives: the United States of America, acting through the
United States Department of Justice and on behalf of the Office of Inspector
General (OIG-HHS) of the Department of Health and Human Services (HHS); the
TRICARE Management Activity (TMA)(formerly the Office of Civilian Health and
Medical Program of the Uniformed Services (OCHAMPUS), through its General
Counsel; the Office of Personnel Management (OPM), which administers the Federal
Employees Health Benefits Program (FEHBP), through the United States Attorney's
Office for the District of Columbia; (collectively the "United States"); and HCA
- - The Healthcare Company, formerly known as Columbia/HCA Healthcare Corporation,
on behalf of its predecessors and current and former affiliates, divisions and
subsidiaries (collectively "HCA").

                                  II. PREAMBLE

         As a preamble to this Agreement, the Parties agree to the following:


         A.       HCA is a Delaware corporation that through its predecessors
and/or its subsidiaries and affiliates operates or has operated over 400
hospitals, over 500 home health agencies,


   2

and numerous ancillary health care facilities in at least thirty states.


         B.       Dennis J. Wyman, M.D., Robert K. Rothfeder, M.D., Health
Outcomes Technologies, Donald S. McLendon, Tonya M. Atchison, Randal T. Boston,
Sharon Christian, Martha Long, Kristen Kuhn, Pamela Cianci, Mary R. Hampton,
Sara Ortega, John W. Schilling, Madelyn Rappaport, J. Watson Maxwell, Francis M.
Patton, and Francesco Lanni (the "relators") filed qui tam actions in various
United States District Courts that are now pending before the District Court for
the District of Columbia captioned as follows:

                  (1)      U.S. ex rel. Wyman and Rothfeder v. HealthTrust,
Columbia/HCA, et al., No. 99 - 3310 (D.D.C.)(formerly D.Utah);

                  (2)      U.S. ex rel. Health Outcomes Technologies v. Columbia
Medical Center-East, et al., No. 99 - 3297 (D.D.C.)(formerly E.D.Pa.);

                  (3)      U.S. ex rel. McLendon v. Columbia Healthcare Corp.,
et al., No. 99-3295 (D.D.C.)(formerly N.D.Ga.);

                  (4)      U.S. ex rel. Cianci v. Columbia/HCA Healthcare Corp.,
et al., No. 99-2761-CIV-T-23E (formerly M.D. Fla.);

                  (5)      U.S. ex rel. Atchison v. Columbia/HCA Healthcare,
Inc., No. 99-2399 (D.D.C.)(formerly M.D. Tenn.);


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   3

                  (6)      U.S. ex rel. Atchison v. Columbia/HCA Healthcare,
Inc., No. 99-3307 (D.D.C.)(formerly W.D.Tex.);

                  (7)      U.S. ex rel. Boston v. Columbia/HCA Healthcare Corp.,
No. 99-3301 (D.D.C.)(formerly N.D. Tex.);

                  (8)      U.S. ex rel. Christian, Long and Kuhn v. Columbia/HCA
Healthcare Corp., et al., No. 99-3303 (D.D.C.)(formerly S.D. Tex.);

                  (9)      U.S. ex rel. Hampton v. Columbia/HCA Healthcare
Corp., et al., No. 99-3294 (D.D.C.)(formerly M.D.Ga.);

                  (10)     U.S. ex rel. Ortega v. Columbia/HCA Healthcare Corp.,
et al., No. 99-3305 (D.D.C.)(formerly W.D.Tex.);

                  (11)     U.S. ex rel. Schilling v. Columbia/HCA Healthcare
Corp., et al., Civ. No. 96-1264-CIV-T-23B (formerly M.D.Fla.);

                  (12)     U.S. ex rel. Rappaport v. Hospital Corporation of
America et al., Civ. No. 99-3228 (formerly N.D. Ala.);

                  (13)     U.S. ex rel. Lanni v. Curative Health Services, Inc.
et al., No. 00-2584 (D.D.C.)(formerly S.D.N.Y.).

         C.       HCA submitted or caused to be submitted claims for payment to
the Medicare Program (Medicare), Title XVIII of the Social Security Act, 42
U.S.C. ss.ss.1395-1395ggg, the Medicaid Program, 42 U.S.C. ss.ss.1396-1396v; the
TRICARE Program


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   4

(hereinafter referred to as TRICARE), 10 U.S.C. ss.1071 -
1107,and the FEHBP, 5 U.S.C.ss.ss.8901 et seq. (collectively "the government
health care programs").

         D.       The United States contends that it has certain civil claims
under the False Claims Act, 31 U.S.C. ss.3729-33, and other federal statutes
and/or common law doctrines, as specified in Paragraph 2 below, against HCA, for
engaging in the following conduct (hereinafter referred to as the "Covered
Conduct").

                  (1)      OUTPATIENT LABORATORY BILLING

         From January 1, 1989 through December 31, 1997, HCA hospitals
identified in Attachment 1 to this Agreement billed the government health care
programs for outpatient laboratory tests designated by the CPT Codes in the
80000-89999 range, and by CPT Codes G0058, G0059 and G0060, without regard for
whether they were medically necessary, had been properly ordered by physicians
or were being billed appropriately.

                  (2)      DRG UPCODING

         From January 1, 1990 through December 31, 1997, HCA hospitals
identified in Attachment 2 to this Agreement "upcoded" claims to the government
health care programs for inpatient hospital admissions by assigning diagnosis
codes that were not supported by physician documentation in the patients'
medical records for the purpose of improperly increasing reimbursement on
inpatient claims submitted for the following Diagnosis Related


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   5

Groups (DRGs): 076, 079, 087, 121, 124, 132, 138, 316, 416, and 475; and the
complication and comorbidity DRGs ("cc" DRGs) identified in Attachment 3 to this
Agreement.

                  (3)      HOME HEALTH COMMUNITY EDUCATION

         For cost report years 1994 through 1997, HCA submitted claims to
Medicare for reimbursement of costs, including administrative and general costs,
that it had allocated to community education activities. In fact, some of these
costs were attributable to nonreimbursable advertising and marketing functions
performed by home health community educators, including, but not limited to,
patient care coordinators, home care coordinators, community liaisons and
community liaison nurses. The conduct described in this Paragraph does not
include claims, if any, submitted to Medicaid, TRICARE or FEHBP.

                  (4)      HOME HEALTH BILLING ISSUES

         Between January 1, 1995 and December 31, 1998, the HCA-owned home
health agencies listed in Attachment 4 to this Agreement submitted claims to
Medicare, Medicaid, and TRICARE (a) for visits to patients who did not qualify
for home health services because (i) the patients were not homebound, (ii) there
was no medical need for such services, or (iii) there was no medical need for
skilled services; (b) for visits that were not provided; (c) for visits to
deliver services that were in fact or should


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   6

have been provided by an assisted living facility; (d) for visits that lacked
proper physician authorization because (i) the home health agency had not
received physician orders prior to billing for services, (ii) the home health
agency had not properly obtained the physician signature, (iii) the home health
agency provided the services after expiration of the written order from the
physician; and (e) for visits billed but not documented. The conduct described
in this Paragraph does not include claims, if any, submitted to FEHBP.

                         (5) HOME HEALTH MANAGEMENT FEES

         For cost report years 1993 through 1998, HCA improperly included in
Medicare cost reports the management fee costs related to the acquisition of the
Olsten, ResCare, AbleCare, CareOne and Central (a/k/a Simeone Central) home
health agencies in Florida, Georgia and Alabama. The costs referred to in this
Paragraph include all kickback, related party, undisclosed rebate and cost
report claims relating to these acquisitions, but do not include duplicative
services or non-allowable costs included in administrative and general costs not
otherwise covered in this release allocated to the acquired agencies. The
conduct described in this Paragraph does not include claims, if any, submitted
to Medicaid, TRICARE or FEHBP.

              E.           The United States also contends that it has
certain administrative claims against HCA under the provisions

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   7

for permissive exclusion from the Medicare, Medicaid, and other Federal health
care programs, 42 U.S.C. ss.1320a-7(b), the provisions for civil monetary
penalties, 42 U.S.C. ss.1320a-7a, permissive exclusion from TRICARE, 32
C.F.R. ss.199.9, and permissive exclusion from FEHBP, 5 U.S.C. ss.8902a and 5
C.F.R. Part 970, for the Covered Conduct.

                  F.       The following States ("the States") contend that they
have certain civil claims against HCA for the conduct specified in Paragraphs D
(1)(outpatient laboratory), (2)(DRG upcoding) and (4)(home health billing)
above: Alaska, Alabama, Arizona, Arkansas, California, Colorado, Florida,
Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine,
Massachusetts, Mississippi, Missouri, Nevada, New Hampshire, New Mexico, North
Carolina, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah,
Virginia, Washington, West Virginia, Wyoming. HCA and the States will execute
separate settlement agreements regarding these claims in exchange for the
payment specified in Paragraph 1(b) below.

                  G. The relators identified in Paragraph B above are among
those who claim entitlement under 31 U.S.C. ss.3730(d) to a share of the
proceeds of this Agreement, but the relators and the United States have not
agreed on the entitlement or amount of that award, if any. This Agreement does
not cover the claims of

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   8

any relator to payment of attorney's fees under 31 U.S.C. ss.3730(d).

                  H.       This Settlement Agreement does not constitute
evidence or an admission by any party of any liability or wrongful conduct.

                  I.       HCA has executed letters of credit in favor of the
United States in the total amount of one billion dollars ($1,000,000,000)
pursuant to a February 1999 Letter of Credit Agreement (LOC Agreement). The LOC
Agreement is incorporated herein by reference.

                  J.       HCA and OIG-HHS have executed a separate Corporate
Integrity Agreement (CIA), which is incorporated herein by reference.

                  K.       To avoid the delay, uncertainty, inconvenience, and
expense of protracted litigation of the claims set forth above, the Parties
hereby reach a full and final settlement of the claims against HCA pursuant to
the Terms and Conditions set forth below.

                            III. TERMS AND CONDITIONS

         NOW, THEREFORE, in reliance upon the representations contained herein,
in consideration of the mutual promises, covenants, and obligations set forth
below, and for good and valuable consideration as stated herein, the Parties
agree as follows:

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   9


         1.       HCA agrees to pay to the United States and the States
$745,000,000.00, plus interest accruing at a simple rate of 6.5% per annum from
May 18, 2000 through and including the Payment Date (the Settlement Amount). The
"Payment Date" shall be within five (5) days of approval of this Agreement by
the United States District Court for the District of Columbia. HCA agrees to pay
the Settlement Amount as follows:

                  (a)      HCA agrees to pay $731,367,246.23 plus interest
accruing at a simple rate of 6.5% per annum from May 18, 2000 through and
including the Payment Date to the United States by electronic funds transfer
pursuant to written instructions to be provided by Michael F. Hertz, Director,
Commercial Litigation Branch, Civil Division, United States Department of
Justice. The $731,367,246.23 represents the total of the following settlement
amounts: $90,016,350 (outpatient laboratories); $395,567,650 (DRG upcoding);
$50,000,000 (home health community education); $90,000,000 (home health
management fees); $105,783,246.23 (home health billing).

                  (b)      HCA also agrees to pay the States $13,632,753.77,
plus interest accruing at a simple rate of 6.5% per annum from May 18, 2000
through and including the Payment Date in a separate escrow, as designated by
the States, for distribution to the individual States upon completion of the
separate State settlement agreements.

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   10

         2.       Subject to the exceptions in Paragraph 10 below, in
consideration of the obligations of HCA set forth in this Agreement, conditioned
upon HCA's payment in full of the Settlement Amount, the United States (on
behalf of itself, its officers, agents, agencies, and departments) agrees to
release HCA together with its current and former parent corporations, each of
its direct and indirect subsidiaries, brother or sister corporations, divisions,
current or former owners and affiliates, and the successors and assigns of any
of them from any civil or administrative monetary claim the United States has or
may have under the False Claims Act, 31 U.S.C. ss.ss.3729-3733; the Civil
Monetary Penalties Law, 42 U.S.C. ss.1320a-7a; the Program Fraud Civil Remedies
Act, 31 U.S.C. ss.ss.3801-3812; or the common law theories of payment by
mistake, unjust enrichment, breach of contract, and fraud, for the Covered
Conduct.

         3.       On the Payment Date, conditioned upon receipt of the
Settlement Amount, the LOC Agreement is hereby amended as follows:

                  (a)      The unconditional guarantee by the Company (as
defined in the LOC Agreement) of the Obligations (as defined in the LOC
Agreement) in the form of the Letters of Credit (as defined in the LOC
Agreement), and the aggregate amount which may be drawn under the Letters of
Credit by the United States, shall be two hundred fifty million dollars
($250,000,000) rather than one billion dollars ($1,000,000,000).

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   11

                  (b)      Upon receipt by the United States of any payment made
in satisfaction of any of the Obligations following the Payment Date, whether
pursuant to an Actionable Order or Settlement Agreement (as such terms are
defined in the LOC Agreement) and including any payment made through a drawing
under any Letter of Credit, the unconditional guarantee by the Company of the
Obligations in the form of the Letters of Credit, and the aggregate amount which
may be drawn under the Letters of Credit by the United States, shall immediately
be reduced dollar-for-dollar by the amount of such payment. Reductions pursuant
to this clause (b) shall be cumulative and in addition to the reduction
described in clause (a) above. For purposes of this clause (b), a payment shall
be deemed made in satisfaction of an obligation only if acknowledged in writing
as such by the United States or if made through a drawing under a Letter of
Credit.

                  (c)      In connection with any reduction of the Company's
guarantee of the Obligations described in clause (a) or (b) above, the Company
may elect to replace the then outstanding Letter(s) of Credit with one or more
new Letter(s) of Credit in an amount at least equal to the reduced amount of the
Company's guarantee set forth in clause (a) or (b) (as applicable), so long as
the new Letter(s) of Credit are issued by a Letter of Credit issuer acceptable
under Paragraph 2 of the LOC Agreement. The replaced Letter(s) of Credit shall
be returned for cancellation

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   12

to the Company in exchange for the replacement Letter(s) of Credit.

         HCA and the United States acknowledge that the foregoing agreement to
replace the Company's unconditional guaranty of the Obligations in the form of
the Letters of Credit on the Payment Date with two hundred fifty million dollars
($250,000,000) rather than one billion dollars ($1,000,000,000) is not based on
the amount or expected amount of HCA's remaining liability for conduct not
addressed by this Agreement.

         4.       This Agreement is expressly conditioned upon resolution,
through execution of plea agreement(s) or otherwise, of the Company's corporate
criminal liability, with the Department of Justice (the Criminal Condition) as
set forth in the Plea Agreement executed on December 14, 2000. As used in this
Paragraph, the term "resolution" includes, where appropriate, acceptance by the
appropriate court(s) of any plea agreement(s) and imposition of any sentence(s)
necessary to effectuate the Criminal Condition.

         5.       After the execution of this Agreement, the United States and
HCA will move the United States District Court for the District of Columbia for
(1) dismissal with prejudice of the claims against HCA in the Civil Actions
identified in Paragraph B (1) - (4) above; and (2) dismissal with prejudice of
those claims against HCA in the Civil Actions identified in Paragraph B (5) -
(13) above that are co-extensive with the Covered Conduct.

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   13

The motions to dismiss will be conditioned upon receipt by the United States of
the Settlement Amount. The claims that the United States and HCA agree are
co-extensive with the Covered Conduct are identified in Attachment 5 to this
Agreement, incorporated by reference herein. The parties agree that they reserve
the right to seek to dismiss any claim of any relator other than those
identified on the grounds they are coextensive with the Covered Conduct or are
otherwise barred. The United States also agrees to use reasonable good faith
efforts to cause the dismissal or release of any claims filed by relators (with
prejudice to relators but without prejudice to the United States) in the Civil
Actions identified in Paragraph B (5) - (13) above that: 1) relate to home
health community education claims (as described in Paragraph D (3) above)
submitted to Medicaid, TRICARE or FEHBP; 2) relate to home health billing claims
(as described in Paragraph D (4) above) submitted to FEHBP; and 3) relate to
home health management fees claims (as described in Paragraph D (5) above)
submitted to Medicaid, TRICARE or FEHBP.

         6.       Should this Agreement be challenged by any relator as not
fair, adequate or reasonable pursuant to 31 U.S.C. ss.3730(c)(2)(B), the United
States and HCA agree that they will take all reasonable and necessary steps to
defend this Agreement.

         7.       In consideration of the obligations of HCA set forth in this
Agreement and the CIA, conditioned upon HCA's payment in full of the Settlement
Amount, the OIG-HHS agrees to

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   14

release and refrain from instituting, directing or maintaining any
administrative action seeking exclusion from the Medicare, Medicaid, or other
Federal health care programs (as defined in 42 U.S.C. ss.1320a-7b(f)) against
HCA under 42 U.S.C. ss.1320a-7a (Civil Monetary Penalties Law), or 42 U.S.C.
ss.1320a-7(b)(7) (permissive exclusion for fraud, kickbacks, and other
prohibited activities), for the Covered Conduct, except as reserved in Paragraph
10, below, and as reserved in this Paragraph. The OIG-HHS expressly reserves
all rights to comply with any statutory obligations to exclude HCA together with
its current and former parent corporations, each of its direct and indirect
subsidiaries, brother or sister corporations, divisions, current or former
owners, affiliates, and the successors and assigns of any of them from the
Medicare, Medicaid, or other Federal health care program under 42
U.S.C. ss.1320a-7(a)(mandatory exclusion) based upon the Covered Conduct.

         8.       In consideration of the obligations of HCA set forth in this
Agreement, conditioned upon HCA's payment in full of the Settlement Amount, TMA
agrees to release and refrain from instituting, directing, or maintaining any
administrative action seeking exclusion from the TRICARE/CHAMPUS Program against
HCA under 32 C.F.R. ss.199.9 for the Covered Conduct, except as reserved in
Paragraph 10, below, and as reserved in this Paragraph. TMA expressly reserves
authority to exclude HCA together with its current and former parent
corporations, each of


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   15

its direct and indirect subsidiaries, brother or sister corporations, divisions,
current or former owners, affiliates, and the successors and assigns of any of
them, from the TRICARE/CHAMPUS program under 32 C.F.R. ss.ss.199.9
(f)(1)(i)(A), (f)(1)(i)(B), and (f)(1)(iii), based upon the Covered Conduct.

         9.       In consideration of the obligations of HCA set forth in this
Agreement, conditioned upon HCA's payment in full of the Settlement Amount, OPM
agrees to release and refrain from instituting, directing, or maintaining any
administrative action seeking exclusion from the FEHBP program against HCA under
5 U.S.C. ss.8902a or 5 C.F.R. Part 970 for the Covered Conduct, except as
reserved in Paragraph 10, below and except if excluded by the OIG-HHS pursuant
to 42 U.S.C. ss.1320a-7(a).

         10.      Notwithstanding any term of this Agreement, specifically
reserved and excluded from the scope and terms of this Agreement as to any
entity or person (including HCA and Relators) are any and all of the following
claims of the United States:

                  a.       Any civil, criminal or administrative liability to
the United States arising under Title 26, U.S. Code (Internal Revenue Code);

                  b.       Any criminal liability;

                  c.       Except as explicitly stated in this Agreement, any
administrative liability, including mandatory exclusion from Federal health care
programs;


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   16

                  d.       Any liability to the United States (or its agencies)
for any conduct other than the Covered Conduct;

                  e.       Any claims of the United States based upon such
obligations as are created by this Agreement;

                  f.       Any claims by FEHBP for the Covered Conduct
identified in Paragraph D(3) (home health community education), (4) (home health
billing), and (5) (home health management fees) above.

                  g.       Any claims by TRICARE/CHAMPUS for the Covered Conduct
identified in Paragraph D(3) (home health community education) and (5) (home
health management fees) above.

                  h.       Any claims by the United States or the States
relating to the Medicaid Program for the Covered Conduct identified in Paragraph
D(3) (home health community education) and (5) (home health management fees)
above.

                  i.       Any express or implied warranty claims or other
claims for defective or deficient products or services, including quality of
goods and services, provided by HCA;

                  j.       Any claims for personal injury or property damage or
for other similar consequential damages arising from the Covered Conduct;

                  k.       Any claims of the United States based on a failure to
deliver items or services due (with the exception of home health services that
the United States alleges were not provided, as described in Paragraph D(4));

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   17

                  l.       Any civil or administrative claims of the United
States against individuals (including current or former directors, officers,
employees, agents, or shareholders of HCA).

         11.      HCA has entered into a Corporate Integrity Agreement (CIA)
with HHS, attached as Attachment 6, which is incorporated into this Agreement by
reference. HCA will implement its obligations under the CIA immediately upon the
execution of this Agreement.

         12.      HCA waives and will not assert any defenses HCA may have to
any criminal prosecution or administrative action relating to the Covered
Conduct, which defenses may be based in whole or in part on a contention that,
under the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or
under the Excessive Fines Clause in the Eighth Amendment of the Constitution,
this Settlement bars a remedy sought in such criminal prosecution or
administrative action. HCA agrees that this settlement is not punitive in
purpose or effect. Nothing in this Paragraph or any other provision of this
Agreement constitutes an agreement by the United States concerning the
characterization of the Settlement Amount for purposes of the Internal Revenue
Laws, Title 26 of the United States Code.

         13.      HCA fully and finally releases the United States, its
agencies, employees, servants, and agents from any claims (including attorney's
fees, costs, and expenses of every kind and however denominated) which HCA has
asserted, could have asserted,

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   18

or may assert in the future against the United States, its agencies, employees,
servants, and agents, related to the Covered Conduct and the United States'
investigation and prosecution thereof.

         14.      The Settlement Amount will not be decreased as a result of the
denial of claims for payment now being withheld from payment by any Medicare
carrier or intermediary or by FEHBP or TRICARE or any State payer, related to
the Covered Conduct; and HCA agrees not to resubmit to any Medicare carrier or
intermediary or to FEHBP or TRICARE or any State payer any previously denied
claims related to the Covered Conduct, and agrees not to appeal any such denials
of claims.

         15.      HCA agrees to the following:

                  (a)      Unallowable Costs Defined: HCA agrees that all costs
(as defined in the Federal Acquisition Regulations (FAR) 48 C.F.R. ss.31.205-47
and in Titles XVIII and XIX of the Social Security Act, 42 U.S.C.
ss.ss.1395-1395ggg and 1396-1396v, and the regulations promulgated thereunder)
incurred by or on behalf of HCA, its present or former officers, directors,
employees, shareholders, and agents in connection with:

                  (1)      the matters covered by this Agreement and any related
plea agreement,

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA

   19

                  (2)      the Government's audit(s) and civil and any criminal
investigation(s) of the matters covered by this Agreement,

                  (3)      HCA's investigation, defense, and corrective actions
undertaken in response to the Government's audit(s) and civil and any criminal
investigation(s) in connection with the matters covered by this Agreement
(including attorney's fees and the obligations undertaken pursuant to the CIA
incorporated in this Agreement),

                  (4)      the negotiation and performance of this Agreement and
any Plea Agreement, and

                  (5)      the payment HCA makes to the United States pursuant
to this Agreement and any payments that HCA may make to relators, are
unallowable costs on Government contracts and under the Medicare Program,
Medicaid Program, TRICARE Program, and Federal Employees Health Benefits Program
(FEHBP).

(All costs described or set forth in this Paragraph 15(a) are hereafter,
"unallowable costs").

                  (b)      Future Treatment of Unallowable Costs: These
unallowable costs will be separately estimated and accounted for by HCA, and HCA
will not charge such unallowable costs directly or indirectly to any contracts
with the United States or any State Medicaid Program, or seek payment for such
unallowable

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   20

costs through any cost report, cost statement, information statement, or payment
request submitted by HCA or any of its subsidiaries to the Medicare, Medicaid,
TRICARE, or FEHBP Programs.

                  (c)      Treatment of Unallowable Costs Previously Sought: HCA
further agrees that within 60 days of the effective date of this Agreement it
will identify to applicable Medicare and TRICARE fiscal intermediaries,
carriers, and/or contractors, and Medicaid, VA and FEHBP fiscal agents, any
unallowable costs (as defined in this Paragraph) included in payments previously
sought from the United States, or any State Medicaid Program, including, but not
limited to, payments sought in any cost reports, cost statements, information
reports, or payment requests already submitted by HCA or any of its
subsidiaries, and will request, and agree, that such cost reports, cost
statements, information reports, or payment requests, even if already settled,
be adjusted to account for the effect of the inclusion of the unallowable costs.
HCA agrees that the United States will be entitled to recoup from HCA any
overpayment as a result of the inclusion of such unallowable costs on
previously-submitted cost reports, information reports, cost statements, or
requests for payment. Any payments due after the adjustments have been made
shall be paid to the United States pursuant to the direction of the Department
of Justice, and/or the affected agencies. The


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   21

United States reserves its rights to disagree with any calculations submitted by
HCA or any of its subsidiaries on the effect of inclusion of unallowable costs
(as defined in this Paragraph) on HCA or any of its subsidiaries' cost reports,
cost statements, or information reports. Nothing in this Agreement shall
constitute a waiver of the rights of the United States to examine or reexamine
the unallowable costs described in this Paragraph.

         16.      HCA agrees to cooperate fully and completely with the United
States in any criminal, civil and/or administrative investigations and
proceedings of any present and former officers, directors, employees and agents,
and of any parties with whom it had or has a business or professional
relationship with respect to the Covered Conduct. HCA will itself provide
information through testimony and/or oral briefings by competent corporate
representatives upon request of the United States. HCA will furnish to the
United States, upon reasonable request, complete and un-redacted copies of all
non-privileged documents, reports, memoranda of interviews, and records in its
possession, custody, or control concerning any investigation of the Covered
Conduct which it has undertaken, or which has been performed by others on its
behalf, and agrees that it will not assert any claim of privilege with respect
to information requested by the United States to establish the authenticity or
evidentiary

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   22

foundation for the non-privileged information it has provided. HCA agrees not to
impair, and, upon reasonable notice, will encourage, the cooperation of its
directors, officers, employees and agents in any investigation of the Covered
Conduct. HCA also agrees to use its best efforts to make available, and
encourage the cooperation of, former directors, officers and employees for
interviews and testimony, consistent with the rights and privileges of such
individuals in any investigation of the Covered Conduct. The obligations
referred to in this Paragraph shall in no way limit HCA's obligations under any
other agreement with the United States or the States, including, but not limited
to, the Plea Agreement that HCA is entering with the United States.

         17.      This Agreement is intended to be for the benefit of the
Parties and the States only, and by this instrument the Parties and the States
do not release any claims against any other person or entity, except to the
extent specifically provided for in this Agreement.

         18.      HCA agrees that it will not seek payment for any of the health
care billings covered by this Agreement from any health care beneficiaries or
their parents or sponsors. HCA waives any causes of action against these
beneficiaries or their sponsors or responsible parties based upon the claims for
payment covered by this Agreement.

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   23

         19.      Except as may be expressly provided to the contrary in this
Agreement, each party to this Agreement will bear its own legal and other costs
incurred in connection with this matter, including the preparation and
performance of this Agreement.

         20.      This Agreement is governed by the laws of the United States.
The Parties agree that the exclusive jurisdiction and venue for any dispute
arising between and among the Parties under this Agreement will be the United
States District Court for the District of Columbia, except that disputes arising
under the Corporate Integrity Agreement shall be resolved exclusively under the
dispute resolution provisions in the Corporate Integrity Agreement and disputes
arising under the separate agreements with the States shall be governed by the
relevant provisions of those agreements.

         21.      This Agreement may not be amended except by written consent of
the Parties, except that only HCA and OIG-HHS must agree in writing to
modification of the Corporate Integrity Agreement.

         22.      The undersigned individuals signing this Agreement on behalf
of HCA represent and warrant that they are authorized by HCA to execute this
Agreement. The undersigned United States signatories represent that they are
signing this Agreement in

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   24

their official capacities and that they are authorized to execute this
Agreement.

         23.      This Agreement may be executed in counterparts, each of which
constitutes an original and all of which constitute one and the same agreement.

         24.      This Agreement is binding on HCA's successors, transferees,
heirs, and assigns.

         25.      This Agreement is effective on the date of signature of the
last signatory to the Agreement. Facsimiles of signatures shall constitute
acceptable, binding signatures for purposes of this Settlement Agreement.

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   25

                          THE UNITED STATES OF AMERICA



DATED: December 14, 2000                       BY: /s/ Joyce R. Branda
       -----------------------------               ----------------------------
                                                   JOYCE R. BRANDA
                                                   DEPUTY DIRECTOR
                                                   COMMERCIAL LITIGATION BRANCH
                                                   CIVIL DIVISION
                                                   U.S. DEPARTMENT OF JUSTICE

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   26

DATED:       12/13/00                          BY:      /s/ LEWIS MORRIS
       -----------------------------               ----------------------------
                                                   LEWIS MORRIS
                                                   ASSISTANT INSPECTOR GENERAL
                                                   OFFICE OF COUNSEL TO THE
                                                   INSPECTOR GENERAL
                                                   OFFICE OF INSPECTOR GENERAL
                                                   UNITED STATES DEPARTMENT OF
                                                   HEALTH AND HUMAN SERVICES

CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   27

DATED:       12/12/00                          BY:   /s/  ROBERT L. SHEPHERD
       -----------------------------               ----------------------------
                                                   ROBERT L. SHEPHERD
                                                   DEPUTY GENERAL COUNSEL
                                                   TRICARE MANAGEMENT ACTIVITY
                                                   UNITED STATES DEPARTMENT
                                                   OF DEFENSE


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   28

DATED:           12-13-00                      BY: /s/ William E. Flynn III
       -----------------------------               ----------------------------
                                                   WILLIAM E. FLYNN III
                                                   ASSOCIATE DIRECTOR FOR
                                                   RETIREMENT AND INSURANCE
                                                   SERVICE
                                                   UNITED STATES OFFICE OF
                                                      PERSONNEL MANAGEMENT


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   29

DATED:           12-14-01                      BY: /s/ E. Jeremy Hutton
       -----------------------------               ----------------------------
                                                   E. JEREMY HUTTON
                                                   ASSISTANT INSPECTOR GENERAL
                                                   FOR LEGAL AFFAIRS
                                                   UNITED STATES OFFICE OF
                                                   PERSONNEL MANAGEMENT


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA


   30

                          HCA - The Healthcare Company




DATED:    12/14/00                             BY: /s/ Robert A. Waterman
       -----------------------------               ----------------------------
                                                   ROBERT A. WATERMAN
                                                   GENERAL COUNSEL
                                                   HCA



DATED:     12/14/00                            BY: /s/ Cathryn L. Sowers
       -----------------------------               ----------------------------
                                                   CATHRYN L. SOWERS
                                                   VICE PRESIDENT
                                                   LITIGATION
                                                   HCA


DATED:   12/14/00                              BY: /s/ Roger S. Goldman
       -----------------------------               ----------------------------
                                                   ROGER S. GOLDMAN
                                                   LATHAM & WATKINS
                                                   COUNSEL FOR HCA


DATED:   12/14/00                              BY: /s/ Craig Holden
       -----------------------------               ----------------------------
                                                   S. CRAIG HOLDEN
                                                   OBER, KALER, GRIMES & SHRIVER
                                                   COUNSEL FOR HCA


CIVIL AND ADMINISTRATIVE SETTLEMENT AGREEMENT
BETWEEN U.S. & HCA

EX-99.3

   1
                                                                    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


   2

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:



   3

         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);



   4

         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,



   5

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



   6

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



   7

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



   8

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



   9

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



   10

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



   11

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



   12

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



   13

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



   14

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



   15

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



   16

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



   17

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



   18

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



   19

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



   20

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


                                       20
   21
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

EX-99.4

   1
                                                                    EXHIBIT 99.4

                          CORPORATE INTEGRITY AGREEMENT
                                   BETWEEN THE
                           OFFICE OF INSPECTOR GENERAL
                                     OF THE
                     DEPARTMENT OF HEALTH AND HUMAN SERVICES
                                       AND
                           HCA-THE HEALTHCARE COMPANY

I.     PREAMBLE

       HCA--The Healthcare Company ("HCA") hereby enters into this Corporate
Integrity Agreement ("CIA") with the Office of Inspector General ("OIG") of the
United States Department of Health and Human Services ("HHS") to promote
compliance by itself, its subsidiaries, and their employees, contractors,
agents, and physicians with the requirements of Medicare, Medicaid and all other
Federal health care programs (as defined in 42 U.S.C. ss.
1320a-7b(f))(hereinafter collectively referred to as the "Federal health care
programs.") This CIA shall be applicable only to those operations of HCA that
are subject to United States law and regulations. HCA's compliance with the
terms and conditions in this CIA shall constitute an element of HCA's present
responsibility with regard to participation in the Federal health care programs.
Whenever the term "HCA" is used in this CIA, it includes all of HCA's
subsidiaries, as defined in this agreement. Contemporaneously with this CIA, HCA
is entering into a Settlement



                                        1


   2

Agreement with the United States, and this CIA is incorporated by reference into
the Settlement Agreement. HCA currently operates an Ethics and Compliance
Program, which HCA agrees to operate in a manner consistent with the terms of
this CIA.

II.    TERM OF THE CIA AND DEFINITIONS

       A. Term. The period of the compliance obligations assumed by HCA under
this CIA shall be eight years from the effective date of this CIA (unless
otherwise specified). The effective date of this CIA shall be the date that the
court(s) accept the plea(s) and impose a sentence in the criminal proceedings
related to the plea agreement entered into between HCA and the United States on
or about the date of the signing of this CIA. Sections VII, VIII, IX, X and XI
of this CIA shall remain in effect until OIG has completed its review of the
final annual report and any additional materials submitted by HCA pursuant to
OIG's request. The compliance obligations of the Corporate Integrity Agreement
in place for Lanier Park Hospital in Gainesville, Georgia, shall not apply to
the time period beginning on the effective date of this CIA (sections II.D,
II.E, III, V, and VI of the Lanier Park CIA shall remain in effect until OIG has
completed its review of the most recent annual report and any additional
materials submitted by HCA pursuant to OIG's request), and upon the effective
date of this CIA Lanier Park Hospital shall be subject to the provisions of this
CIA to the same extent as other HCA facilities.



                                        2


   3

       B. Definitions. For the purposes of this CIA, the following terms have
the following meanings.

              1. Covered Person: (a) any officer, director, or employee of HCA
or any of its subsidiaries; or (b) any agent or other individual who furnishes
health care items or services to any Federal health care program beneficiary at
a facility owned or operated by HCA or any of its subsidiaries for which HCA or
any of its subsidiaries claims reimbursement from any Federal health care
program. Notwithstanding the above, this term does not include part-time or per
diem employees, agents or other individuals who are not reasonably expected to
work more than 160 hours per year, except that any such individuals shall become
"Covered Persons" at the point when they work more than 160 hours during the
calendar year.

              2. Subsidiary: any corporation or other entity that provides items
or services for which payment may be made by any Federal health care program, or
prepares or submits requests for such payment, and in which HCA (i) has at least
a 50% ownership interest, or (ii) has at least a 5% ownership interest and
either manages or controls.

              3. Covered Contractor: any agent or other individual (who is not a
covered person) who prepares claims, cost reports, or other requests for
reimbursement from any Federal health care program on behalf of HCA or any of
its subsidiaries on a regular basis (i.e., for more than 80 hours within the
calendar year).




                                             3


   4


III.   CORPORATE INTEGRITY OBLIGATIONS

       HCA shall ensure that its Ethics and Compliance Program includes the
following elements during the term of this CIA.

       A.  Compliance Officers and Committees.

              1. Ethics, Compliance and Corporate Responsibility Committee of
the Board of Directors. HCA currently has an Ethics, Compliance and Corporate
Responsibility Committee of the Board of Directors ("Board Committee") comprised
of five outside directors of HCA. The Board Committee is responsible for the
review of matters related to the Ethics and Compliance Program, this CIA, and
compliance with requirements of Federal health care programs. The Board
Committee shall meet at least quarterly. When new members of the Board Committee
are appointed or the responsibilities or authorities of the Board Committee are
substantially changed, HCA shall notify the OIG, in writing, within 15 days of
such a change.

              2. Senior Vice President for Compliance. HCA currently has a
Senior Vice President for Ethics, Compliance, and Corporate Responsibility
("SVP- Compliance"). The SVP-Compliance is and shall be responsible for
developing and implementing policies, procedures, and practices designed to
ensure compliance with the requirements set forth in this CIA and with the
requirements of the Federal health care programs. The SVP-Compliance is and
shall be a member of senior management of HCA, shall make



                                        4


   5
regular (at least quarterly) reports regarding compliance matters directly to
the CEO and/or to the Board of Directors (including the Board Committee) of HCA,
and shall be authorized to report to the Board of Directors (including the Board
Committee) at any time. The SVP-Compliance shall be responsible for monitoring
the day-to-day activities engaged in by HCA to further its compliance objectives
as well as for any reporting obligations created under this CIA. In the event a
new SVP- Compliance is appointed or the responsibilities or authorities of the
SVP-Compliance are substantially changed, HCA shall notify the OIG, in writing,
within 15 days of such a change.

              3. Ethics, Compliance and Corporate Responsibility Department. HCA
currently has an Ethics, Compliance and Corporate Responsibility Department ("EC
Department"). The EC Department is managed by the SVP-Compliance and is
responsible for the operation of the Ethics and Compliance Program and for
compliance with the requirements of this CIA and of the Federal health care
programs. In the event the responsibilities or authorities of the EC Department
are substantially changed, HCA shall notify the OIG, in writing, within 15 days
of such a change.

              4. Local Ethics and Compliance Officers. HCA currently has a Local
Ethics and Compliance Officer ("ECO") at each of its facilities (for the purpose
of this CIA, a "facility" is any hospital, ambulatory surgery center, clinic or
group of clinics, or other location where health care items or services are
provided by HCA or one of its



                                       5
   6

subsidiaries). Each ECO shall have sufficient management responsibility so as
permit the effective performance of his or her duties. Each ECO is responsible
for implementation and oversight of the Ethics and Compliance Program at the
facility and for the facility's compliance with the requirements of this CIA and
of the Federal health care programs. HCA shall make proper execution of ECO
duties a major component of the performance evaluations of ECOs. HCA shall
continually assess the effectiveness of ECOs and the methods and findings of any
such assessments shall be made available to the OIG upon request. HCA shall not
implement any substantial change in the responsibilities or authorities of the
ECOs relating to HCA's Ethics and Compliance Program without prior written
approval from the OIG.

              5. Corporate Ethics and Compliance Committees. HCA currently has a
Corporate Ethics and Compliance Steering Committee ("Compliance Steering
Committee"). The Compliance Steering Committee is chaired by the SVP-Compliance
and includes the Corporate CEO, COO, the two group presidents, and certain
senior vice presidents. The Compliance Steering Committee oversees the
effectiveness of the Ethics and Compliance Program and makes decisions on
investments in the Program. The Compliance Steering Committee shall be
responsible for overseeing the implementation of the requirements of this CIA.
HCA also currently has a Corporate Ethics and Compliance Policy Committee
("Compliance Policy Committee"). The Compliance




                                       6
   7

Policy Committee is chaired by the SVP-Compliance and includes the group CFOs,
three hospital presidents, a number of senior vice presidents, e.g., Internal
Audit, General Counsel, Quality, Information Systems, Human Resources,
Government Programs, and executives representing major compliance areas, such as
coding, billing, physician relationships, and cost reports. The Compliance
Policy Committee reviews and approves all compliance-related policies. The two
committees shall conduct at least 12 meetings per year in aggregate. The
committees shall keep a record of their proceedings that shall be available to
the OIG upon request.

              6. Hospital Compliance Committees. Each Hospital shall have a
Hospital Ethics and Compliance Committee ("Hospital Committee"). The Hospital
Committee shall be chaired by the ECO of the facility and include the heads of
each of the facility's major compliance-related departments. The Hospital
Committee shall be responsible for assisting the ECO in implementing the Ethics
and Compliance Program, and ensuring compliance by the facility with this CIA
and the requirements of Federal health care programs. The Hospital Committee
shall also be responsible for reporting on compliance issues to the ECO.

              7. Responsible Executives. HCA has designated certain individuals
("Responsible Executives") to be responsible for development and implementation
of a portion of the Ethics and Compliance Program related to a specific
compliance risk area.



                                       7
   8

For example, the Vice President, Health Information Management Services, is the
Responsible Executive for coding compliance. The Responsible Executives work
with the SVP-Compliance, EC Department, Compliance Policy Committee, and others
to develop, oversee, monitor, and implement compliance policies within their
designated areas of responsibility. HCA shall not discontinue or materially
alter its current Responsible Executive structure without written approval from
the OIG.

       B.  Written Standards.

              1. Code of Conduct. HCA currently has a Code of Conduct. HCA has
implemented a program to distribute the Code of Conduct to covered persons. HCA
shall make the promotion of, and adherence to, the Code of Conduct an element in
evaluating the performance of managers, supervisors, and all other employees.
HCA has implemented a program to obtain an acknowledgment from each covered
person that he or she has received HCA's Code of Conduct and understands that it
represents the mandatory policies of the organization. Within 90 days of the
effective date of this CIA, HCA shall obtain a certification from each of its
facilities and corporate departments that, based on information and belief, this
distribution and acknowledgment process is complete. New covered persons shall
receive the Code of Conduct and shall complete the required acknowledgment
within 30 days after becoming a covered person. HCA shall annually review the
Code of Conduct and shall make any necessary revisions. These



                                       8
   9

revisions shall be distributed as expeditiously as possible after initiating
such a change and no later than 30 days after the effective date of the revised
Code of Conduct. HCA shall implement a program to obtain an acknowledgment from
each covered person that he or she has received the revised Code of Conduct,
understands that it represents the mandatory policies of the organization, and
agrees to abide by it. Within 90 days of the effective date of the revised Code
of Conduct, HCA shall obtain a certification from each of its facilities and
corporate departments that, based on information and belief, this distribution
and acknowledgment process is complete. HCA shall obtain the acknowledgments and
certifications described in the preceding two sentences every time that a
revised Code of Conduct is distributed (but in any event no less frequently than
every three years).

              2. Covered Contractor Requirements. HCA shall require a Covered
Contractor to: (a) agree to abide by HCA's Code of Conduct or adopt its own Code
of Conduct substantially similar to HCA's Code of Conduct; (b) distribute either
(i) HCA's Code of Conduct or (ii) its Code of Conduct and information about
HCA's Confidential Disclosure Program (including the Ethics Line number) to
employees working on HCA matters; and, (c) certify to HCA that employees working
on HCA matters have received a copy of (i) HCA's Code of Conduct or (ii) its
Code of Conduct and information about HCA's Confidential Disclosure Program
(including the Ethics Line number). Where the



                                       9
   10

Covered Contractor is a solo practitioner, the Covered Contractor must be
provided with HCA's Code of Conduct and certify that he or she will abide by it.

              3. Policies and Procedures. HCA is developing written compliance
Policies and Procedures. Prior to the effective date of this CIA, HCA has
implemented many such Policies and Procedures and provided them to the OIG. HCA
shall assess and update as necessary the Policies and Procedures at least
annually and more frequently, as appropriate. HCA shall provide a summary of
changes to its Policies and Procedures in its Annual Reports under this CIA and
the current Policies and Procedures shall continue to be available to OIG upon
request. HCA represents that it has distributed its Policies and Procedures to
its facilities. Compliance staff at both the facilities and the corporate
headquarters, including the Responsible Executives, shall be available to
explain any and all Policies and Procedures.

       C. Training and Education. HCA shall meet the following training
requirements. The training requirements are cumulative (not exclusive) so that
one person may be required to attend training in several substantive areas in
addition to the general training. All training requirements set forth below in
paragraphs 1 to 5 shall be implemented as specified below. With respect to the
initial training required to be provided within a certain time period after the
effective date of this CIA, HCA need not provide such training to persons who
have received training in the six-month period prior to the



                                       10
   11

effective date of this CIA, if the training provided meets all the subject
matter and duration requirements that would apply to the initial training under
the CIA.

              1. General Training. HCA shall provide at least two hours of
training initially (within 90 days of the effective date of this CIA) to each
covered person, and one hour of refresher training annually thereafter. The
training shall cover HCA's Ethics and Compliance Program, its Code of Conduct,
and the requirements of this CIA. The training conducted by HCA when it issued
its Code of Conduct, One Clear Voice, and its ethics and compliance refresher
training, Commitments We Share, and/or its revised Code of Conduct, A Tradition
of Caring, (all of which explained HCA's Ethics and Compliance Program and its
Code of Conduct) regardless of the date the training occurred will satisfy this
requirement for training within 90 days notwithstanding the fact that such
training did not cover the CIA. Covered persons who have received prior training
described in the previous sentence must receive at least one hour of refresher
training (including discussion of the CIA) during the first year covered by the
CIA and annually thereafter. Within 90 days after the effective date of this
CIA, HCA shall notify all covered persons of the execution of the CIA and
provide a summary of the key provisions of this CIA through electronic mail, its
internet and/or intranet sites, newsletters, and other appropriate means. All
general training conducted after the effective date of this CIA shall include
training on the CIA.



                                       11
   12

              2. Coding Training. HCA shall continue to have in place an
introductory training course for each hospital inpatient coder, as well as an
intermediate coding course. HCA shall provide at least eight hours of coding
training to inpatient hospital coders and supervisors within 180 days of the
effective date of this CIA. HCA shall maintain its DRG coding course for
hospital inpatient coders accessible through its intranet. HCA shall maintain
and enforce its current policy requiring 30 hours of continuing education
annually for hospital inpatient coders.

              3. Billing Training. HCA shall provide training to all individuals
(including Laboratory and Business Office Directors and other billing personnel)
responsible for Federal health care program billing in their facilities. HCA
shall provide at least eight hours of such training within 180 days of the
effective date of this CIA and during each subsequent year. The training shall
include the following subject matters:

                     a. the submission of accurate bills for services rendered
                     to Federal health care program beneficiaries;

                     b. policies, procedures and other requirements applicable
                     to the documentation of medical records;

                     c. the personal obligation of each individual involved in
                     the billing process to ensure that such billings are
                     accurate;



                                       12
   13

                     d. applicable reimbursement statutes, regulations, and
                     program requirements and directives;

                     e. the legal sanctions for improper billings; and

                     f. examples of proper and improper billing practices.

              4. Cost Report Training. HCA shall ensure that covered persons who
prepare cost reports receive at least eight hours of training on preparation of
cost reports for Federal health care programs within 180 days of the effective
date of this CIA. HCA shall maintain and enforce its current practice requiring
40 hours of continuing education annually to include Federal and/or state
statutes, regulations, and guidelines, compliance, and Corporate policies for
covered persons who prepare cost reports.

              5. Physician Relations Training. Within 90 days of the effective
date of this CIA and annually thereafter, HCA shall provide at least one hour of
training to its Hospital CEOs, CFOs, and all other personnel substantially
involved in negotiating or monitoring physician relationships on the statutes
and regulations related to hospital/physician relationships (including but not
limited to 42 U.S.C. ss.ss. 1320a-7b(b) and 1395nn). HCA shall annually
distribute its physician relationship policy checklist to such personnel.

              6. Overall Compliance Training. HCA shall continue its process of
establishing individual training profiles for its employees. HCA shall pursue
the



                                       13
   14

implementation of these training profiles in order to ensure that all covered
persons are familiar with areas of compliance risk relevant to their positions.

              7. New Persons. Affected new covered persons shall receive the
General Training described in section III.C.1 above by the end of the first 30
days after the person begins work. The orientation training (which is defined as
all other training required, under section III.C, to be accomplished within 180
days or less after the effective date of this CIA) required by this CIA shall
also be promptly provided to appropriate new covered persons (but in no event
later than 90 days after the person begins work on the matter for which they
must be trained) so that the persons are fully qualified by virtue of such
training to perform whatever responsibilities may be assigned to them. In any
situation where training requirements have not been completed, a fully trained
HCA employee shall carefully monitor the work of the untrained person.

              8. Covered Contractor Requirements. HCA must document completion
of the applicable coding, billing, cost report, or physician relationships
training to employees of Covered Contractors working on HCA matters if: (i) the
Covered Contractor is a solo-practitioner; (ii) the Covered Contractor was not
retained because of its professional expertise in the area for which training is
necessary; or (iii) the Covered Contractor has not complied with the
requirements of section III.B.2. HCA is responsible for ensuring the expertise
and compliance of Covered Contractors.



                                       14
   15

              9. Certifications and Retention. HCA shall maintain sufficient
records to demonstrate that the required training has occurred. These records
shall include certifications from covered persons that they have attended the
required training. The certifications may be acquired through:
attendance/sign-in sheets for in-person group training sessions; computer
attestations for computer-based training; or similar mechanisms for other forms
of training. Facility ECOs and/or Responsible Executives shall retain training
records and certifications in a manner that permits reporting to the
SVP-Compliance to enable the SVP-Compliance to report on the training, and
provide the specific course materials and certifications, to the OIG upon
request.

       D.  Review Procedures.

              1. Retention of Independent Review Organization. HCA shall retain
an entity (or entities), such as an accounting, auditing or consulting firm
(hereinafter "Independent Review Organization" or "IRO"), to perform review
procedures to assist HCA in assessing the adequacy of its Policies and
Procedures, Ethics and Compliance Program, its compliance with this CIA, and its
compliance with the requirements of Federal health care programs. The reviews
shall be performed annually during the term of the CIA in accordance with the
attached workplans. These reviews shall cover the calendar years 2001 through
2008, unless otherwise specified in a workplan. The Independent Review
Organization used for each review must have expertise in the



                                       15
   16

matters to be reviewed and particularly with the requirements of the Federal
health care programs relevant to that area of review. The Independent Review
Organization must be retained to conduct the reviews for the first year within
90 days of the effective date of this CIA. An IRO may engage qualified sub-IROs
(including, as appropriate, law firms), as necessary and HCA shall have the
right to designate a different IRO for any particular area of compliance concern
if it believes that such different IRO would be better qualified to undertake a
particular focused review. HCA shall have the right to designate a new IRO at
any time it chooses. If HCA designates a new IRO, it shall provide written
notice to the OIG within 15 days of designating the new IRO. This written notice
will include the following: (a) the name, address, and primary contact person at
the new IRO; (b) a brief description of the qualifications of the new IRO; and
(c) a brief description of the reasons that a new IRO was designated.

              2. Types of Reviews. The IRO(s) and HCA appropriate internal
resources or directed external resources shall annually perform the reviews
described in the audit work plans ("workplans") attached to, and incorporated by
reference into, this CIA. The workplans address the following areas: (1)
Diagnosis Related Groups (DRGs); (2) Laboratory Billing; (3) Outpatient
Prospective Payment; and (4) Physician Relationships. The workplans require
reviews of systems and processes in place at HCA and its facilities, and of
claims submitted by HCA and paid by Federal health care programs (the



                                       16
   17

physician relationship workplan includes review of physician relationships
rather than claims). The reviews of claims more specifically described in the
workplans fall into two general categories: (1) probe samples of a set number of
claims (with no pre-determined statistical confidence or precision parameters);
and (2) full samples of claims from which an overpayment amount can be projected
to the total population of claims in question within pre-determined statistical
confidence and precision parameters. HCA and the IRO will evaluate the IRO work
plans annually based upon prior year results. If appropriate, HCA will submit
revised IRO work plan(s) to the OIG for its review and action.

              3. Statistical Sampling and Appraisal Methodologies for Reviews.
All matters related to this CIA and the workplans that involve statistical
sampling or appraisal, or the review of claims, including probe samples and full
samples, shall be conducted in accordance with the provisions of Appendix A to
this CIA.

              4. Ethics and Compliance Program Review. The IRO shall conduct a
compliance review providing findings regarding whether HCA's Ethics & Compliance
Program, Policies and Procedures, and operations comply with the terms of this
CIA. This review shall include section by section findings regarding the
requirements of this CIA. In addition, the IRO shall provide findings regarding
whether HCA has complied with its obligation under the Settlement Agreement: (a)
not to resubmit to any Federal health care program payors any previously denied
claims related to the conduct addressed



                                       17
   18

in the Settlement Agreement, and its obligation not to appeal any such denials
of claims; and (b) not to charge to, or otherwise seek payment from, federal or
state payors for unallowable costs (as defined in the Settlement Agreement) and
its obligation to identify and adjust any past charges of unallowable costs.

              5. Review Reports. HCA and the IRO(s) shall annually produce
reports corresponding to all of the required reviews and including all of the
information required by this section of the CIA, workplans, and the Claims
Review Reports described in Appendix A. A complete copy of all of the reports
for the reporting year shall be included in each of HCA's Annual Reports to OIG.

              6. Verification/Validation. In the event that the OIG has reason
to believe that any of HCA's reviews fail to conform to its obligations under
the CIA or indicates improper billings not otherwise adequately addressed in the
audit report, and thus determines that it is necessary to conduct an independent
review to determine whether or the extent to which HCA is complying with its
obligations under this CIA, HCA agrees to pay for the reasonable cost of any
such review by the OIG or any of its designated agents. Prior to proceeding with
such an independent review, the OIG shall notify HCA of its intent to do so and
its reasons for believing such a review is necessary, and shall attempt to
resolve any issues without proceeding with an independent review. This attempt
to resolve issues may include permitting HCA to recommend further work it or the
IRO may



                                       18
   19

undertake to address the OIG's concerns. However, it shall remain in the sole
discretion of the OIG to proceed with an independent review as described above.

       E. Confidential Disclosure Program. HCA has established a Confidential
Disclosure Program. HCA provides a toll free "Ethics Line" to enable employees,
contractors, agents or other individuals to disclose, to the EC Department or
some other person who is not in the disclosing individual's chain of command,
any identified issues or questions associated with HCA's Policies and
Procedures, practices, or operations with respect to any Federal health care
program, believed by the individual to be inappropriate. HCA shall continue to
publicize the existence of the Ethics Line to all covered persons. HCA has
established a Policy governing its handling of disclosures made through the
Ethics Line. HCA shall continue to operate the Ethics Line through such Policy.
HCA shall continue to forbid retribution or retaliation for disclosures and
allow for anonymous, confidential disclosures. The EC Department shall maintain
a confidential disclosure log, which shall include a record and summary of each
allegation received, the status of the respective investigations, and any
corrective action taken in response to the investigation.

       F.  Ineligible Persons.

              1. Definition. For purposes of this CIA, an "Ineligible Person"
shall be any individual or entity who: (i) is currently excluded, debarred, or
otherwise ineligible to participate in the Federal health care programs; or (ii)
has been convicted of a criminal



                                       19
   20

offense related to the provision of health care items or services but has not
yet been excluded, debarred, or otherwise declared ineligible.

              2. Screening Requirements. HCA shall not hire or engage as
contractors, or grant staff privileges to, any Ineligible Person. To prevent
hiring or contracting with, or granting staff privileges to, any Ineligible
Person, HCA shall screen all prospective employees and prospective contractors
prior to engaging their services and screen physicians prior to granting staff
privileges by (i) requiring applicants to disclose whether they are Ineligible
Persons, and (ii) reviewing the General Services Administration's List of
Parties Excluded from Federal Programs (available through the Internet at
http://epls.arnet.gov) and the HHS/OIG List of Excluded Individuals/Entities
(available through the Internet at http://www.hhs.gov/oig) (these lists will
hereinafter be referred to as the "Exclusion Lists").

              3. Review and Removal Requirement. HCA has reviewed its list of
current employees and contractors paid through automated means against the
Exclusion Lists. Within 180 days of the effective date of this CIA, HCA shall
review its list of current physicians with staff privileges against the
Exclusion Lists. HCA shall review the lists of employees, contractors, and
physicians with staff privileges against the Exclusion Lists at least
semi-annually during the duration of this CIA. In addition, HCA shall require
employees, contractors and physicians with staff privileges to disclose
immediately any



                                       20
   21

debarment, exclusion or other event that makes the person an Ineligible Person.
If HCA has notice that an employee, agent, or physician has become an Ineligible
Person, HCA shall remove such person from responsibility for, or involvement
with, HCA's business operations related to the Federal health care programs and
shall remove such person from any position for which the person's salary or the
items or services rendered, ordered, or prescribed by the person are paid in
whole or part, directly or indirectly, by Federal health care programs or
otherwise with Federal funds at least until such time as the person is
reinstated into participation in the Federal health care programs.

              4. Pending Charges and Proposed Exclusions. If HCA has notice that
an employee or contractor is charged with a criminal offense related to any
Federal health care program, or is proposed for exclusion during his or her
employment or contract, HCA shall take all appropriate actions to ensure that
the responsibilities of that employee or contractor have not and shall not
adversely affect the quality of care rendered to any beneficiary, patient or
resident, or the accuracy of any claims submitted to any Federal health care
program.

       G. Notification of Proceedings. Within 30 days of discovery by HCA, HCA
shall notify OIG, in writing, of any ongoing investigation or legal proceeding
conducted or brought by a governmental entity or its agents involving an
allegation that HCA has committed a crime or has engaged in fraudulent
activities. This notification shall include



                                       21
   22

a description of the allegation, the identity of the investigating or
prosecuting agency, and the status of such investigation or legal proceeding.
HCA shall also provide written notice to OIG within 30 days of the resolution of
the matter, and shall provide OIG with a description of the findings and/or
results of the proceedings, if any.

       H.  Reporting.

              1.  Overpayments

                     a. Definition of Overpayments. For purposes of this CIA, an
                     "overpayment" shall mean the amount of money HCA has
                     received in excess of the amount due and payable under any
                     Federal health care program requirements. HCA may not
                     subtract any underpayments for purposes of determining the
                     amount of relevant "overpayments."

                     b. Reporting of Overpayments. If, at any time, HCA
                     identifies or learns of any overpayments, HCA shall notify
                     the payor (e.g., Medicare fiscal intermediary or carrier)
                     and repay any identified overpayments within 30 days of
                     identification and take remedial steps within 60 days of
                     identification (or such additional time as may be agreed to
                     by the payor) to correct the problem, including preventing
                     the underlying problem and the overpayments from



                                       22
   23

                     recurring. Also, within 30 days of identification of the
                     overpayment, HCA shall repay the overpayment to the
                     appropriate payor to the extent such overpayment has been
                     quantified (submission of corrected bills in conformance
                     with payor policy within 30 days fulfills this
                     requirement). If not yet quantified, within 30 days of
                     identification, HCA shall notify the payor of its efforts
                     to quantify the overpayment amount along with a schedule of
                     when such work is expected to be completed. Notification
                     and repayment to the contractor should be done in
                     accordance with the contractor policies. For Medicare
                     overpayments identified through HCA's Ethics and Compliance
                     Program and/or the processes required under this CIA,
                     (including internal and IRO audits, Ethics Line cases, or
                     other corporate-level monitoring or review), the notice to
                     the contractor must include the information contained on
                     the Overpayment Refund Form, attached to this as Appendix B
                     to this CIA (unless the contractor has authorized the form
                     not to be submitted for this particular type of claim
                     correction).



                                       23
   24

              2.  Reportable Events.

                     a. Definition of Reportable Event. For purposes of this
                     CIA, a "Reportable Event" means anything that involves:

                            (i) a substantial overpayment; or

                            (ii) a matter that a reasonable person would
                            consider a potential violation of any criminal,
                            civil, or administrative statute or regulation
                            applicable to any Federal health care program for
                            which criminal penalties, civil monetary penalties,
                            or exclusion may be authorized.

                     A Reportable Event may be the result of an isolated event
                     or a series of occurrences.

                     b. Reporting of Reportable Events. If HCA determines that
                     there is a Reportable Event, HCA shall notify OIG, in
                     writing, within 30 days of making the determination that
                     the Reportable Event exists. The report to the OIG shall
                     include the following information:

                            (i) If the Reportable Event results in an
                            overpayment, the report to the OIG shall be made at
                            the same time as the notification to the payor
                            required in section III.H.1, and shall include all
                            of the information on the Overpayment Refund Form,
                            as well as:



                                       24
   25

                                   (A) the payor's name, address, and contact
                                   person to whom the overpayment was sent; and

                                   (B) the date of the check and identification
                                   number (or electronic transaction number) on
                                   which the overpayment was repaid/refunded;

                            (ii) a complete description of the Reportable Event,
                            including the relevant facts, persons involved, and
                            legal and Federal health care program authorities
                            implicated;

                            (iii) a description of HCA's actions taken to
                            correct the Reportable Event; and

                            (iv) any further steps HCA plans to take to address
                            the Reportable Event and prevent it from recurring.

       I. Corrective Actions Related to Investigation of Physician
Relationships. In the context of the investigation, self-audit, and settlement
discussions related to the issue of physician relationships, certain such
relationships have been identified as anomalies. HCA shall take appropriate
measures to review these anomalous relationships. Those relationships that are
determined by HCA to be non-compliant shall be terminated or amended to conform
to HCA's Ethics and Compliance Program and the requirements of the Federal
health care programs. HCA shall report on these measures as



                                       25
   26

required in section V and all supporting documents shall be available to the OIG
upon request.

IV.    NEW AND DIVESTED LOCATIONS

       In the event that HCA: (1) purchases or establishes a new hospital,
freestanding ambulatory surgery center, home health agency, or another line of
business that provides services that are billed to Federal health care programs;
or (2) sells or divests an existing hospital, freestanding ambulatory surgery
center, or home health agency, HCA shall notify OIG of this fact within 30 days
of the date of purchase, establishment, sale, or divestiture. This notification
shall include the location of the operation(s), telephone number, fax number,
Federal health care program provider number(s) (if any), and the corresponding
payor(s) (contractor specific). All covered persons at new locations shall be
subject to the requirements in this CIA that apply to new covered persons (e.g.,
completing certifications and undergoing training). If HCA sells all of the
assets or its ownership interest related to a location, then that location shall
no longer be considered part of HCA for the purposes of this CIA. If the
location is still owned or operated in whole or in part by HCA or any of its
subsidiaries or their successors, then the location shall continue to be
considered part of HCA for the purposes of this CIA. If a hospital or ambulatory
surgery center shall no longer be subject to the CIA due to a sale or transfer
from HCA, HCA shall require as a condition of the sale that buyer or transferee



                                       26
   27

represents and agrees that it has or shall implement and maintain with respect
to its operations of the facility an effective program to prevent and detect
violations of the legal requirements applicable to the delivery of goods and
services in connection with any health care benefits and that such a program
will comply with the provisions of the U.S. Sentencing Guidelines relating to
corporate compliance programs and will be mindful of any applicable guidance
issued by the OIG or other components of HHS; and that the buyer or transferee
agrees that it will maintain such program for no less than five years from the
date of sale or transfer.

V.     IMPLEMENTATION AND ANNUAL REPORTS

       A. Implementation Report. Within 120 days after the effective date of
this CIA, HCA shall submit a written report to OIG summarizing the status of its
implementation of the requirements of this CIA. This Implementation Report shall
include:

              1. the name, title, address, facility name (if applicable), and
              telephone number of all of the individuals who are in positions,
              or on committees, described in section III.A (except that with
              respect to section III.A.6 only, the SVP-Compliance shall certify
              that the Hospital Committees are in place as required and the
              information otherwise required by this section shall be available
              to the OIG upon request);



                                       27
   28

              2. the copy of all Policies and Procedures required by section
              III.B.2 that have not been previously provided to the OIG;

              3. a description of the training required by section III.C,
              including a description of the targeted audiences and a schedule
              of when the training sessions were held;

              4. a certification by the SVP-Compliance that:

                     a. the Policies and Procedures required by section III.B
                     have been developed and implemented, and have been
                     distributed to all pertinent covered persons;

                     b. all covered persons have completed the Code of Conduct
                     certification required by section III.B.1; and

                     c. all covered persons have completed the training and
                     executed the certification required by section III.C.

              5. the identity of the Independent Review Organization(s) and the
              proposed start and completion date of the first set of reviews by
              the Independent Review Organization(s) and appropriate HCA
              internal resources or directed external resources;

              6. a summary of personnel actions taken pursuant to section III.F
              (other than hiring or granting of staff privileges);



                                       28
   29

              7. a summary of the actions taken to ensure that the anomalous
              physician relationships identified in the investigation,
              self-audit, and settlement discussions have been reviewed, and
              terminated or amended, as appropriate, in conformance with section
              III.I.;

              8. a list of all of HCA's locations (including physical locations
              and mailing addresses), the corresponding name under which each
              location is doing business, the corresponding phone numbers and
              fax numbers, each location's Medicare provider identification
              number(s), and the contractor's name and address; and

              9. To the extent not already furnished to OIG, or if modified, a
              description of HCA's corporate structure, including identification
              of any parent, sister, and other related companies, subsidiaries
              and their respective lines of business.

       B. Annual Reports. HCA shall submit to OIG Annual Reports with respect to
the status and findings of HCA's compliance activities. The first Annual Report
shall cover the time period from the effective date of this CIA through December
31, 2001 and shall be received by the OIG no later than April 30, 2002.
Subsequent Annual Reports shall cover each of the calendar years 2002 through
2008 and shall be received by the OIG no



                                       29
   30

later than April 30 of the year following the year covered in the report. Each
Annual Report shall include:

              1. any change in the identity, title, address, facility name (if
              applicable), telephone number, and position description of all of
              the individuals who are in positions, or on committees, described
              in section III.A (except that with respect to section III.A.6
              only, the SVP-Compliance shall certify that the Hospital
              Committees are in place as required and the information otherwise
              required by this section shall be available to the OIG upon
              request);

              2. a certification by the SVP-Compliance that:

                     a. all covered persons have completed the annual Code of
                     Conduct certification required by section III.B.1;

                     b. all covered persons have completed the training and
                     executed the certification required by section III.C; and

                     c. HCA has complied with the following specified
                     obligations under the Settlement Agreement: (i) not to
                     resubmit to any Federal health care program payors any
                     previously denied claims related to the conduct addressed
                     in the Settlement Agreement, and its obligation not to
                     appeal any such denials of claims; and (ii) not to charge
                     to or otherwise seek payment from federal or state payors
                     for unallowable



                                       30
   31

                     costs (as defined in the Settlement Agreement) and its
                     obligation to identify and adjust any past charges of
                     unallowable costs.

              3. notification of any changes or amendments to the Policies and
              Procedures referenced in section III.B and the reasons for such
              changes (e.g., change in contractor policy);

              4. a complete copy of the reports prepared pursuant to the reviews
              required in section III.D, including a copy of the methodologies
              used, along with a copy of the IRO's engagement letter;

              5. HCA's response/corrective action plan to any issues raised in
              the reviews conducted under section III.D;

              6. a summary of Reportable Events required to be identified and
              reported by section III.H and an update on corrective actions
              taken in response to such Reportable Events;

              7. a report of the aggregate overpayments identified through HCA's
              Ethics and Compliance Program and/or the processes required under
              this CIA, (including internal and IRO audits, Ethics Line cases,
              or other corporate-level monitoring or review) that have been
              returned to the Federal health care programs. Overpayment amounts
              shall be broken down into the following categories: inpatient
              Medicare; outpatient Medicare; Medicaid



                                       31
   32

              (report each applicable state separately); and other Federal
              health care programs;

              8. a copy of the confidential disclosure log required by section
              III.E and a description of any changes to the Confidential
              Disclosure Program or Ethics Line referenced in that section;

              9. a description of any personnel actions (other than hiring or
              granting staff privileges) taken by HCA as a result of the
              obligations in section III.F; and, with respect to any person that
              falls within the ambit of section III.F.4, the name, title, and
              responsibilities of the person, and the actions taken by HCA in
              response to the obligations set forth in that section;

              10. a summary describing any ongoing investigation or legal
              proceeding conducted or brought by a governmental entity involving
              an allegation that HCA has committed a crime or has engaged in
              fraudulent activities, which is required to be reported by section
              III.G. The statement shall include a description of the
              allegation, the identity of the investigating or prosecuting
              agency, and the status of such investigation, legal proceeding or
              requests for information;

              11. to the extent that such relationships still exist and have not
              been appropriately altered and reported in an earlier report to
              the OIG, a



                                       32
   33

              summary of the actions taken to ensure that the anomalous
              physician relationships identified in the investigation,
              self-audit, and settlement discussions have been reviewed, and
              terminated or amended, as appropriate, in conformance with section
              III.I; and

              12. a description of all changes to the most recently provided
              list (as updated) of HCA's locations (including physical locations
              and mailing addresses) as required by section V.A.7, the
              corresponding name under which each location is doing business,
              the corresponding phone numbers and fax numbers, each location's
              Federal health care program provider identification number(s), and
              the contractor name and address that issued each provider
              identification number.

       C. Certifications. The Implementation Report and Annual Reports shall
include a certification by the SVP-Compliance that: (1) except as otherwise
explicitly described in the applicable report, HCA is in compliance with all of
the requirements of this CIA, to the best of his or her knowledge; and (2) the
SVP-Compliance has reviewed the report and has made reasonable inquiry regarding
its content and believes that the information is accurate and truthful.



                                       33
   34

VI.    NOTIFICATIONS AND SUBMISSION OF REPORTS

       Unless otherwise stated in writing subsequent to the effective date of
this CIA, all notifications and reports required under this CIA shall be
submitted to the entities listed below:

OIG:

                     Civil Recoveries Branch - Compliance Unit
                     Office of Counsel to the Inspector General
                     Office of Inspector General
                     U.S. Department of Health and Human Services
                     Cohen Building, Room 5527
                     330 Independence Avenue, SW
                     Washington, DC 20201
                     Phone  202.619.2078
                     Fax 202.205.0604


HCA:

                     Alan Yuspeh
                     Senior Vice President
                     Ethics, Compliance, and Corporate Responsibility
                     HCA-The Healthcare Company
                     One Park Plaza
                     Nashville, TN 37203
                     Phone 615.344.1005
                     Fax 615.344.1045

Unless otherwise specified, all notifications and reports required by this CIA
may be made by certified mail, overnight mail, hand delivery or other means,
provided that there is proof that such notification was received. For purposes
of this requirement, internal facsimile confirmation sheets do not constitute
proof of receipt.



                                       34
   35

VII.   OIG INSPECTION, AUDIT AND REVIEW RIGHTS

       In addition to any other rights OIG may have by statute, regulation, or
contract, OIG or its duly authorized representative(s) may examine HCA's books,
records, and other documents and supporting materials and/or conduct an on-site
review for the purpose of verifying and evaluating: (a) HCA's compliance with
the terms of this CIA; and (b) HCA's compliance with the requirements of the
Federal health care programs in which it participates. The documentation
described above shall be made available by HCA to OIG or its duly authorized
representative(s) at all reasonable times for inspection, audit or reproduction.
Furthermore, for purposes of this provision, OIG or its duly authorized
representative(s) may interview any of HCA's employees, contractors, or agents
who consent to be interviewed at the individual's place of business during
normal business hours or at such other place and time as may be mutually agreed
upon between the individual and OIG. HCA agrees to assist OIG in contacting and
arranging interviews with such individuals upon OIG's request. HCA's employees
may elect to be interviewed with or without a representative of HCA present.

VIII.  DOCUMENT AND RECORD RETENTION

       In addition to any other requirements for record retention, HCA shall
maintain for inspection all documents and records: (1) related to reimbursement
from the Federal health care programs for at least five years after the
submission of the request for



                                       35
   36

reimbursement (or longer if otherwise required); and (2) necessary to
establishing HCA's compliance with this CIA for at least three years following
the submission of the Annual Report covering the relevant year. Imaged copies of
documents shall satisfy this requirement.

IX.   DISCLOSURES

       Consistent with HHS's Freedom of Information Act ("FOIA") procedures, set
forth in 45 C.F.R. Part 5, the OIG shall make a reasonable effort to notify HCA
prior to any release by OIG of information submitted by HCA pursuant to its
obligations under this CIA and identified upon submission by HCA as trade
secrets, commercial or financial information and privileged and confidential
under the FOIA rules. With respect to such releases, HCA shall have the rights
set forth at 45 C.F.R. ss. 5.65(d). HCA shall refrain from identifying any
information as trade secrets, commercial or financial information and privileged
and confidential that does not meet the criteria for exemption from disclosure
under FOIA.

X.     BREACH AND DEFAULT PROVISIONS

       HCA is expected to fully and timely comply with all of its CIA
obligations.

       A. Stipulated Penalties for Failure to Comply with Certain Obligations.
As a contractual remedy, HCA and OIG hereby agree that failure to comply with
certain obligations set forth in this CIA may lead to the imposition of the
following monetary



                                       36
   37

penalties (hereinafter referred to as "Stipulated Penalties") in accordance with
the following provisions.

              1. A Stipulated Penalty of $2,500.00 (which shall begin to accrue
on the day after the date the obligation became due) for each day, beginning 90
days after the effective date of this CIA and concluding at the end of the term
of this CIA, HCA fails to have in place any of the following:

                     a.     all of the personnel and committees required in
                            section III.A;

                     b.     a written Code of Conduct as required in section
                            III.B.1;

                     c.     written Policies and Procedures as required in
                            section III.B.2;

                     d.     a training program as required in section III.C; and

                     e.     a Confidential Disclosure Program as required in
                            section III.E;

              2. A Stipulated Penalty of $2,500.00 (which shall begin to accrue
on the day after the date the obligation became due) for each day HCA fails meet
any of the deadlines to submit the Implementation Report or the Annual Reports
to the OIG.

              3. A Stipulated Penalty of $2,500.00 (which shall begin to accrue
on the date the failure to comply began) for each day HCA employs, contracts
with, or grants staff privileges to an Ineligible Person and that person: (i)
has responsibility for, or involvement with, HCA's business operations related
to the Federal health care programs;



                                       37
   38

or (ii) is in a position for which the person's salary or the items or services
rendered, ordered, or prescribed by the person are paid in whole or part,
directly or indirectly, by Federal health care programs or otherwise with
Federal funds (the Stipulated Penalty described in this paragraph shall not be
demanded for any time period during which HCA can demonstrate that it did not
discover the person's exclusion or other ineligibility after making a reasonable
inquiry (as described in section III.F) as to the status of the person).

              4. A Stipulated Penalty of $2,500.00 (which shall begin to accrue
on the date the HCA fails to grant access) for each day HCA fails to grant
access to the information or documentation as required in section VII of this
CIA.

              5. A Stipulated Penalty of $2,500.00 (which shall begin to accrue
on the date the failure began) for a failure by HCA to report a Reportable
Event, take corrective action, and pay the appropriate refunds, as provided in
section III.H;

              6. A Stipulated Penalty of $2,000.00 (which shall begin to accrue
10 days after the date that OIG provides notice to HCA of the failure to comply)
for each day HCA fails to comply fully and adequately with any obligation of
this CIA and such failure is not already subject to a penalty in section X.A.1
through 5 above. In its notice to HCA, the OIG shall state the specific grounds
for its determination that the HCA has failed to comply fully and adequately
with the CIA obligation(s) at issue.



                                       38
   39

       B.  Payment of Stipulated Penalties.

              1. Demand Letter. Upon a finding that HCA has failed to comply
with any of the obligations described in section X.A and determining that
Stipulated Penalties are appropriate, OIG shall notify HCA of: (a) HCA's failure
to comply; and (b) the OIG's exercise of its contractual right to demand payment
of the Stipulated Penalties (this notification is hereinafter referred to as the
"Demand Letter"). Within 10 days after receiving the Demand Letter, HCA shall
either: (a) cure the breach to the OIG's satisfaction and pay the applicable
stipulated penalties; or (b) request a hearing before an HHS administrative law
judge ("ALJ") to dispute the OIG's determination of noncompliance, pursuant to
the agreed-upon provisions set forth below in section X.D. In the event HCA
elects to request an ALJ hearing, the Stipulated Penalties shall continue to
accrue until HCA cures, to the OIG's satisfaction, the alleged breach in
dispute. Failure to respond to the Demand Letter in one of these two manners
within the allowed time period shall be considered a material breach of this CIA
and shall be grounds for exclusion under section X.C.

              2. Timely Written Requests for Extensions. HCA may submit a timely
written request for an extension of time to perform any act or file any
notification or report required by this CIA. Notwithstanding any other provision
in this section, if OIG grants the timely written request with respect to an
act, notification, or report, Stipulated



                                       39
   40

Penalties for failure to perform the act or file the notification or report
shall not begin to accrue until one day after HCA fails to meet the revised
deadline set by the OIG. Notwithstanding any other provision in this section, if
OIG denies such a timely written request, Stipulated Penalties for failure to
perform the act or file the notification or report shall not begin to accrue
until two business days after HCA receives OIG's written denial of such request.
A "timely written request" is defined as a request in writing received by OIG at
least five business days prior to the date by which any act is due to be
performed or any notification or report is due to be filed.

              3. Form of Payment. Payment of the Stipulated Penalties shall be
made by certified or cashier's check, payable to "Secretary of the Department of
Health and Human Services," and submitted to OIG at the address set forth in
section VI.

              4. Independence from Material Breach Determination. Except as
otherwise noted, these provisions for payment of Stipulated Penalties shall not
affect or otherwise set a standard for the OIG's determination that HCA has
materially breached this CIA, which decision shall be made at the OIG's
discretion and governed by the provisions in section X.C, below.



                                       40
   41

       C.  Exclusion for Material Breach of this CIA

              1. Notice of Material Breach and Intent to Exclude. The parties
agree that a material breach of this CIA by HCA constitutes an independent basis
for OIG to exclude HCA and/or any of its subsidiaries from participation in the
Federal health care programs (as defined in 42 U.S.C. ss. 1320a-7b(f)). Upon a
determination by OIG that HCA has materially breached this CIA and that
exclusion should be imposed, the OIG shall notify HCA by certified mail of: (a)
HCA's material breach; and (b) OIG's intent to exercise its contractual right to
impose exclusion (this notification is hereinafter referred to as the "Notice of
Material Breach Letter").

              2. Opportunity to Cure. HCA shall have 30 days after receiving the
Notice of Material Breach Letter to demonstrate to the OIG's satisfaction that:

                     a.     HCA is in full compliance with this CIA;

                     b.     the alleged material breach has been cured; or

                     c.     the alleged material breach cannot be cured within
                            the 30-day period, but that: (i) HCA has begun to
                            take action to cure the material breach; (ii) HCA is
                            pursuing such action with due diligence; and (iii)
                            HCA has provided to OIG a reasonable timetable for
                            curing the material breach.



                                       41
   42

              3. Exclusion Letter. If at the conclusion of the 30-day period,
HCA fails to satisfy the requirements of section X.C.2, OIG may exclude HCA
and/or any of its subsidiaries from participation in the Federal health care
programs. OIG shall notify HCA in writing of its determination to exclude HCA
and/or any of its subsidiaries (this letter shall be referred to hereinafter as
the "Exclusion Letter"). Subject to the Dispute Resolution provisions in section
X.D, below, the exclusion shall go into effect 30 days after the date of the
Exclusion Letter. The exclusion shall have national effect and shall also apply
to all other federal procurement and non-procurement programs. If HCA and/or any
of its subsidiaries is excluded under the provisions of this CIA, HCA may seek
reinstatement pursuant to the provisions at 42 C.F.R. ss.ss. 1001.3001-.3004.

              4. Material Breach. A material breach of this CIA means:

                     a. a failure by HCA to report a Reportable Event, take
                     corrective action and pay the appropriate refunds, as
                     provided in section III.H, provided that any of the
                     following individuals at HCA had notice of the Reportable
                     Event: an officer; a director; a Responsible Executive; an
                     ECO; a member of the EC Department; or an attorney in the
                     Legal Department;



                                       42
   43

                     b. repeated or flagrant violations of the obligations under
                     this CIA, including, but not limited to, the obligations
                     addressed in section X.A of this CIA;

                     c. a failure to respond to a Demand Letter concerning the
                     payment of Stipulated Penalties in accordance with section
                     X.B above; or

                     d. a failure to retain and use an Independent Review
                     Organization for review purposes in accordance with section
                     III.D.

       D.  Dispute Resolution

              1. Review Rights. Upon the OIG's delivery to HCA of its Demand
Letter or of its Exclusion Letter, and as an agreed-upon contractual remedy for
the resolution of disputes arising under the obligation of this CIA, HCA shall
be afforded certain review rights comparable to the ones that are provided in 42
U.S.C. ss. 1320a-7(f) and 42 C.F.R. Part 1005 as if they applied to the
Stipulated Penalties or exclusion sought pursuant to this CIA. Specifically, the
OIG's determination to demand payment of Stipulated Penalties or to seek
exclusion shall be subject to review by an ALJ and, in the event of an appeal,
the Departmental Appeals Board ("DAB"), in a manner consistent with the
provisions in 42 C.F.R. ss.ss. 1005.2-1005.21. Notwithstanding the language in
42 C.F.R. ss. 1005.2(c), the request for a hearing involving stipulated
penalties shall be made within 10



                                       43
   44

days of HCA receiving the Demand Letter and the request for a hearing involving
exclusion shall be made within 20 days of HCA receiving the Exclusion Letter.

              2. Stipulated Penalties Review. Notwithstanding any provision of
Title 42 of the United States Code or Chapter 42 of the Code of Federal
Regulations, the only issues in a proceeding for stipulated penalties under this
CIA shall be: (a) whether HCA was in full and timely compliance with the
obligations of this CIA for which the OIG demands payment; and (b) the period of
noncompliance. HCA shall have the burden of proving its full and timely
compliance and the steps taken to cure the noncompliance, if any. If the ALJ
finds for the OIG with regard to a finding of a breach of this CIA and orders
HCA to pay Stipulated Penalties, such Stipulated Penalties shall become due and
payable 20 days after the ALJ issues such a decision notwithstanding that HCA
may request review of the ALJ decision by the DAB.

              3. Exclusion Review. Notwithstanding any provision of Title 42 of
the United States Code or Chapter 42 of the Code of Federal Regulations, the
only issues in a proceeding for exclusion based on a material breach of this CIA
shall be: (a) whether HCA was in material breach of this CIA; (b) whether such
breach was continuing on the date of the Exclusion Letter; and (c) whether the
alleged material breach could not have been cured within the 30-day period, but
that (i) HCA had begun to take action to cure the material breach within that
period, (ii) HCA has pursued and is pursuing such action with



                                       44
   45

due diligence, and (iii) HCA provided to OIG within that period a reasonable
timetable for curing the material breach. For purposes of the exclusion herein,
exclusion shall take effect only after an ALJ decision that is favorable to the
OIG. HCA's election of its contractual right to appeal to the DAB shall not
abrogate the OIG's authority to exclude HCA and/or any of its subsidiaries upon
the issuance of the ALJ's decision. If the ALJ sustains the determination of the
OIG and determines that exclusion is authorized, such exclusion shall take
effect 20 days after the ALJ issues such a decision, notwithstanding that HCA
may request review of the ALJ decision by the DAB.

XI.    EFFECTIVE AND BINDING AGREEMENT

       Consistent with the provisions in the Settlement Agreement pursuant to
which this CIA is entered, and into which this CIA is incorporated, HCA and OIG
agree as follows:

       A. This CIA shall be binding on the successors, assigns, and transferees
of HCA, consistent with the terms of Section IV;

       B. This CIA shall become final and binding on the date that the court(s)
accept the plea(s) and impose a sentence in the criminal proceedings related to
the plea agreement entered into between HCA and the United States on or about
the date of the signing of this CIA;

       C. Any modifications to this CIA shall be made with the prior written
consent of the parties to this CIA; and



                                       45
   46

       D. The undersigned HCA signatories represent and warrant that they are
authorized to execute this CIA. The undersigned OIG signatory represents that he
is signing this CIA in his official capacity and that he is authorized to
execute this CIA.

















                                       46
   47

                                ON BEHALF OF HCA



/s/ Thomas F. Frist, Jr.                                    12/12/00
- -------------------------------------                  -------------------
Thomas F. Frist, Jr., M.D                                      DATE
Chairman and Chief Executive Officer
HCA-The Healthcare Company



/s/ Alan Yuspeh                                             12/12/00
- -------------------------------------                  -------------------
Alan Yuspeh                                                    DATE
Senior Vice President
Ethics, Compliance, and Corporate Responsibility
HCA-The Healthcare Company




                  ON BEHALF OF THE OFFICE OF INSPECTOR GENERAL
                 OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES




/s/ Lewis Morris                                            12/14/00
- -------------------------------------                  -------------------
Lewis Morris                                                   DATE
Assistant Inspector General for Legal Affairs
Office of Inspector General
U.S. Department of Health and Human Services












                                            47