10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                to                               

Commission file number 1-11239

HCA Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	75-2497104 (I.R.S. Employer Identification No.)
One Park Plaza Nashville, Tennessee (Address of principal executive offices)	37203 (Zip Code)

(615) 344-9551

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x     NO o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES x     NO o

      Indicate the number of shares outstanding of each of the issuer’s classes of common stock of the latest practicable date.

Class of Common Stock	Outstanding at July 15, 2003
Voting common stock, $.01 par value	478,523,800 shares
Nonvoting common stock, $.01 par value	21,000,000 shares

TABLE OF CONTENTS

	CONDENSED CONSOLIDATED INCOME STATEMENTS
	HCA INC. CONDENSED CONSOLIDATED BALANCE SHEETS
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
HCA INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK
	ITEM 4. CONTROLS AND PROCEDURES
Part II: Other Information
	Item 1: Legal Proceedings
	Item 4: Submission of Matters to a Vote of Security Holders
	Item 6: Exhibits and Reports on Form 8-K
SIGNATURES
EX-10.1 ADMINISTRATIVE SETTLEMENT AGREEMENT
EX-10.2 CIVIL SETTLEMENT AGREEMENT
EX-12 COMPUTATION OF RATIO OF EARNINGS TO CHARGES
EX-31.1 302 CERTIFICATION OF THE CEO
EX-31.2 302 CERT. OF PRINCIPAL FINANCIAL OFFICER
EX-32.1 906 CERTIFICATION

HCA INC.

FORM 10-Q

June 30, 2003

		Page of
		Form 10-Q
Part I.	Financial Information
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Income Statements — for the quarters and six months ended June 30, 2003 and 2002		3
	Condensed Consolidated Balance Sheets — June 30, 2003 and December 31, 2002		4
	Condensed Consolidated Statements of Cash Flows — for the six months ended June 30, 2003 and 2002		5
	Notes to Condensed Consolidated Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.	Quantitative and Qualitative Disclosure of Market Risk		34
Item 4.	Controls and Procedures		34
Part II.	Other Information
Item 1.	Legal Proceedings		35
Item 4.	Submission of Matters to a Vote of Security Holders		41
Item 6.	Exhibits and Reports on Form 8-K		41
Signatures			43

2

HCA INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

For the quarters and six months ended June 30, 2003 and 2002

Unaudited

(Dollars in millions, except per share amounts)

			Quarter						Six Months
			2003			2002			2003			2002
Revenues			$	5,467		$	4,903		$	10,740		$	9,776
Salaries and benefits				2,178			1,960			4,274			3,890
Supplies				870			778			1,715			1,556
Other operating expenses				926			832			1,779			1,632
Provision for doubtful accounts				577			371			1,005			739
Insurance subsidiary (gains) losses on sales of investments				1			(1	)		1			4
Equity in earnings of affiliates				(53	)		(55	)		(111	)		(106	)
Depreciation and amortization				278			255			539			499
Interest expense				123			108			237			229
Gains on sales of facilities				(1	)		—			(75	)		—
Impairment of long-lived assets				130			19			130			19
Investigation related costs				1			13			5			30
				5,030			4,280			9,499			8,492
Income before minority interests and income taxes				437			623			1,241			1,284
Minority interests in earnings of consolidated entities				47			42			86			77
Income before income taxes				390			581			1,155			1,207
Provision for income taxes				150			231			446			472
		Net income	$	240		$	350		$	709		$	735
Per share data:
	Basic earnings per share		$	0.47		$	0.68		$	1.39		$	1.44
	Diluted earnings per share		$	0.47		$	0.66		$	1.37		$	1.40
	Cash dividends per share		$	0.02		$	0.02		$	0.04		$	0.04
Shares used in earnings per share calculations (in thousands):
	Basic			506,727			513,185			508,995			510,811
	Diluted			514,412			528,068			518,374			524,841

See accompanying notes.

3

HCA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(Dollars in millions)

		June 30,			December 31,
		2003			2002
ASSETS
Current assets:
	Cash and cash equivalents	$	184		$	161
	Accounts receivable, less allowance for doubtful accounts of $2,378 and $2,045		2,873			2,788
	Inventories		493			462
	Deferred income taxes		640			568
	Other		606			526
			4,796			4,505
Property and equipment, at cost			17,893			16,800
Accumulated depreciation			(7,399	)		(7,079	)
			10,494			9,721
Investments of insurance subsidiary			1,549			1,355
Investments in and advances to affiliates			661			679
Goodwill			2,501			1,994
Deferred loan costs			67			67
Other			402			420
		$	20,470		$	18,741
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable	$	765		$	809
	Accrued salaries		461			438
	Other accrued expenses		1,134			1,113
	Government settlement accrual		683			933
	Long-term debt due within one year		808			446
			3,851			3,739
Long-term debt			7,568			6,497
Professional liability risks			1,271			1,193
Deferred income taxes and other liabilities			1,128			999
Minority interests in equity of consolidated entities			672			611
Stockholders’ equity:
	Common stock $.01 par; authorized 1,650,000,000 shares; outstanding 501,053,300 shares in 2003 and 514,176,000 shares in 2002		5			5
	Capital in excess of par value		—			93
	Other		6			6
	Accumulated other comprehensive income		112			73
	Retained earnings		5,857			5,525
			5,980			5,702
		$	20,470		$	18,741

See accompanying notes.

4

HCA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30, 2003 and 2002

Unaudited

(Dollars in millions)

				2003			2002
Cash flows from operating activities:
	Net income			$	709		$	735
	Adjustments to reconcile net income to net cash provided by operating activities:
		Provision for doubtful accounts			1,005			739
		Depreciation and amortization			539			499
		Income taxes			(17	)		117
		Settlement with Federal Government			(250	)		—
		Gains on sales of facilities			(75	)		—
		Impairment of long-lived assets			130			19
		Changes in operating assets and liabilities			(1,052	)		(937	)
		Other			86			52
			Net cash provided by operating activities		1,075			1,224
Cash flows from investing activities:
		Purchase of property and equipment			(920	)		(829	)
		Acquisition of hospitals and health care entities			(884	)		(83	)
		Disposition of hospitals and health care entities			121			39
		Change in investments			(110	)		(4	)
		Other			(4	)		(5	)
			Net cash used in investing activities		(1,797	)		(882	)
Cash flows from financing activities:
		Issuance of long-term debt			509			505
		Net change in revolving bank credit facility			805			(595	)
		Repayment of long-term debt			(52	)		(70	)
		Payment of cash dividends			(20	)		(20	)
		Repurchases of common stock			(542	)		(400	)
		Issuances of common stock			51			208
		Other			(6	)		(4	)
			Net cash provided by (used in) financing activities		745			(376	)
Change in cash and cash equivalents					23			(34	)
Cash and cash equivalents at beginning of period					161			85
Cash and cash equivalents at end of period				$	184		$	51
Interest payments				$	211		$	218
Income tax payments				$	463		$	355

See accompanying notes.

5

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

NOTE 1 —  INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     Basis of presentation

      HCA Inc. is a holding company whose affiliates own and operate hospitals and related health care entities. The term “affiliates” includes direct and indirect subsidiaries of HCA Inc. and partnerships and joint ventures in which such subsidiaries are partners. At June 30, 2003, these affiliates owned and operated 184 hospitals, 76 freestanding surgery centers and provided extensive outpatient and ancillary services. Affiliates of HCA Inc. are also partners in 50/50 joint ventures that own and operate six hospitals and four freestanding surgery centers which are accounted for using the equity method. The Company’s facilities are located in 23 states, England and Switzerland. The terms “HCA” or the “Company,” as used in this Quarterly Report on Form 10-Q refer to HCA Inc. and its affiliates unless otherwise stated or indicated by context.

      The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The majority of the Company’s expenses are “cost of revenue” items. Operating results for the quarter and six months ended June 30, 2003, are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

      Certain prior year amounts have been reclassified to conform to the current year presentation.

     Stock-based Compensation

      HCA applies Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” and related interpretations in accounting for its employee stock benefit plans. Accordingly, no compensation cost has been recognized for HCA’s stock options granted under the plans because the exercise prices for options granted were equal to the quoted market prices on the option grant dates and all option grants were to employees or directors.

      HCA determined the pro forma net income and earnings per share as if compensation cost for HCA’s employee stock option and stock purchase plans had been determined based upon fair values at the grant dates. These pro forma amounts for the respective quarters and six months ended June 30, 2003 and 2002 are as follows (dollars in millions, except per share amounts):

		Quarter				Six Months
		2003		2002		2003		2002
Net income:
	As reported	$	240	$	350	$	709	$	735
	Stock-based employee compensation expense determined under a fair value method, net of income taxes		27		19		53		32
	Pro forma	$	213	$	331	$	656	$	703
Basic earnings per share:
	As reported	$	0.47	$	0.68	$	1.39	$	1.44
	Pro forma	$	0.42	$	0.64	$	1.29	$	1.38
Diluted earnings per share:
	As reported	$	0.47	$	0.66	$	1.37	$	1.40
	Pro forma	$	0.41	$	0.63	$	1.26	$	1.34

6

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited

NOTE 1 —  INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

     Stock-based Compensation (continued)

      The weighted average fair values of HCA’s stock options granted for the quarters ended June 30, 2003 and 2002 were $11.24 and $15.32 per share, respectively. For the six months ended June 30, 2003 and 2002 the weighted average fair values were $13.52 and $13.30 per share, respectively. The fair values were estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

	Quarter						Six Months
	2003			2002			2003			2002
Risk-free interest rate		2.33	%		2.50	%		2.61	%		2.16	%
Expected volatility		38	%		37	%		37	%		37	%
Expected life, in years		4			4			4			4
Expected dividend yield		0.20	%		0.18	%		0.19	%		0.18	%

      The expected volatility is derived using weekly data drawn from the seven years preceding the date of grant. The risk-free interest rate is the approximate yield on four-year United States Treasury Strips on the date of grant. The expected life is an estimate of the number of years the option will be held before it is exercised. The valuation model was not adjusted for nontransferability, risk of forfeiture or the vesting restrictions of the options, all of which would reduce the value if factored into the calculation.

     Allowance for Doubtful Accounts

      The amount of the provision for doubtful accounts is based upon management’s assessment of historical and expected net collections, business and economic conditions, trends in Federal and state governmental health care coverage and other collection indicators. Management relies on detailed reviews of historical collections and write-offs at facilities that represent a majority of HCA’s revenues and accounts receivable (the “hindsight analysis”). The Company has previously performed the hindsight analysis on an annual basis. The results of the hindsight analysis that was completed during the second quarter of 2003 indicated an increasing proportion of accounts receivable being comprised of uninsured accounts and the collectability of this category of accounts had deteriorated. In response to the hindsight results and the noted trends, the Company increased the estimated allowance for doubtful accounts by $106 million during the quarter ended June 30, 2003. The Company has decided to increase the frequency of the hindsight analysis and perform a quarterly, rolling twelve-month hindsight analysis in future periods to enable the Company to react more quickly to trends affecting the collectability of the accounts receivable. Adverse changes in general economic conditions, business office operations, payer mix, or trends in Federal or state governmental health care coverage could affect HCA’s collection of accounts receivable, cash flows and results of operations.

     Recent Pronouncements

      In January 2003, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51” (“FIN 46”). FIN 46 requires the consolidation of entities in which an enterprise absorbs a majority of the entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. FIN 46 also requires disclosures about variable interest entities that a company is not required to consolidate, but in which it has a significant variable interest. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003 and to existing entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply to all financial statements issued after January 31, 2003,

7

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited

NOTE 1 —  INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

     Recent Pronouncements (continued)

regardless of when the variable interest entity was established. The Company does not expect this statement to have a material impact on its results of operations or financial position.

      In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (“SFAS 149”). SFAS 149 is intended to result in more consistent reporting of contracts as either freestanding derivative instruments subject to Statement No. 133 in its entirety, or as hybrid instruments with debt host contracts and embedded derivative features. In the case of derivatives that contain a financing element, SFAS 149 requires the derivative counterparty who is considered the “borrower” in the derivative to report all of the derivative’s cash inflows and outflows as “financing activities” in the statement of cash flows. SFAS 149 is effective for contracts entered into or modified after June 30, 2003, and hedging relationships designated after June 30, 2003. HCA does not expect this statement to have a material impact on its results of operation or financial position.

      In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“SFAS 150”). This statement generally requires liability classification for two broad classes of financial instruments. Under SFAS 150, instruments that represent, or are indexed to, an obligation to buy back the issuer’s shares, regardless whether the instrument is settled on a net-cash or gross physical basis are required to be classified as liabilities. Obligations that can be settled in shares, but either derive their value predominately from some other underlying, have a fixed value, or have a value to the counterparty that moves in the opposite direction as the issuer’s shares, are also required to be classified as liabilities under this statement. SFAS 150 must be applied immediately to instruments entered into or modified after May 31, 2003 and to all other instruments that exist as of the beginning of the first interim financial reporting period beginning after June 15, 2003. HCA does not expect this statement to have a material impact on its results of operation or financial position.

NOTE 2 — INVESTIGATIONS AND SETTLEMENT OF CERTAIN GOVERNMENT CLAIMS

      Commencing in 1997, HCA was the subject of governmental investigations and litigation relating to its business practices. The governmental investigations included activities for certain entities for periods prior to their acquisition by the Company and activities for certain entities that have been divested. As part of the investigation, the United States intervened in a number of qui tam actions brought by private parties.

      The investigation was concluded through a series of agreements executed in 2000 and 2003. In December 2000, HCA entered into a Plea Agreement with the Criminal Division of the Department of Justice (the “DOJ”) and various U.S. Attorneys’ offices (the “Plea Agreement”) and a Civil and Administrative Settlement Agreement with the Civil Division of the DOJ (the “Civil Agreement”). The agreements resolved all Federal criminal issues outstanding against HCA and certain issues involving Federal civil claims by, or on behalf of, the government against HCA relating to DRG coding, outpatient laboratory billing and home health issues. The civil issues that were not covered by the Civil Agreement included claims related to physician relations, cost reports and wound care issues. The Civil Agreement was approved by the Federal District Court of the District of Columbia in August 2001. HCA paid the government $840 million (plus $60 million of accrued interest), as provided by the Civil Agreement and Plea Agreement, during 2001. HCA also entered into a Corporate Integrity Agreement (“CIA”) with the Office of Inspector General of the Department of Health and Human Services.

      The remaining aspects of the investigation were resolved during 2003. In June 2003, HCA announced that the Company and the Civil Division of the DOJ had signed agreements whereby the United States would dismiss the various claims it had brought related to physician relations, cost reports and wound care issues

8

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited

NOTE 2 —  INVESTIGATIONS AND SETTLEMENT OF CERTAIN GOVERNMENT CLAIMS (continued)

(the “DOJ Agreement”). The DOJ Agreement received court approval in July 2003, and HCA paid the DOJ $641 million (including accrued interest of $10 million) during July 2003. The DOJ Agreement does not affect qui tam cases in which the government has not intervened. In addition, the CIA previously entered into by the Company remains in effect. The Company also finalized an agreement with a negotiating team representing states that may have claims against the Company. Under this agreement HCA paid $17.7 million in July 2003 to state Medicaid agencies to resolve these claims. The Company also paid $33 million for reasonable legal fees of the private parties. In connection with the DOJ Agreement, HCA recorded a pretax charge of $603 million ($418 million after-tax) in the fourth quarter of 2002.

      Upon the Company making the payment provided under the DOJ Agreement, the Company no longer has any remaining obligation to maintain letters of credit with the DOJ.

      During June 2003, HCA announced that the Company and the Centers for Medicare and Medicaid Services (“CMS”) had signed an agreement, documenting the understanding announced in March 2002, to resolve all Medicare cost report, home office cost statement and appeal issues between HCA and CMS (the “CMS Agreement”) for cost report periods ended before August 1, 2001. As a result of the CMS Agreement, HCA paid CMS $250 million in June 2003. HCA recorded a pretax charge of $260 million ($165 million after-tax) consisting of the accrual of $250 million for the settlement payment and the write-off of $10 million of net Medicare cost report receivables. This charge was recorded in the consolidated income statement for the year ended December 31, 2001.

      HCA remains the subject of a December 1997 formal order of investigation by the Securities and Exchange Commission (the “SEC”). HCA understands that the investigation includes the anti-fraud, insider trading, periodic reporting and internal accounting control provisions of the Federal securities laws. The CIA previously entered into by the Company remains in effect.

      If HCA was found to be in violation of Federal or state laws relating to Medicare, Medicaid or similar programs or breach of the CIA, HCA could be subject to substantial monetary fines, civil and criminal penalties and/or exclusion from participation in the Medicare and Medicaid programs. Any such sanctions or expenses could have a material adverse effect on HCA’s financial position, results of operations and liquidity. See Note 10 — Contingencies and Part II, Item 1: Legal Proceedings.

      During the respective quarters and six months ended June 30, 2003 and 2002, HCA recorded $1 million and $13 million, and $5 million and $30 million, respectively, of professional fees in connection with the governmental investigations. The professional fees related to investigations represent incremental legal and accounting expenses that are being recognized on the basis of when the costs are incurred.

NOTE 3 — ACQUISITIONS AND DISPOSITIONS

      During the first six months of 2003, HCA recognized a net pretax gain of $75 million ($43 million after-tax) on the sales of two leased hospitals and one consolidating hospital and a working capital settlement for a sale completed in 2002. Proceeds from the sales were used to repay bank borrowings.

9

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited

NOTE 3 — ACQUISITIONS AND DISPOSITIONS (continued)

      The following is a summary of acquisitions consummated during the six months ended June 30, 2003 and 2002 (dollars in millions):

				2003			2002
Number of hospitals					11			1
Number of licensed beds					2,292			164
Purchase price information:
	Hospitals:
		Fair value of assets acquired		$	1,185		$	28
		Liabilities assumed			(319	)		—
			Net assets acquired		866			28
	Other health care entities acquired				18			55
			Net cash paid	$	884		$	83

      The purchase price paid in excess of the fair value of identifiable net assets of acquired entities aggregated $518 million in 2003 and $21 million in 2002. The pro forma effect of these acquisitions on the Company’s results of operations for the periods prior to the respective acquisition dates was not significant.

      During April 2003, HCA completed the acquisition of the Health Midwest hospital system in Kansas City, and the results of operations of the Health Midwest facilities were consolidated with those of HCA beginning April 1, 2003. Pursuant to the transaction, HCA will spend or commit to spend $450 million in capital expenditures over the next five years.

NOTE 4 — IMPAIRMENT OF LONG-LIVED ASSETS

      During the second quarter of 2003, HCA announced plans to discontinue activities associated with the internal development of a new patient accounts receivable management system resulting in a non-cash, pretax charge of $130 million ($79 million after-tax). The impairment charge affected the “property and equipment” asset category by $105 million and the “other accrued expenses” category by $25 million and the “corporate and other” operating segment.

      During the second quarter of 2002, HCA management decided to delay the development and implementation of certain financial and procurement information system components of its enterprise resource planning program to concentrate and direct efforts to the patient accounting and human resources information system components, resulting in a non-cash, pretax charge of $19 million. HCA reduced the carrying value for certain capitalized costs associated with the information system components that have been delayed. This decision to delay these activities should not have a significant impact on HCA’s operations or cash flows for future periods. The impairment charge affected the “property and equipment” asset category, and the “corporate and other” operating segment.

NOTE 5 — INCOME TAXES

      HCA is currently contesting before the Appeals Division of the IRS, the United States Tax Court (the “Tax Court”) the United States Court of Federal Claims and the United States Court of Appeals for the Sixth Circuit, certain claimed deficiencies and adjustments proposed by the IRS in conjunction with its examinations of HCA’s 1994-1998 Federal income tax returns, Columbia Healthcare Corporation’s (“CHC”) 1993 and 1994 Federal income tax returns, HCA-Hospital Corporation of America, Inc.’s (“Hospital Corporation of America”) 1987 through 1988 and 1991 through 1993 Federal income tax returns and

10

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited

NOTE 5 — INCOME TAXES (continued)

Healthtrust, Inc. — The Hospital Company’s (“Healthtrust”) 1990 through 1994 Federal income tax returns. The disputed items include the amount of gain or loss recognized on the divestiture of certain non-core business units in 1998 and the allocation of costs among fixed assets and goodwill in connection with certain hospitals acquired by HCA in 1996. The IRS is claiming an additional $331 million in income taxes and interest through June 30, 2003.

      During 2002, the IRS began an examination of HCA’s 1999 through 2000 Federal income tax returns. HCA is presently unable to estimate the amount of any additional income tax and interest that the IRS may claim upon completion of this examination.

      Management believes that adequate provisions have been recorded to satisfy final resolution of the disputed issues. Management believes that HCA, CHC, Hospital Corporation of America and Healthtrust properly reported taxable income and paid taxes in accordance with applicable laws and agreements established with the IRS during previous examinations and that final resolution of these disputes will not have a material adverse effect on the results of operations or financial position.

NOTE 6 — EARNINGS PER SHARE

      Basic earnings per share is computed on the basis of the weighted average number of common shares outstanding. Diluted earnings per share is computed on the basis of the weighted average number of common shares outstanding plus the dilutive effect of outstanding stock options and other stock awards, using the treasury stock method.

      The following table sets forth the computation of basic and diluted earnings per share for the quarters and six months ended June 30, 2003 and 2002 (dollars in millions, except per share amounts and shares in thousands):

		Quarter				Six Months
		2003		2002		2003		2002
Net income		$	240	$	350	$	709	$	735
Weighted average common shares outstanding			506,727		513,185		508,995		510,811
Effect of dilutive securities:
	Stock options		5,857		13,314		7,490		12,539
	Other		1,828		1,569		1,889		1,491
Shares used for diluted earnings per share			514,412		528,068		518,374		524,841
Earnings per share:
	Basic earnings per share	$	0.47	$	0.68	$	1.39	$	1.44
	Diluted earnings per share	$	0.47	$	0.66	$	1.37	$	1.40

11

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited

NOTE 7 — INVESTMENTS OF INSURANCE SUBSIDIARY

      A summary of the insurance subsidiary’s investments at June 30, 2003 follows (dollars in millions):

		June 30, 2003
				Unrealized
				Amounts
		Amortized						Fair
		Cost		Gains		Losses		Value
Debt securities:
	United States government	$	4	$	1	$	—	$	5
	States and municipalities		907		75		1		981
	Mortgage-backed securities		67		2		2		67
	Corporate and other		71		5		—		76
	Money market funds		130		—		—		130
	Redeemable preferred stocks		4		—		—		4
			1,183		83		3		1,263
Equity securities:
	Perpetual preferred stocks		6		—		—		6
	Common stocks		530		56		6		580
			536		56		6		586
		$	1,719	$	139	$	9		1,849
Amounts classified as current assets									(300	)
Investment carrying value								$	1,549

      The fair value of investment securities is generally based on quoted market prices.

      At June 30, 2003, the investments of HCA’s insurance subsidiary were classified as “available for sale.” The aggregate common stock investment is comprised of 378 equity positions at June 30, 2003, with 303 positions reflecting unrealized gains and 75 positions reflecting unrealized losses (none of the individual unrealized loss positions exceed $2 million). None of the equity positions with unrealized losses at June 30, 2003 represent situations where there is a continuous decline from cost for more than six months. The equity positions (including those with unrealized losses) at June 30, 2003, are not concentrated in any particular industries.

NOTE 8 — LONG-TERM DEBT

      HCA’s revolving credit facility (the “Credit Facility”) is a $1.75 billion agreement expiring April 2006. As of June 30, 2003, HCA had $905 million outstanding under the Credit Facility.

      As of June 30, 2003, interest is payable generally at either LIBOR plus 0.7% to 1.5% (depending on HCA’s credit ratings), the prime lending rate or a competitive bid rate. The Credit Facility contains customary covenants which include (i) a limitation on debt levels, (ii) a limitation on sales of assets, mergers and changes of ownership and (iii) maintenance of minimum interest coverage ratios. As of June 30, 2003, HCA was in compliance with all such covenants.

      In February 2003, HCA issued $500 million of 6.25% notes due February 15, 2013. Proceeds from the notes were used for general corporate purposes. Of the $1.5 billion available under HCA’s shelf registration statement filed in May 2002, $1.0 billion has been issued at June 30, 2003.

12

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited

NOTE 9 — STOCK REPURCHASE PROGRAMS

      In July 2002, HCA announced an authorization to repurchase up to 12 million shares of its common stock. During 2002, HCA made open market purchases of 6.2 million shares for $282 million. During the first quarter of 2003, HCA made open market purchases of 3.7 million shares for $148 million. During the second quarter of 2003, HCA made open market purchases of 2.1 million shares for $66 million, which completed the repurchases under this authorization.

      In April 2003, HCA announced an authorization to repurchase up to $1.5 billion of its common stock. During the second quarter of 2003, HCA made open market purchases under this authorization of 10.2 million shares for $328 million.

      In connection with its share repurchase programs, HCA entered into a Letter of Credit Agreement with the DOJ in 1999. As part of the agreement, HCA provided the government with letters of credit totaling $1 billion. As provided under the Civil Agreement with the government, as discussed in Note 2 — Investigations and Settlement of Certain Government Claims, the letters of credit were reduced from $1 billion to $250 million upon payment of the Civil Settlement. Upon the Company making the payments in July 2003 provided under the DOJ Agreement, the Company no longer has any remaining obligation to maintain letters of credit with the DOJ.

NOTE 10 — CONTINGENCIES

Significant Legal Proceedings

      Various lawsuits, claims and legal proceedings (see Note 2 — Investigations and Settlement of Certain Government Claims and Part II, Item 1: Legal Proceedings, for descriptions of the ongoing government investigations and other legal proceedings) have been and are expected to be instituted or asserted against HCA. While the amounts claimed may be substantial, the ultimate liability cannot be determined or reasonably estimated at this time due to the considerable uncertainties that exist. Therefore, it is possible that results of operations, financial position and liquidity in a particular period could be materially, adversely affected upon the resolution of certain of these contingencies.

General Liability Claims

      HCA is subject to claims and suits arising in the ordinary course of business, including claims for personal injuries or wrongful restriction of, or interference with, physicians’ staff privileges. In certain of these actions the claimants may seek punitive damages against HCA, which may not be covered by insurance. It is management’s opinion that the ultimate resolution of these pending claims and legal proceedings will not have a material adverse effect on HCA’s results of operations or financial position.

NOTE 11 — COMPREHENSIVE INCOME

      The components of comprehensive income, net of related taxes, for the quarters and six months ended June 30, 2003 and 2002 are as follows (in millions):

	Quarter					Six Months
	2003		2002			2003			2002
Net income	$	240	$	350		$	709		$	735
Unrealized gains (losses) on available-for-sale securities		60		(48	)		42			(40	)
Currency translation adjustments		8		21			(3	)		18
Comprehensive income	$	308	$	323		$	748		$	713

13

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited

NOTE 11 — COMPREHENSIVE INCOME (continued)

      The components of accumulated other comprehensive income, net of related taxes are as follows (in millions):

	June 30,			December 31,
	2003			2002
Net unrealized gains on securities	$	88		$	46
Foreign currency translation adjustments		32			35
Defined benefit plans		(8	)		(8	)
Accumulated other comprehensive income	$	112		$	73

NOTE 12 — SEGMENT AND GEOGRAPHIC INFORMATION

      HCA operates in one line of business, which is operating hospitals and related health care entities. During the quarters ended June 30, 2003 and 2002, approximately 27% and 28%, respectively, and during both the six months ended June 30, 2003 and 2002, approximately 28% of the Company’s revenues related to patients participating in the Medicare program.

      HCA’s operations are structured into two geographically organized groups: the Eastern Group includes 91 consolidating hospitals located in the Eastern United States and the Western Group includes 85 consolidating hospitals and six non-consolidating hospitals included in 50/50 joint ventures located in the Western United States. These two groups represent HCA’s core operations and are typically located in urban areas that are characterized by highly integrated facility networks. HCA also operates eight consolidating hospitals in England and Switzerland and these facilities are included in the Corporate and other group.

      Adjusted segment EBITDA is defined as income before depreciation and amortization, interest expense, gains on sales of facilities, impairment of long-lived assets, investigation related costs, minority interests and income taxes. HCA uses adjusted segment EBITDA as an analytical indicator for purposes of allocating resources to geographic areas and assessing their performance. Adjusted segment EBITDA is commonly used as an analytical indicator within the health care industry, and also serves as a measure of leverage capacity and debt service ability. Adjusted segment EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from adjusted segment EBITDA are significant components in understanding and assessing financial performance. Because adjusted segment EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, adjusted segment EBITDA as presented may not be comparable to other similarly titled measures of other companies. The geographic distributions of HCA’s revenues, equity in earnings of affiliates, adjusted segment EBITDA and depreciation and amortization, as well as a reconciliation of adjusted segment EBITDA to income before minority interests and income taxes

14

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited

NOTE 12 —  SEGMENT AND GEOGRAPHIC INFORMATION (continued)

for the quarters and six months ended June 30, 2003 and 2002, are summarized in the following table (dollars in millions):

		Quarters						Six Months
		2003			2002			2003			2002
Revenues:
	Eastern Group	$	2,604		$	2,440		$	5,275		$	4,926
	Western Group		2,722			2,331			5,183			4,589
	Corporate and other		141			132			282			261
		$	5,467		$	4,903		$	10,740		$	9,776
Equity in earnings of affiliates:
	Eastern Group	$	(3	)	$	(2	)	$	(5	)	$	(5	)
	Western Group		(48	)		(50	)		(102	)		(99	)
	Corporate and other		(2	)		(3	)		(4	)		(2	)
		$	(53	)	$	(55	)	$	(111	)	$	(106	)
Adjusted segment EBITDA:
	Eastern Group	$	498		$	541		$	1,107		$	1,121
	Western Group		502			537			1,053			1,060
	Corporate and other		(32	)		(60	)		(83	)		(120	)
		$	968		$	1,018		$	2,077		$	2,061
Depreciation and amortization:
	Eastern Group	$	120		$	109		$	232		$	216
	Western Group		125			110			238			216
	Corporate and other		33			36			69			67
		$	278		$	255		$	539		$	499
Adjusted segment EBITDA		$	968		$	1,018		$	2,077		$	2,061
	Depreciation and amortization		278			255			539			499
	Interest expense		123			108			237			229
	Gains on sales of facilities		(1	)		—			(75	)		—
	Impairment of long-lived assets		130			19			130			19
	Investigation related costs		1			13			5			30
Income before minority interests and income taxes		$	437		$	623		$	1,241		$	1,284

15

HCA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited

NOTE 12 —  SEGMENT AND GEOGRAPHIC INFORMATION (continued)

		As of June 30,		As of December 31,
		2003		2002
Assets:
	Eastern Group	$	7,243	$	7,046
	Western Group		8,287		6,866
	Corporate and other		4,940		4,829
		$	20,470	$	18,741

							Corporate
		Eastern			Western		and
		Group			Group		Other			Total
Goodwill:
	Balance at December 31, 2002	$	918		$	841	$	235		$	1,994
	Acquisitions		5			513		—			518
	Sales of facilities		(3	)		—		(10	)		(13	)
	Foreign currency translation		—			—		2			2
Balance at June 30, 2003.		$	920		$	1,354	$	227		$	2,501

16

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

      This Quarterly Report on Form 10-Q contains disclosures which contain “forward-looking statements.” Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words like “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “initiative” or “continue.” These forward-looking statements are based on the current plans and expectations of HCA and are subject to a number of known and unknown uncertainties and risks, many of which are beyond HCA’s control, that could significantly affect current plans and expectations and HCA’s future financial position and results of operations. These factors include, but are not limited to, (i) the highly competitive nature of the health care business, (ii) the efforts of insurers, health care providers and others to contain health care costs, (iii) possible changes in the Medicare and Medicaid programs (including changes to Medicare outlier payments) that may impact reimbursements to health care providers and insurers, (iv) the ability to achieve expected levels of patient volumes and control the costs of providing services, (v) changes in Federal, state or local regulations affecting the health care industry, (vi) the possible enactment of Federal or state health care reform, (vii) the ability to attract and retain qualified management and personnel, including affiliated physicians, nurses and medical support personnel, (viii) liabilities and other claims asserted against HCA, (ix) fluctuations in the market value of HCA’s common stock, (x) changes in accounting practices, (xi) changes in general economic conditions including growing numbers of uninsured and unemployed patients, (xii) future divestitures which may result in additional charges, (xiii) changes in revenue mix and the ability to enter into and renew managed care provider arrangements on acceptable terms, (xiv) the availability and terms of capital to fund the expansion of the Company’s business, (xv) changes in business strategy or development plans, (xvi) delays in receiving payments, (xvii) the ability to develop and implement the financial enterprise resource planning (“ERP”) information system within the expected time and cost projections and, upon implementation, to realize the expected benefits and efficiencies, (xviii) the outcome of pending and any future tax audits, appeals, and litigation associated with HCA’s tax positions, (xix) the outcome of HCA’s continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures and HCA’s corporate integrity agreement with the government, (xx) the ability to complete and the impact of the share repurchase program, (xxi) the ability to successfully integrate the operations of Health Midwest and fund expected capital improvements, (xxii) the collectibility of uninsured accounts and deductible and co-pay amounts, (xxiii) the impact of the charity care and self-pay discounting policy changes, and (xxiv) other risk factors detailed in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission (“SEC”). As a consequence, current plans, anticipated actions and future financial position and results of operations may differ from those expressed in any forward-looking statements made by or on behalf of HCA. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this report, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Investigations and Settlement of Certain Government Claims

      Commencing in 1997, HCA was the subject of governmental investigations and litigation relating to its business practices. The governmental investigations included activities for certain entities for periods prior to their acquisition by the Company and activities for certain entities that have been divested. As part of the investigation, the United States intervened in a number of qui tam actions brought by private parties.

      The investigation was concluded through a series of agreements executed in 2000 and 2003. In December 2000, HCA entered into a Plea Agreement with the Criminal Division of the Department of Justice (the “DOJ”) and various U.S. Attorneys’ offices (the “Plea Agreement”) and a Civil and Administrative Settlement Agreement with the Civil Division of the DOJ (the “Civil Agreement”). The agreements resolved all Federal criminal issues outstanding against HCA and certain issues involving Federal civil claims by, or on behalf of, the government against HCA relating to DRG coding, outpatient laboratory billing and home health issues. The civil issues that were not covered by the Civil Agreement included claims related to physician

17

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Investigations and Settlement of Certain Government Claims (continued)

relations, cost reports and wound care issues. The Civil Agreement was approved by the Federal District Court of the District of Columbia in August 2001. HCA paid the government $840 million (plus $60 million of accrued interest), as provided by the Civil Agreement and Plea Agreement, during 2001. HCA also entered into a Corporate Integrity Agreement (“CIA”) with the Office of Inspector General of the Department of Health and Human Services.

      The remaining aspects of the investigation were resolved during 2003. In June 2003, HCA announced that the Company and the Civil Division of the DOJ had signed agreements whereby the United States would dismiss the various claims it had brought related to physician relations, cost reports and wound care issues (the “DOJ Agreement”). The DOJ Agreement received court approval in July 2003, and HCA paid the DOJ $641 million (including accrued interest of $10 million) during July 2003. The DOJ Agreement does not affect qui tam cases in which the government has not intervened. In addition, the CIA previously entered into by the Company remains in effect. The Company also finalized an agreement with a negotiating team representing states that may have claims against the Company. Under this agreement HCA paid $17.7 million in July 2003 to state Medicaid agencies to resolve these claims. The Company also paid $33 million for reasonable legal fees of the private parties. In connection with the DOJ Agreement, HCA recorded a pretax charge of $603 million ($418 million after-tax) in the fourth quarter of 2002.

      Upon the company making the payment provided under the DOJ Agreement, the Company no longer has any remaining obligation to maintain letters of credit with the DOJ.

      During June 2003, HCA announced that the Company and the Centers for Medicare and Medicaid Services (“CMS”) had signed an agreement, documenting the understanding announced in March 2002, to resolve all Medicare cost report, home office cost statement and appeal issues between HCA and CMS (the “CMS Agreement”) for cost report periods ended before August 1, 2001. As a result of the CMS Agreement, HCA paid CMS $250 million in June 2003. HCA recorded a pretax charge of $260 million ($165 million after-tax), consisting of the accrual of $250 million for the settlement payment and the write-off of $10 million of net Medicare cost report receivables. This charge was recorded in the consolidated income statement for the year ended December 31, 2001.

      HCA remains the subject of a December 1997 formal order of investigation by the Securities and Exchange Commission (the “SEC”). HCA understands that the investigation includes the anti-fraud, insider trading, periodic reporting and internal accounting control provisions of the Federal securities laws. The CIA previously entered into by the Company remains in effect.

      If HCA was found to be in violation of Federal or state laws relating to Medicare, Medicaid or similar programs or breach of the CIA, HCA could be subject to substantial monetary fines, civil and criminal penalties and/or exclusion from participation in the Medicare and Medicaid programs. Any such sanctions or expenses could have a material adverse effect on HCA’s financial position, results of operation and liquidity. See Note 10 — Contingencies and Part II, Item 1: Legal Proceedings.

Business Strategy

      HCA’s primary objective is to provide the communities it serves a comprehensive array of quality health care services in the most cost-effective manner and consistent with HCA’s ethics and compliance program, governmental regulations and guidelines and industry standards. HCA also seeks to enhance financial performance by increasing utilization of its facilities and improving operating efficiencies. To achieve these objectives, HCA pursues the following strategies:

•  Emphasize a “patients first” philosophy: The foundation of HCA is putting patients first and providing quality health care services in the communities HCA serves. HCA continuously updates and implements quality assurance procedures to monitor level of care and patient safety issues. HCA has

18

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Business Strategy (continued)

	instituted a number of patient safety initiatives, including bar coding, computerized physician order entry and quality audits, and identifies best practices in its many health care facilities and shares those practices throughout its network of hospitals and health care facilities to help achieve better outcomes for patients.
•	Commitment to Ethics and Compliance: HCA is committed to a values-based corporate culture that prioritizes the care and improvement of human life. The values highlighted by HCA’s corporate culture — compassion, honesty, integrity, fairness, loyalty, respect and kindness — are the cornerstone of HCA. To reinforce HCA’s dedication to these values and to ensure integrity in all that it does, HCA has developed and implemented a comprehensive ethics and compliance program that articulates a high set of values and behavioral standards. HCA believes that this program reinforces the dedication to providing excellent patient care.
•	Focus on strong assets and invest capital in select, core communities: HCA focuses on communities where it is, or can be, the number one or number two health care provider and which are typically located in urban areas characterized by highly integrated health care facility networks. HCA intends to continue to optimize core assets through capital expenditures and selected acquisitions and divestitures.
•	Develop comprehensive local health care networks with a broad range of health care services: HCA seeks to operate each of its facilities as part of a network with other health care facilities that HCA’s affiliates own or operate within a common region. This should enable these local health care networks to effectively contract with managed care and other payers, and attract and serve patients and physicians.
•	Grow through increased patient volume, expansion of specialty services and emergency rooms and selective acquisitions: HCA plans capital spending to increase bed capacity, provide new or expanded services, and provide renovated and expanded emergency rooms, operating rooms, women’s services, imaging, oncology, open-heart areas and intensive and critical care units.
•	Improve operating efficiencies through enhanced cost management and resource utilization, and the implementation of shared services and other initiatives: HCA has initiated several measures designed to improve the financial performance of its facilities. To address labor costs, HCA implemented a best practices initiative that provides HCA’s hospitals with strategies to improve recruiting, compensation programs and productivity; implemented various leadership and career development programs; and created an internal contract labor agency that provides for improved quality at a reduced cost. To curtail supply costs, HCA formed a group purchasing organization that allows the achievement of better pricing in negotiating purchasing and supply contracts. In addition, as HCA grows in select core markets, the benefits should continue to be realized from economies of scale, including supply chain efficiencies and volume discount cost savings. HCA expects to be able to reduce operating costs and be better positioned to work with health maintenance organizations, preferred provider organizations and employers, by sharing certain services among several facilities in the same market through the consolidation of hospitals’ back office functions such as billings and collections and standardizing and upgrading financial and human resources systems (ERP).
•	Recruit, develop and maintain relationships with physicians: HCA actively recruits physicians to enhance patient care and fulfill the needs of the communities it serves. HCA believes that recruiting and retaining quality physicians is essential to being a premier provider of health care services.
•	Streamline and decentralize management, consistent with HCA’s local focus: HCA’s strategy to streamline and decentralize management structure affords management of HCA’s facilities greater flexibility to make decisions that are specific to the respective local communities. This operating structure creates a more nimble, responsive organization.

19

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Business Strategy (continued)

•  Effectively allocate capital to maximize return on investments: HCA maintains and replaces equipment, renovates and constructs replacement facilities and adds new services to increase the attractiveness of its hospitals and other facilities to patients and physicians. In addition, HCA evaluates acquisitions that complement its strategies and assesses opportunities to enhance stockholder value, including repayment of indebtedness and stock repurchases.

Update of Critical Accounting Policies and Estimates

     Provision of Doubtful Accounts

      The collection of outstanding receivables from Medicare, managed care payers, other third-party payers and patients is HCA’s primary source of cash and is critical to the Company’s operating performance. The primary collection risks relate to the uninsured patient accounts and patient accounts for which the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient responsibility amounts (deductibles and co-payments) remain outstanding. Because HCA does not pursue collection of amounts related to patients that meet the Company’s guidelines to qualify as charity care, they are not reported in revenues and do not have an impact on the provision for doubtful accounts. The revenues associated with uninsured patients that do not meet the Company’s current guidelines to qualify as charity care are generally reported in revenues at gross charges. In the first quarter of 2003, the Company announced that patients treated at an HCA wholly-owned hospital for non-elective care who have income at or below 200% of the Federal poverty level are eligible for charity care, a standard HCA estimates that 70% of its hospitals were previously using. The Federal poverty level is established by the Federal government and is based on income and family size. In the third or fourth quarter of 2003, HCA expects to implement a sliding scale of discounts for uninsured patients treated at an HCA wholly-owned hospital for non-elective care with income between 200% and 400% of the Federal poverty level. HCA received conceptual approval during the second quarter of 2003 from CMS and one of its Medicare fiscal intermediaries that the program would not adversely affect HCA’s payments from the Medicare program. HCA believes approvals from the remaining fiscal intermediaries are forthcoming. When fully implemented, the revised charity care and self-pay discounting policy changes will reduce both revenues and the provision for doubtful accounts.

     Allowance for Doubtful Accounts

      The amount of the provision for doubtful accounts is based upon management’s assessment of historical and expected net collections, business and economic conditions, trends in Federal and state governmental health care coverage and other collection indicators. Management relies on detailed reviews of historical collections and write-offs at facilities that represent a majority of HCA’s revenues and accounts receivable (the “hindsight analysis”). The Company has previously performed the hindsight analysis on an annual basis. The results of the hindsight analysis that was completed during the second quarter of 2003 indicated an increasing proportion of accounts receivable being comprised of uninsured accounts and the collectability of this category of accounts had deteriorated. In response to the hindsight results and the noted trends, the Company increased the estimated allowance for doubtful accounts by $106 million during the quarter ended June 30, 2003. The Company has decided to increase the frequency of the hindsight analysis and perform a quarterly, rolling twelve-month hindsight analysis in future periods to enable the Company to react more quickly to trends affecting the collectability of the accounts receivable. Adverse changes in general economic conditions, business office operations, payer mix, or trends in Federal or state governmental health care coverage could affect HCA’s collection of accounts receivable, cash flows and results of operations.

20

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Results of Operations

     Revenue/Volume Trends

      HCA’s revenues depend upon inpatient occupancy levels, the ancillary services and therapy programs ordered by physicians and provided to patients, the volume of outpatient procedures and the charge and negotiated payment rates for such services.

      Hospital volumes appear to be adversely impacted by several factors including general economic softness, higher unemployment levels in several key markets, increased co-payments and deductibles, physician issues related to increases in costs of physician malpractice insurance and various competitive pressures in certain markets. The operations and the volumes during the second quarter of 2003 also reflect the completed acquisition of eleven hospitals in Kansas City. Admissions for the second quarter of 2003 increased 4.5% compared to the second quarter of 2002 while same facility admissions, which excludes the hospitals acquired in Kansas City in April 2003, increased 0.6% in the second quarter of 2003 compared to the second quarter of 2002.

      Admissions related to Medicare, managed care and other discounted plans, and Medicaid and self pay for the quarters and six months ended June 30, 2003 and 2002 are set forth below.

	Quarter						Six Months
	2003			2002			2003			2002
Medicare		39	%		38	%		40	%		39	%
Managed care and other discounted plans		46			47			45			46
Medicaid and self pay		15			15			15			15
		100	%		100	%		100	%		100	%

      Same facility outpatient surgeries declined 3.6% in the second quarter of 2003 when compared to the same quarter of 2002. Important factors affecting outpatient surgeries were increased competition from physician owned specialty hospitals and physician owned freestanding surgery centers and physician issues related to physicians relocating or retiring due to rising malpractice insurance rates for physicians.

      Managed care plan provisions that are structured to influence patients to utilize outpatient or alternative delivery services as well as competition from physician owned specialty hospitals or freestanding surgery centers are expected to present ongoing challenges. To maintain and improve its operating margins in future periods, HCA must increase patient volumes while controlling the cost of providing services.

      Management believes that the proper response to these challenges includes the delivery of a broad range of quality health care services to physicians and patients, with operating decisions being made by the local management teams and local physicians, and a focus on reducing operating costs through implementation of its shared services initiatives. HCA also expects to increase, consistent with applicable laws, its participation in the development of physician partnerships for outpatient services in selected markets.

      HCA’s health care facilities’ gross charges typically do not reflect what the facilities are actually paid. HCA’s health care facilities have entered into agreements with third-party payers, including government programs and managed care health plans, under which the facilities are paid based upon the cost of providing services, predetermined rates per diagnosis, fixed per diem rates or discounts from gross charges. HCA’s facilities have experienced revenue growth due to changes in patient mix and favorable pricing trends. HCA has experienced increases in same facility revenue per equivalent admission over the prior period of 7.5% and 8.4%, for the quarters ended June 30, 2003 and 2002, respectively, and increases of 8.7% and 8.8% for the six months ended June 30, 2003 and 2002, respectively. There can be no assurance that HCA will continue to receive these levels of increases in the future. These increases were the result of renegotiating and renewing

21

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Results of Operations (continued)

     Revenue/Volume Trends (continued)

certain managed care contracts on more favorable terms, shifts of managed care admissions to more favorable plans and improved reimbursement from the government.

      The second quarter 2003 moderation in the rate of increase in same facility revenue per equivalent admission compared to prior periods reflects the Company’s roll out of a portion of the charity policies that HCA announced in March 2003. Beginning in the second quarter of 2003, patients treated at an HCA wholly-owned hospital for non-elective care who have income at or below 200% of the Federal poverty level are eligible for charity care, a standard HCA estimates that 70% of its hospitals were previously using. In the third or fourth quarter of 2003, HCA expects to implement a sliding scale of discounts for uninsured patients treated at an HCA wholly-owned hospital for non-elective care with income between 200% and 400% of the Federal poverty level. HCA received conceptual approval from CMS and one of the Company’s Medicare fiscal intermediaries that the program would not adversely affect HCA’s payments from the Medicare program. HCA believes approvals from the remaining fiscal intermediaries is forthcoming. When fully implemented, the revised charity and self-pay discounting policies are expected to reduce annual earnings before taxes by approximately $25 million.

      The approximate percentages of inpatient revenues of the Company’s facilities related to Medicare, managed care and other discounted plans, and Medicaid and self pay for the quarters and six months ended June 30, 2003 and 2002 are set forth below:

	Quarter						Six Months
	2003			2002			2003			2002
Medicare		38	%		38	%		38	%		39	%
Managed care and other discounted plans		49			50			49			49
Medicaid and self pay		13			12			13			12
		100	%		100	%		100	%		100	%

      HCA receives a significant portion of its revenues from government health programs, principally Medicare and Medicaid, which are highly regulated and subject to frequent and substantial changes. Future legislation or other changes or interpretation of government health programs could have an adverse effect on reimbursement from the government.

      Excluding the hospitals included in the Kansas City acquisition, HCA recorded $63 million and $77 million of revenues related to Medicare operating outlier cases for the quarters ended June 30, 2003 and 2002, respectively. These amounts represent 1% and 2% of revenues and 4% and 6% of Medicare revenues for the quarters ended June 30, 2003 and 2002, respectively. There can be no assurances that HCA will continue to receive these levels of Medicare operating outlier payments in future periods. Based on the Company’s estimates, future Medicare operating outlier payments will be materially, adversely affected by (a) the final regulations on outlier payments published by CMS in June 2003; and (b) the final regulation published in August 2003 for changes to the hospital inpatient prospective payment system, including the threshold for outlier payments for the Federal fiscal year beginning October 1, 2003. The outlier threshold for the 2004 Federal fiscal year has been set by CMS and has decreased to $31,000 as compared to $33,560 for the 2003 Federal fiscal year. As a result of these changes and assuming the Company does not experience changes in Medicare patient acuity levels, then the Company’s monthly revenue from operating outlier payments may be reduced by up to $12 million.

22

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Results of Operations (continued)

Operating Results Summary

      The following are comparative summaries of results from operations for the quarters and six months ended June 30, 2003 and 2002 (dollars in millions, except per share amounts):

		Quarter
		2003						2002
		Amount			Ratio			Amount			Ratio
Revenues		$	5,467			100.0		$	4,903			100.0
Salaries and benefits			2,178			39.8			1,960			40.0
Supplies			870			15.9			778			15.9
Other operating expenses			926			17.0			832			16.8
Provision for doubtful accounts			577			10.6			371			7.6
Insurance subsidiary (gains) losses on sales of investments			1			—			(1	)		—
Equity in earnings of affiliates			(53	)		(1.0	)		(55	)		(1.1	)
Depreciation and amortization			278			5.1			255			5.2
Interest expense			123			2.2			108			2.2
Gains on sales of facilities			(1	)		—			—			—
Impairment of long-lived assets			130			2.4			19			0.4
Investigation related costs			1			—			13			0.3
			5,030			92.0			4,280			87.3
Income before minority interests and income taxes			437			8.0			623			12.7
Minority interests in earnings of consolidated entities			47			0.9			42			0.8
Income before income taxes			390			7.1			581			11.9
Provision for income taxes			150			2.7			231			4.8
Net income		$	240			4.4		$	350			7.1
Basic earnings per share		$	0.47					$	0.68
Diluted earnings per share		$	0.47					$	0.66
% changes from prior year(a):
	Revenues		11.5	%					9.5	%
	Income before income taxes		(32.9	)					35.0
	Net income		(31.4	)					24.2
	Basic earnings per share		(30.9	)					28.3
	Diluted earnings per share		(28.8	)					26.9
	Admissions(b)		4.5						0.7
	Equivalent admissions(c)		3.6						1.3
	Revenue per equivalent admission		7.6						8.1
Same facility % changes from prior year(d):
	Revenues		7.1						11.7
	Admissions(b)		0.6						2.3
	Equivalent admissions(c)		(0.4	)					3.0
	Revenue per equivalent admission		7.5						8.4

23

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Results of Operations (continued)

     Operating Results Summary (continued)

		Six Months
		2003						2002
		Amount			Ratio			Amount			Ratio
Revenues		$	10,740			100.0		$	9,776			100.0
Salaries and benefits			4,274			39.8			3,890			39.8
Supplies			1,715			16.0			1,556			15.9
Other operating expenses			1,779			16.5			1,632			16.7
Provision for doubtful accounts			1,005			9.4			739			7.6
Insurance subsidiary (gains) losses on sales of investments			1			—			4			—
Equity in earnings of affiliates			(111	)		(1.0	)		(106	)		(1.1	)
Depreciation and amortization			539			4.9			499			5.2
Interest expense			237			2.2			229			2.3
Gains on sales of facilities			(75	)		(0.7	)		—			—
Impairment of long-lived assets			130			1.2			19			0.2
Investigation related costs			5			0.1			30			0.3
			9,499			88.4			8,492			86.9
Income before minority interests and income taxes			1,241			11.6			1,284			13.1
Minority interests in earnings of consolidated entities			86			0.8			77			0.7
Income before income taxes			1,155			10.8			1,207			12.4
Provision for income taxes			446			4.2			472			4.9
Net income		$	709			6.6		$	735			7.5
Basic earnings per share		$	1.39					$	1.44
Diluted earnings per share		$	1.37					$	1.40
% changes from prior year(a):
	Revenues		9.9	%					8.9	%
	Income before income taxes		(4.4	)					24.1
	Net income		(3.6	)					17.7
	Basic earnings per share		(3.5	)					24.1
	Diluted earnings per share		(2.1	)					23.9
	Admissions(b)		1.9						(0.2	)
	Equivalent admissions(c)		1.2						0.4
	Revenue per equivalent admission		8.6						8.5
Same facility % changes from prior year(d):
	Revenues		8.0						11.4
	Admissions(b)		0.1						1.6
	Equivalent admissions(c)		(0.6	)					2.4
	Revenue per equivalent admission		8.7						8.8

(a)	Income and earnings per share amounts for 2001 are based upon adjusted net income (excludes goodwill amortization, net of taxes).
(b)	Represents the total number of patients admitted to the Company’s hospitals and is used by management and certain investors as a general measure of inpatient volume.
(c)	Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount by gross inpatient revenue. The equivalent admissions computation “equates” outpatient revenue to the volume measure (admissions) used to measure inpatient volume resulting in a general measure of combined inpatient and outpatient volume.
(d)	Same facility information excludes the operations of hospitals and their related facilities which were either acquired or divested during the current and prior period.

24

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Results of Operations (continued)

Quarters Ended June 30, 2003 and 2002

      Income before income taxes decreased 32.9% from $581 million in the second quarter of 2002 to $390 million in the second quarter of 2003. The results for the second quarter of 2003 include an increase in the allowance for doubtful accounts of $106 million and an impairment of long-lived assets of $130 million.

      In April 2003, HCA completed the acquisition of eleven hospitals in Kansas City. During the second quarter of 2003, the Kansas City hospitals that were acquired produced revenues of $232 million and a loss before income taxes of $13 million. The Kansas City hospitals are included in the Company’s Western Group.

      For the second quarter of 2003, admissions increased 4.5% and same facility admissions increased by 0.6% compared to the same period last year. Outpatient surgical volumes increased 1.5%, but decreased 3.6% on a same facility basis. The weaker than expected volumes were the result of general economic conditions in certain markets, increased co-payments and deductibles, physician issues related to physicians relocating or retiring due to rising physician malpractice insurance rates and various competitive pressures in certain markets.

      Salaries and benefits decreased, as a percentage of revenues, to 39.8% in the second quarter of 2003 from 40.0% in the same quarter of 2002. During the second quarter of 2003, significant steps were taken to ensure that hospitals were effectively matching labor with hospital volume trends.

      Supplies remained flat as a percentage of revenues. Rising supply costs, particularly in the pharmaceutical, orthopedic and cardiac areas, continue to be a challenge for the Company.

      Other operating expenses, as a percentage of revenues, increased to 17.0% in the second quarter of 2003 compared to 16.8% in the second quarter of 2002, due primarily to other operating expenses being higher, as a percent of revenues, for the acquired Kansas City hospitals. Other operating expenses is primarily comprised of contract services, professional fees, repairs and maintenance, rents and leases, utilities, insurance (including professional liability insurance) and non-income taxes.

      Provision for doubtful accounts, as a percentage of revenues, increased to 10.6% in the second quarter of 2003 from 7.6% in the second quarter of 2002. During the second quarter of 2003, the provision for doubtful accounts was increased by $106 million based upon the results of the Company’s customary “hindsight analysis”, in which the Company’s accounts receivable during a previous twelve-month period are analyzed. The historical “look back” results, along with considerations of current economic trends and collection indicators, are used as the basis for the Company’s estimate of the appropriate amount of allowance for doubtful accounts for its current accounts receivable. The Company will begin updating the hindsight analysis on a quarterly basis in the future. Once the charity care and self-pay discounting policy changes are fully implemented, the Company expects an annual reduction in net revenues of approximately $325 million to $375 million, as well as a corresponding reduction to the provision for doubtful accounts of $300 million to $350 million.

      Equity in earnings of affiliates decreased from $55 million in the second quarter of 2002 to $53 million in the second quarter of 2003 due to decreases in operating results at joint ventures accounted for under the equity method of accounting.

      Depreciation and amortization decreased, as a percentage of revenues, to 5.1% in the second quarter of 2003 from 5.2% in the second quarter of 2002.

      Interest expense increased to $123 million in the second quarter of 2003 from $108 million in the second quarter of 2002. The average of the beginning and ending debt balances for the Company increased from $7.1 billion for the second quarter of 2002 to $8.0 billion for the second quarter of 2003.

25

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Results of Operations (continued)

Quarters Ended June 30, 2003 and 2002 (continued)

      During the second quarter of 2003, HCA announced plans to discontinue activities associated with the internal development of a new patient accounts receivable management system resulting in a non-cash, pretax charge of $130 million. The Company is now redirecting efforts in this area to the implementation of enhancements to its existing patient accounting system. During the second quarter of 2002, HCA management decided to delay the development and implementation of certain financial and procurement information system components of its ERP project, resulting in a non-cash, pretax charge of $19 million.

      During the second quarters of 2003 and 2002, respectively, HCA incurred $1 million and $13 million of professional fees (legal and accounting) related to the governmental investigations.

      Minority interests increased from $42 million for the second quarter of 2002 to $47 million for the second quarter of 2003 due to improved operating results at certain of HCA’s consolidating joint ventures.

Six Months Ended June 30, 2003 and 2002

      Income before income taxes decreased 4.4% from $1.207 billion for the six months ended June 30, 2002 to $1.155 billion in the first half of 2003. The results of the first six months of 2003 include an increase in the allowance for doubtful accounts of $106 million, an asset impairment charge of $130 million and gains on sales of facilities of $75 million.

      For the first six months of 2003, admissions increased 1.9% and same facility admissions increased by 0.1% compared to the same period last year. Outpatient surgical volumes decreased 1.1%, and decreased 3.2% on a same facility basis. HCA experienced weaker than expected volumes during the first quarter of 2003 due to a weak flu season, the general economic conditions in certain markets, the non-renewal of certain managed care contracts, increased co-payments and deductibles, physician issues related to physicians relocating or retiring due to rising physician malpractice insurance rates and various competitive pressures in certain markets. While volumes were closer to the Company’s expectations in the second quarter of 2003, many of these trends continued into the second quarter of 2003. Revenues increased 9.9% to $10.7 billion for the first half of 2003 compared to $9.8 billion for 2002. The increase was primarily due to an increase in revenue per equivalent admission of 8.6%.

      Salaries and benefits, as a percentage of revenues, remained relatively flat at 39.8% in 2003 and 2002. Lower than expected volumes required steps to ensure that hospitals match labor costs with volume trends.

      Supply costs remained relatively flat as a percentage of revenues at 16.0% for the six months ended June 30, 2003 compared to 15.9% for the six months ended June 30, 2002.

      Other operating expenses (primarily consisting of contract services, professional fees, repairs and maintenance, rents and leases, utilities, insurance and non-income taxes) as a percentage of revenues, decreased to 16.5% in 2003 from 16.7% in 2002. These expenses tend to decrease, as a percentage of revenues, when the Company experiences revenue increases, because the majority of these expenses are fixed in nature.

      Provision for doubtful accounts, as a percentage of revenues, increased to 9.4% in the six months ended June 30, 2003 from 7.6% in the six months ended June 30, 2002. During the second quarter of 2003, the provision for doubtful accounts was increased by $106 million. This change in estimate was based upon the results of the Company’s customary “hindsight analysis”, in which the Company’s accounts receivable during a previous twelve-month period are analyzed. The historical “look back” results, along with considerations of current economic trends and collection indicators, are used as the basis for the Company’s estimate of the appropriate amount of allowance for doubtful accounts for its current accounts receivable.

26

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Results of Operations (continued)

Six Months Ended June 30, 2003 and 2002 (continued)

      Equity in earnings of affiliates increased from $106 million in the first six months of 2002 to $111 million in the first six months of 2003 due to increases in operating results at joint ventures accounted for under the equity method of accounting.

      Depreciation and amortization decreased, as a percentage of revenues, to 4.9% in the six months ended June 30, 2003 from 5.2% in the six months ended June 30, 2002 due to the fixed nature of these costs combined with increases in revenues of 9.9% in the first six months of 2003 compared to same period of 2002.

      Interest expense increased to $237 million in the six months ended June 30, 2003 from $229 million in the six months ended June 30, 2002. The average of the beginning and ending debt balances for the Company increased from $7.3 billion for the six months ended June 30, 2002 to $7.7 billion for the six months ended June 30, 2003.

      During the first six months of 2003, HCA recognized a pretax gain of $75 million ($43 million after-tax) on the sales of two leased hospitals and one consolidating hospital, and the working capital settlement of a sale completed in 2002. Proceeds from the sales were used to repay bank borrowings.

      During the second quarter of 2003, HCA announced plans to discontinue activities associated with the internal development of a new patient accounts receivable management system resulting in a non-cash, pretax charge of $130 million. During the second quarter of 2002, HCA management decided to delay the development and implementation of certain financial and procurement information system components of its ERP project, resulting in a non-cash, pretax charge of $19 million.

      During the first six months of 2003 and 2002, respectively, HCA incurred $5 million and $30 million of professional fees (legal and accounting) related to the governmental investigations.

      Minority interests increased to $86 million for the six months ended June 30, 2003 from $77 million for the six months ended June 30, 2002 due to improved operating results at certain of HCA’s consolidating joint ventures.

Liquidity and Capital Resources

      Cash provided by operating activities totaled $1.075 billion in the first six months of 2003 compared to $1.224 billion in the first six months of 2002. Working capital totaled $945 million at June 30, 2003 and $766 million at December 31, 2002. During the second quarter of 2003, the Company paid CMS $250 million.

      Cash used in investing activities was $1.797 billion in the first six months of 2003 compared to $882 million in the first six months of 2002. Excluding acquisitions, capital expenditures were $920 million in 2003 and $829 million in 2002. HCA has reduced planned capital expenditures from $2.1 billion for 2004 to $1.8 to $1.9 billion. At June 30, 2003, there were projects under construction, which had an estimated additional cost to complete and equip over the next five years of approximately $2.3 billion. During April 2003, HCA completed the acquisition of the Health Midwest system in Kansas City. The aggregate cash paid by HCA at closing was $855 million. HCA expects to finance capital expenditures with internally generated and borrowed funds.

      In addition to cash flows from operations, available sources of capital include amounts available under HCA’s $1.75 billion revolving credit facility (the “Credit Facility”) ($512 million available as of July 31, 2003) and anticipated access to public and private debt markets. Management believes that its available sources of capital are adequate to expand, improve and equip its existing health care facilities and to complete selective acquisitions.

27

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Liquidity and Capital Resources (continued)

      Investments of HCA’s professional liability insurance subsidiary are held to maintain statutory equity and pay claims and totaled $1.849 billion and $1.655 billion at June 30, 2003 and December 31, 2002, respectively. Claims payments, net of reinsurance recoveries, during the next twelve months are expected to approximate $300 million. The estimation of the timing of claims payments beyond a year can vary significantly. HCA’s wholly-owned insurance subsidiary has entered into certain reinsurance contracts, and the obligations covered by the reinsurance contracts remain on the balance sheet as the subsidiary remains liable to the extent that the reinsurers do not meet their obligations under the reinsurance contracts. To minimize its exposure to losses from reinsurer insolvencies, HCA routinely monitors the financial condition of its reinsurers. The amounts receivable related to the reinsurance contracts of $246 million and $265 million at June 30, 2003 and December 31, 2002, respectively, are included in other assets.

      Cash provided by financing activities totaled $745 million during the first six months of 2003 compared to cash used in financing activities of $376 million during the first six months of 2002. During 2003, HCA accessed the Credit Facility and the public debt market to raise capital.

      During the second quarter of 2003, HCA paid CMS $250 million to resolve all Medicare cost report, home office cost statement, and appeal issues between HCA and CMS for the cost report periods ending before August 1, 2001. During July 2003, HCA paid the DOJ $641 million (including $10 million in accrued interest) to resolve all remaining investigation issues between the Company and the DOJ. HCA also paid $17.7 million to state Medicaid agencies and $33 million for private party legal fees. Upon the Company making the payments to the DOJ, the Company no longer has any remaining obligation to maintain letters of credit with the DOJ.

      In February 2003, HCA issued $500 million of 6.25% notes due February 15, 2013. In July 2003, HCA issued $500 million of 6.75% notes due July 15, 2013. Following the issuance of the July 2003 notes, the Company has issued debt securities equal to the amount registered in the $1.5 billion shelf registration statement filed in May 2002.

      During July 2003, HCA filed a shelf registration statement and prospectus with the SEC which allows the Company to issue from time to time, up to $2.5 billion in debt securities.

      HCA’s $2.5 billion credit agreement (the “2001 Credit Agreement”) which includes the Credit Facility has a final maturity in April 2006. Interest under the 2001 Credit Agreement is payable at a spread to LIBOR, a spread to the prime lending rate or a competitive bid rate. The spread is dependent on HCA’s credit ratings. The 2001 Credit Agreement contains customary covenants which include (i) limitations on debt levels, (ii) limitations on sales of assets, mergers and changes of ownership, and (iii) maintenance of minimum interest coverage ratios. As of July 31, 2003, HCA was in compliance with all such covenants.

      In April 2003, HCA announced an authorization to repurchase $1.5 billion of its common stock. HCA expects to repurchase its shares from time-to-time through open market purchases or privately negotiated transactions. During the second quarter 2003, HCA, through open market purchases, repurchased under this authorization 10.2 million shares of its common stock for $328 million.

      In July 2002, HCA announced an authorization to repurchase up to 12 million shares of its common stock. HCA made open market purchases during 2002 of 6.2 million shares for $282 million, and during the first quarter of 2003, 3.7 million shares for $148 million. During the second quarter of 2003, HCA made open market purchases of 2.1 million shares for $66 million, which completed the repurchases under this authorization. The repurchases were intended to offset the dilutive effect of employee stock compensation programs.

      During 2001, HCA entered into an agreement with a financial institution that resulted in the financial institution investing in an entity that would acquire HCA common stock. This consolidated affiliate acquired

28

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Liquidity and Capital Resources (continued)

16.8 million of HCA shares in connection with HCA’s settlement of certain forward purchase contracts. In June 2002, HCA repaid the financial institution and received 16.8 million shares of the Company’s common stock. The quarterly return on the financial institution’s investment, based on LIBOR plus 87.5 basis points return rate was recorded as minority interest expense during 2002.

      During the second quarter of 2003, HCA announced plans to discontinue activities associated with the development of a patient accounting software system resulting in a non-cash, pretax charge of $130 million. HCA had estimated that the patient accounting project would have required total expenditures of approximately $400 million to develop and install. The Company is now redirecting efforts in this area to the implementation of enhancements to its existing patient accounting system. HCA is also in the process of implementing an enterprise resource planning (“ERP”) system to replace its financial and human resources information systems and reporting process. The ERP system is designed to improve the integration among the Company’s various software systems and allow for more efficient collecting, sharing and analyzing of data. The ERP system should provide more flexibility to format reports to fit facilities’ needs and allow employees to use their personal computers to gather and analyze information. Management estimates that the ERP project will require total expenditures of approximately $330 million to develop and install. At June 30, 2003, project-to-date costs incurred were $180.3 million ($111.8 million of the costs incurred have been capitalized and $68.5 million have been expensed). Management expects that the ERP system development, testing, data conversion and installation will continue through 2006. There can be no assurance that the development and implementation of ERP will not be delayed, that the total cost will not be significantly more than currently anticipated, that business processes will not be interrupted during implementation or that HCA will realize the expected benefits and efficiencies from the developed products.

      Management believes that cash flows from operations, amounts available under the Credit Facility and HCA’s anticipated access to public and private debt markets are sufficient to meet expected liquidity needs during the next twelve months.

Market Risk

      HCA is exposed to market risk related to changes in market values of securities. The investments in debt and equity securities of HCA’s wholly-owned insurance subsidiary were $1.263 billion and $586 million, respectively, at June 30, 2003. These investments are carried at fair value with changes in unrealized gains and losses being recorded as adjustments to other comprehensive income. The fair value of investments is generally based on quoted market prices. During the third quarter of 2002, due to a continued overall market decline and management’s review and evaluation of the individual investment securities, management concluded that certain unrealized losses of HCA’s insurance subsidiary’s equity investments were considered “other-than-temporary.” HCA recorded an impairment charge on the identified investment securities of $168 million. The declines in fair value and any resulting losses incurred on sales of the securities on which the impairment charge was recorded do not present a current liquidity concern to the Company, as professional liability claim payments, net of reinsurance recoveries, during the next twelve months are estimated to be approximately $300 million and $1.849 billion of investment securities are available. However, if the insurance subsidiary were to experience market declines in its investments, this could require additional investment by the Company to allow the insurance subsidiary to satisfy its minimum capital requirements.

      HCA evaluates, among other things, the financial position and near term prospects of the issuer, conditions in the issuer’s industry, liquidity of the investment, changes in the amount or timing of expected future cash flows from the investment, and recent downgrades of the issuer by a rating agency to determine if and when a decline in the fair value of an investment below amortized cost is considered “other-than-temporary”. The length of time and extent to which the fair value of the investment is less than amortized cost and HCA’s ability and intent to retain the investment to allow for any anticipated recovery in the investment’s

29

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Liquidity and Capital Resources (continued)

Market Risk (continued)

fair value are important components of management’s investment securities evaluation process. At June 30, 2003, HCA had a net unrealized gain of $130 million on the insurance subsidiary’s investment securities.

      HCA is also exposed to market risk related to changes in interest rates on its indebtedness, and HCA periodically enters into interest rate swap agreements to manage its exposure to these fluctuations. HCA’s interest rate swap agreements involve the exchange of fixed and variable rate interest payments between two parties, based on common notional principal amounts and maturity dates. The notional amounts and interest payments in these agreements match the cash flows of the related liabilities. The notional amounts of the swap agreements represent balances used to calculate the exchange of cash flows and are not assets or liabilities of HCA. Any market risk or opportunity associated with these swap agreements is offset by the opposite market impact on the related debt. HCA’s credit risk related to these agreements is considered low because the swap agreements are with creditworthy financial institutions. The interest payments under these agreements are settled on a net basis. These derivatives and the related hedged debt amounts have been recognized in the financial statements at their respective fair values.

      With respect to HCA’s interest-bearing liabilities, approximately $2.4 billion of long-term debt at June 30, 2003 is subject to variable rates of interest, while the remaining balance in long-term debt of $6.0 billion at June 30, 2003 is subject to fixed rates of interest. Both the general level of interest rates and, for the 2001 Credit Agreement, the Company’s credit rating affect HCA’s variable interest rate. HCA’s variable rate debt is comprised of the Company’s Credit Facility on which interest is payable generally at LIBOR plus 0.7% to 1.5% (depending on HCA’s credit ratings), a bank term loan on which interest is payable generally at LIBOR plus 1% to 2%, and fixed rate notes on which interest rate swaps have been employed on which interest is payable at LIBOR plus 1.9% to 2.4%. Due to decreases in LIBOR and the improvement in the Company’s credit rating, the average rate for the Company’s Credit Facility decreased from 2.55% for the quarter ended June 30, 2002 to 1.93% for the quarter ended June 30, 2003, and the average rate for the Company’s term loans decreased from 2.84% for the quarter ended June 30, 2002 to 2.25% for the quarter ended June 30, 2003. The estimated fair value of HCA’s total long-term debt was $8.8 billion at June 30, 2003. The estimates of fair value are based upon the quoted market prices for the same or similar issues of long-term debt with the same maturities. Based on a hypothetical 1% increase in interest rates, the potential annualized reduction to future pretax earnings would be approximately $24 million. The impact of such a change in interest rates on the fair value of long-term debt would not be significant. The estimated changes to interest expense and the fair value of long-term debt are determined considering the impact of hypothetical interest rates on HCA’s borrowing cost and long-term debt balances. To mitigate the impact of fluctuations in interest rates, HCA generally targets a portion of its debt portfolio to be maintained at fixed rates. Foreign operations and the related market risks associated with foreign currency are currently insignificant to HCA’s results of operations and financial position.

Pending IRS Disputes

      The Company is contesting income taxes and related interest, proposed by the IRS for prior years, aggregating approximately $331 million as of June 30, 2003. Management believes that final resolution of these disputes will not have a material adverse effect on the results of operations or liquidity of the Company. See Note 5 — Income Taxes in the notes to condensed consolidated financial statements for a description of the pending IRS disputes.

30

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Operating Data

			2003		2002
CONSOLIDATING
Number of hospitals in operation at:
	March 31			173		175
	June 30			184		175
	September 30					175
	December 31					173
Number of freestanding outpatient surgical centers in operation at:
	March 31			74		74
	June 30			76		75
	September 30					74
	December 31					74
Licensed hospital beds at(a):
	March 31			39,898		40,054
	June 30			42,152		39,930
	September 30					40,056
	December 31					39,932
Weighted average licensed beds(b):
	Quarter:
		First		39,957		40,079
		Second		42,178		39,844
		Third				39,998
		Fourth				40,020
	Year					39,985
Average daily census(c):
	Quarter:
		First		22,524		22,897
		Second		22,201		21,185
		Third				20,883
		Fourth				21,099
	Year					21,509
Admissions(d):
	Quarter:
		First		404,500		407,300
		Second		409,000		391,400
		Third				392,400
		Fourth				391,700
	Year					1,582,800

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Operating Data — (continued)

			2003		2002
Equivalent admissions(e):
	Quarter:
		First		587,300		594,700
		Second		605,300		584,200
		Third				585,200
		Fourth				575,300
	Year					2,339,400
Average length of stay (days)(f):
	Quarter:
		First		5.0		5.1
		Second		4.9		4.9
		Third				4.9
		Fourth				5.0
	Year					5.0
Emergency room visits(g):
	Quarter:
		First		1,216,200		1,206,900
		Second		1,268,300		1,198,000
		Third				1,211,900
		Fourth				1,186,000
	Year					4,802,800
Outpatient surgeries(h):
	Quarter:
		First		194,600		202,000
		Second		209,500		206,500
		Third				201,400
		Fourth				200,000
	Year					809,900
NON-CONSOLIDATING(i)
Number of hospitals in operation at:
		March 31.		6		6
		June 30.		6		6
		September 30.				6
		December 31.				6
Number of freestanding outpatient surgical centers in operation at:
		March 31.		4		3
		June 30.		4		5
		September 30.				4
		December 31.				4

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued)

Operating Data — (continued)

		2003		2002
Licensed hospital beds at:
	March 31.		2,093		2,063
	June 30.		2,093		2,063
	September 30.				2,047
	December 31.				2,047

(a)	Licensed beds are those beds for which a facility has been granted approval to operate from the applicable state licensing agency.
(b)	Weighted average licensed beds represents the average number of licensed beds, weighted based on periods owned.
(c)	Represents the average number of patients in the Company’s hospital beds each day.
(d)	Represents the total number of patients admitted to the Company’s hospitals and is used by management and certain investors as a general measure of inpatient volume.
(e)	Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount by gross inpatient revenue. The equivalent admissions computation “equates” outpatient revenue to the volume measure (admissions) used to measure inpatient volume resulting in a general measure of combined inpatient and outpatient volume.
(f)	Represents the average number of days admitted patients stay in the Company’s hospitals.
(g)	Represents the number of patients treated in the Company’s emergency rooms.
(h)	Represents the number of surgeries performed on patients who were not admitted to the Company’s hospitals. Pain management and endoscopy procedures are not included in outpatient surgeries.
(i)	The non-consolidating facilities include facilities operated through 50/50 joint ventures which are not controlled by the Company and are accounted for using the equity method of accounting.

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ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

      The information called for by this item is provided under the caption “Market Risk” under Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

ITEM 4.     CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

      HCA’s chief executive officer and principal financial officer have reviewed and evaluated the effectiveness of HCA’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this quarterly report. Based on that evaluation, the chief executive officer and principal financial officer have concluded that HCA’s disclosure controls and procedures effectively and timely provide them with material information relating to HCA and its consolidated subsidiaries required to be disclosed in the reports HCA files or submits under the Exchange Act.

Changes in Internal Controls

      During the period covered by this report, there has been no change in the Company’s internal controls over financial reporting that has materially affected or is reasonably likely to materially affect the Company’s internal controls over financial reporting.

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Part II:     Other Information

Item 1:     Legal Proceedings

      The Company operates in a highly regulated and litigious industry. As a result, various lawsuits, claims and legal and regulatory proceedings have been and can be expected to be instituted or asserted against the Company from time to time. The resolution of any such lawsuits, claims or legal and regulatory proceedings could materially, adversely affect the Company’s results of operations and financial position in a given period.

Government Investigation, Claims and Litigation

      HCA continues to be the subject of the following governmental investigations and litigation related to its business practices. While it is premature to predict the final outcome of these matters, it is possible that an adverse resolution of these matters could have a material adverse impact of the Company’s results of operations and financial position in a given period.

      Commencing in 1997, HCA was the subject of governmental investigations and litigation relating to its business practices. The governmental investigations included activities for certain entities for periods prior to their acquisition by the Company and activities for certain entities that have been divested. As part of the investigation, the United States intervened in a number of qui tam actions brought by private parties.

      The investigation was concluded through a series of agreements executed in 2000 and 2003. In December 2000, HCA entered into a Plea Agreement with the Criminal Division of the Department of Justice (the “DOJ”) and various U.S. Attorneys’ offices (the “Plea Agreement”) and a Civil and Administrative Settlement Agreement with the Civil Division of the DOJ (the “Civil Agreement”). The agreements resolved all Federal criminal issues outstanding against HCA and certain issues involving Federal civil claims by, or on behalf of, the government against HCA relating to DRG coding, outpatient laboratory billing and home health issues. The civil issues that were not covered by the Civil Agreement included claims related to physician relations, cost report and wound care issues. The Civil Agreement was approved by the Federal District Court of the District of Columbia in August 2001. HCA paid the government $840 million (plus $60 million of accrued interest), as provided by the Civil Agreement and Plea Agreement, during 2001. HCA also entered into a Corporate Integrity Agreement (“CIA”) with the Office of Inspector General of the Department of Health and Human Services.

      The remaining aspects of the investigation were resolved during 2003. In June 2003, HCA announced that the Company and the Civil Division of the DOJ signed agreements whereby the United States would dismiss the various claims it had brought related to physician relations, cost reports and wound care issues (the “DOJ Agreement”). The DOJ Agreement received court approval in July 2003, and HCA paid the DOJ $641 million (including accrued interest of $10 million) during July 2003. The DOJ Agreement does not affect qui tam cases in which the government has not intervened. In addition, the CIA previously entered into by the Company remains in effect. The Company also finalized an agreement with a negotiating team representing states that may have claims against the Company. Under this agreement HCA paid $17.7 million in July 2003 to state Medicaid agencies to resolve these claims. The Company also paid $33 million for reasonable legal fees of the private parties. In connection with the DOJ Agreement, HCA recorded a pretax charge of $603 million ($418 million after-tax) in the fourth quarter of 2002.

      Upon the Company making the payment provided under the DOJ Agreement, the Company no longer has any remaining obligation to maintain letters of credit with the DOJ.

      During June 2003, HCA announced that the Company and the Centers for Medicare and Medicaid Services (“CMS”) signed an agreement, documenting the understanding announced in March 2002, to resolve all Medicare cost report, home office cost statement and appeal issues between HCA and CMS (the “CMS Agreement”) for cost report periods ended before August 1, 2001. As a result of the CMS Agreement, HCA paid CMS $250 million in June 2003. HCA recorded a pretax charge of $260 million ($165 million after-tax), consisting of the accrual of $250 million for the settlement payment and the write-off of $10 million

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of net Medicare cost report receivables. This charge was recorded in the consolidated income statement for the year ended December 31, 2001.

      HCA remains the subject of a December 1997 formal order of investigation by the Securities and Exchange Commission (the “SEC”). HCA understands that the investigation includes the anti-fraud, insider trading, periodic reporting and internal accounting control provisions of the Federal securities laws. The CIA previously entered into by the Company remains in effect.

      If HCA was found to be in violation of Federal or state laws relating to Medicare, Medicaid or similar programs or breach of the CIA, HCA could be subject to substantial monetary fines, civil and criminal penalties and/or exclusion from participation in the Medicare and Medicaid programs. Any such sanctions or expenses could have a material adverse effect on HCA’s financial position, results of operation and liquidity. See Note 10 — Contingencies and Part II, Item 1: Legal Proceedings.

Lawsuits

     Qui Tam Actions

      Several qui tam actions have been brought by relators on behalf of the United States and have been unsealed and served on the Company. The actions allege, in general, that the Company and certain affiliates violated the False Claims Act, 31 U.S.C. § 3729, et seq., for improper claims submitted to the government for reimbursement. The lawsuits generally seek damages of three times the amount of Medicare or Medicaid claims (involving false claims) presented by the defendants to the Federal government, civil penalties of not less than $5,500 or more than $11,000 for each such Medicare or Medicaid claim, attorneys’ fees and costs. In many instances there are additional common law claims.

      In February 1999, the United States filed a motion before the Judicial Panel on Multidistrict Litigation (“MDL”) seeking to transfer and consolidate, pursuant to 28 U.S.C. § 1407, qui tam actions against the Company, including those sealed and unsealed, for purposes of discovery and pretrial matters, to the United States District Court for the District of Columbia. The MDL panel granted the motion and all of the qui tam cases subject to the motion have been consolidated to the U.S. District Court of the District of Columbia.

      In June 2003, HCA announced that the Company and the Civil Division of the DOJ signed agreements whereby the United States would dismiss the remaining claims in the various qui tam cases in which it had intervened. The dismissals were entered in July 2003, and HCA made a payment of $641 million, including accrued interest.

A.     Qui Tam Actions Resolved by the July 2003 Dismissals

      The United States intervened in eight of the consolidated cases, which fall generally in three categories: (1) cost reports allegedly constituting false claims; (2) alleged improper financial arrangements with physicians to induce referrals; and (3) alleged false claims pertaining to certain management fees paid to Curative Health Services. The dismissed cases include:

     1. Cost Report Cases

      United States ex rel. Alderson v. Columbia/HCA, et al., Case No. 97-2-35-CIV-T-23E.

      United States ex rel. Schilling v. Columbia/HCA, Civil Action No. 96M-1264-CIV-T-23B.

      United States ex rel. Michael R. Marine v. Columbia Aventura Medical Center, et al., Case No. 97-4368 (S.D. Fla.).

     2. Physician Referral Cases

      United States ex rel. James Thompson v. Columbia/HCA Healthcare Corp., et al., Civil Action No. C-95-110.

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      United States ex rel. King v. Columbia/HCA Healthcare Corp., et al., Civ. Action No. EP-96-CA-342 (W.D. Tex.)

      United States ex rel. Ann Mroz v. Columbia/HCA Healthcare Corp., Civil Action No. 97-2828 (S.D. Fla.)

     3. Curative Health Services Cases

      United States of America ex rel. Joseph “Mickey” “Parslow v. Columbia/HCA Healthcare Corporation and Curative Health Services, Incorporated, No. 98-1260-CIV-T-23F

      United States et rel. Lanni v. Curative Health Services, et al., 98 Civ. 2501 (S.D.N.Y.)

B.     Remaining Qui Tam Actions in Which the United States Has Not Intervened

      United States of America, ex rel. Scott Pogue v. Diabetes Treatment Centers of America, Inc., et al., Civil Action No. 3-94-0515. HCA, Relator Pogue and the United States have agreed to settle claims against West Paces Ferry Hospital, the only HCA facility named in the action, for $1.5 million. A motion to dismiss these claims is pending.

      In 1998, the case United States ex rel. Barrett and Goodwin v. Columbia/HCA Healthcare Corp., et al., Civ. Action No. H-98-0861 (S.D. Tex) was filed in the United States District Court for the Southern District of Texas. In general, the complaint alleges that the Company engaged in improper financial arrangements with physicians to induce referrals in violation of the Anti-kickback Statute as well as improper upcoding of DRG codes. The relators served the complaint, and the Company filed a motion to dismiss. The United States District Court for the District of Columbia dismissed the False Claims Act causes of action with leave to amend, but denied the defendant’s motion to dismiss the relator’s retaliatory discharge claims.

      In 1997, the case United States ex rel. Hockett, Thompson & Staley v. Columbia/HCA Healthcare Corp. et al., Civ. Action No. 97-MC-29-a (W.D. Va.) was filed in the United States District Court for the Western District of Virginia. In general, the case alleges that the Company filed false claims in connection with the filing of its cost reports such as including improper inflation of cost basis, costs relating to unnecessary care to patients, and falsification of records. The Company has been served with the complaint, which it answered. Another defendant filed a motion to dismiss, which was denied on February 14, 2003. The case is now entering the discovery phase.

      In 1999, the case United States ex rel. McCready v. Columbia North Monroe Hospital, Civil Action No. 99-1099M was filed in the United States District Court for the Western District of Louisiana. In general, the case alleges that a Company hospital failed to timely transfer patients to the rehabilitation unit, a practice that allegedly resulted in improper cost allocation to the hospital’s acute care services and thus improperly increased reimbursement. The Company was served with the complaint and filed an answer. Another defendant filed a motion to dismiss, which was denied. The case is now entering the discovery phase.

Shareholder Derivative and Class Action Complaints Filed in the U.S. District Courts

      During the April 1997 to October 1997 period, numerous securities class action and derivative lawsuits were filed in the United States District Court for the Middle District of Tennessee against the Company and a number of its current and former directors, officers and/or employees.

      In August 1997, the court entered an order consolidating the above-mentioned securities class action claims into a single-captioned case, Morse, Sidney, et al. v. R. Clayton McWhorter, et al., Case No. 3-97-0370. The court administratively closed all of the other individual securities class action lawsuits. The consolidated Morse lawsuit is a purported class action seeking the certification of a class of persons or entities who acquired the Company’s common stock from April 9, 1994 to September 9, 1997. The consolidated lawsuit was brought against the Company, Richard Scott, David Vandewater, Thomas Frist, Jr., R. Clayton McWhorter, Carl E. Reichardt, Magdalena Averhoff, M.D., T. Michael Long and Donald S. MacNaughton. The lawsuit alleges, among other things, that the defendants committed violations of the Federal securities laws by materially

37

inflating the Company’s revenues and earnings through a number of practices, including upcoding, maintaining reserve cost reports, disseminating false and misleading statements, cost shifting, illegal reimbursements, improper billing, unbundling and violating various Medicare laws. The lawsuit seeks damages, costs and expenses.

      The defendants filed a motion to dismiss the Morse lawsuit. On July 28, 2000, the District Court entered an order granting the defendants’ motions to dismiss in Morse. The District Court’s order dismissed Morse with prejudice. In August 2000, plaintiffs filed a motion to alter or amend judgment and for leave to file an amended complaint and requested oral argument on their motion. The plaintiffs’ motion to alter or amend was denied in October 2000. In October 2000, plaintiffs filed their Notice of Appeal. That appeal was heard before the Sixth Circuit Court of Appeals in April 2002. The Sixth Circuit reversed and remanded the case to district court. Plaintiffs filed a fourth amended complaint, and defendants have moved to dismiss.

      The Company intends to pursue the defense of the shareholder class action complaints vigorously.

      In August 1997, the court entered an order consolidating the above-mentioned derivative law claims into a single-captioned case, Carl H. McCall as Comptroller of the State of New York and as Trustee of the New York State Common Retirement Fund, derivatively on behalf of Columbia/HCA Healthcare Corporation v. Richard L. Scott, et al., No. 3-97-0838. The court administratively closed all of the other derivative lawsuits. The consolidated McCall lawsuit was brought against the Company, Thomas Frist, Jr., Richard L. Scott, David T. Vandewater, R. Clayton McWhorter, Magdalena Averhoff, M.D., Frank S. Royal, M.D., T. Michael Long, William T. Young and Donald S. MacNaughton. The lawsuit alleges, among other things, derivative claims against the individual defendants that they intentionally or negligently breached their fiduciary duties to the Company by authorizing, permitting or failing to prevent the Company from engaging in various schemes involving improperly increasing revenue, upcoding, improper cost reporting, improper referrals, improper acquisition practices and overbilling. In addition, the lawsuit asserts a derivative claim against some of the individual defendants for breaching their fiduciary duties by allegedly engaging in improper insider trading. The lawsuit seeks restitution, damages, recoupment of fines or penalties paid by the Company, restitution and pre-judgment interest against the alleged insider trading defendants, and costs and expenses. In addition, the lawsuit seeks orders: (i) prohibiting the Company from paying individual defendants employment benefits; (ii) terminating all improper business relationships with individual defendants; and (iii) requiring the Company to implement effective corporate governance and internal control mechanisms designed to monitor compliance with Federal and state laws and ensure reports to the Board of material violations.

      The defendants filed a motion to dismiss the McCall lawsuit. In September 1999, the District Court entered an order granting the defendants’ motion to dismiss McCall with prejudice. The plaintiffs in the McCall lawsuit filed an appeal from that order. In February 2001, the United States Court of Appeals for the Sixth Circuit entered an order reversing, in part, the district court’s dismissal order and remanding the case to the trial court. In April 2001, the Sixth Circuit denied defendants’ motion for rehearing, or certification to the Delaware Supreme Court. In July 2001, the trial court issued a second case management order. The parties reached a settlement in principle that was approved by the HCA Board of Directors on January 30, 2003. The settlement was presented to the court on February 27, 2003 and received preliminary approval. Notice of the settlement by mail to shareholders and by publication occurred in March 2003. Following a notice period, final court approval was granted on June 3, 2003. The McCall settlement also provides for the dismissal of the following derivative claims:

Shareholder Derivative Actions Filed in State Courts

      Barron, Evelyn, et al. v. Magdelena Averhoff, et al., (Civil Action No. 15822NC), filed on July 22, 1997, and Kovalchick, John E. v. Magdelena Averhoff, et al., (Civil Action No. 15829NC), filed on July 29, 1997, in the Court of Chancery of the State of Delaware in and for New Castle County.

      Williams v. Averhoff, (Civil Action No. 15055-NC) filed on August 5, 1997, in the Court of Chancery of the State of Delaware in and for New Castle County.

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      State Board of Administration of Florida, the public pension fund of the State of Florida in behalf of itself and in behalf of all other stockholders of Columbia/HCA Healthcare Corporation derivatively in behalf of Columbia/HCA Healthcare Corporation vs. Magdalena Averhoff, et al., (No. 97-2729), filed in the Circuit Court in Davidson County, Tennessee.

      The matter of Louisiana State Employees Retirement System, a public pension fund of the State of Louisiana, in behalf of itself and in behalf of all other stockholders of Columbia/HCA Healthcare Corporation derivatively in behalf of Columbia/HCA Healthcare Corporation v. Magdalena Averhoff, et al., filed on March 19, 1998 in the Circuit Court of the Eleventh Judicial Circuit, Dade County, Florida, General Jurisdiction Division (Case No. 98-6050 CA04), and removed to the United States District Court, Southern District of Florida (Case No. 98-814-CIV).

Patient/Payer Actions and Other Class Actions

      In 1996, 1997, 1998 and 2000, certain plaintiffs brought purported class action lawsuits against the Company and/or its subsidiaries and affiliates. On February 4, 2003, plaintiffs in each of these cases combined their claims in a single complaint for settlement purposes in the proceeding captioned In re: Columbia/HCA Healthcare Corporation Billing Practices Litigation, Master File No. MDL 1227, pending in the United States District Court for the Middle District of Tennessee (described more fully below). Also on February 4, 2003, the District Court granted preliminary approval to a Settlement Agreement to resolve each of the following combined cases.

      The matter of In re: Columbia/HCA Healthcare Corporation Billing Practices Litigation, Master File No. MDL 1227, was commenced by order of the MDL Panel entered on June 11, 1998 granting the Company’s petition to consolidate the Boyson and Operating Engineers cases (see cases below) for pretrial purposes in the Middle District of Tennessee pursuant to 28 U.S.C. 1407. Three other cases (see cases below) that have been consolidated with Boyson and Operating Engineers in the MDL proceeding are (i) Board of Trustees of the Carpenters & Millwrights of Houston & Vicinity Welfare Trust Fund, (ii) Board of Trustees of the Texas Ironworkers’ Health Benefit Plan, and (iii) Tennessee Laborers Health and Welfare Fund. On September 21, 1998, the plaintiffs in five consolidated cases filed a coordinated class action complaint, which the Company answered on October 13, 1998. Effective November 2, 1999, a sixth case, The United Paperworkers International Union, et al. v. Columbia/HCA Healthcare Corporation, et al., was transferred by the MDL Panel for consolidated pretrial proceedings. On December 30, 1999, the plaintiffs filed a motion seeking leave to file a first amended coordinated complaint. On March 15, 2000, the court entered an order granting the plaintiffs’ motion. The amended complaint did not include Board of Trustees of the Texas Ironworkers’ Health Benefit Plan as a plaintiff but added a new plaintiff, Board of Trustees of the Pipefitters Local 522 Hospital, Medical and Life Benefit Fund. The defendants have filed an answer to the amended complaint. The plaintiffs’ complaint seeks certification of two proposed classes including all private individuals and all employee welfare benefit plans that have paid for health-related goods or services provided by the Company. The complaint alleges, among other things, that the Company has engaged in a pattern and practice of inflating charges, concealing the true nature of patients’ illnesses, providing unnecessary medical care, and billing for services never rendered. The plaintiffs seek damages, attorneys’ fees and costs, as well as disgorgement and injunctive relief. The plaintiffs filed a motion for class certification on July 19, 2002, seeking certification only of the class of employee welfare benefit plans, naming only two of the named plaintiffs (the Carpenters & Millwrights and Tennessee Laborers plans) as class representatives, and focusing their claims on claims for services never rendered. The Company filed its response to the motion for class certification on August 16, 2002. On August 14, 2002, the United Paperworkers International Union voluntarily withdrew from the case as a named plaintiff, and on September 6, 2002, the Board of Trustees of the Pipefitters Local 522 Hospital, Medical and Life Benefit Fund also voluntarily withdrew from the case as a named plaintiff. In addition, in an order and memorandum opinion dated April 12, 2000, the court ordered the Company to produce certain documents that the Company listed as subject to the attorney-client privilege and/or the attorney work product doctrine on privilege logs. The Company appealed the court’s decision to the United States Court of Appeals for the Sixth Circuit. A three-judge panel of the Court of Appeals affirmed the district court’s decision on June 10, 2002. The Company moved for reconsideration of the decision on June 24,

39

2002, and requested rehearing of the matter by the full court. On September 9, 2002, the full Court of Appeals denied the motion and remanded the case to the district court. The parties reached a tentative settlement that received preliminary court approval on February 4, 2003. Following a notice period, final court approval was granted on June 4, 2003. Cases dismissed as a result of this settlement include:

      The matter of Boyson, Cordula, on behalf of herself and all others similarly situated v. Columbia/HCA Healthcare Corporation filed on September 8, 1997 in the United States District Court for the Middle District of Tennessee, Nashville Division (Civil Action No. 3-97-0936).

      The matter of Operating Engineers Local No. 312 Health & Welfare Fund, on behalf of itself and as representative of a class of those similarly situated v. Columbia/HCA Healthcare Corporation filed in the United States District Court for the Eastern District of Texas (Civil Action No. 597CV203).

      Board of Trustees of the Carpenters & Millwrights of Houston & Vicinity Welfare Trust Fund v. Columbia/HCA Healthcare Corporation, Case No. 598CV157, and Board of Trustees of the Texas Ironworker’s Health Benefit Plan v. Columbia/HCA Healthcare Corporation, Case No. 598CV158, filed in the United States District Court for the Eastern District of Texas.

      The matter of Tennessee Laborers Health and Welfare Fund, on behalf of itself and all others similarly situated vs. Columbia/HCA Healthcare Corporation, Case No. 3-98-0437, filed in the United States District Court of the Middle District of Tennessee, Nashville Division, on May 14, 1998.

      The matter of The United Paperworkers International Union, et al. v. Columbia/HCA Healthcare Corporation, et al., filed on September 3, 1998 in the Circuit Court for Washington County, Tennessee, Civil Action No. 19350.

      The matter of Brown, Nancy, individually and on behalf of all others similarly situated v. Columbia/HCA Healthcare Corporation filed on November 16, 1995, in the Fifteenth Judicial Circuit Court in and for Palm Beach County, Florida, Case No. 95-9102 AD.

      The matter of Jackson, Harald F., individually and on behalf of all others similarly situated v. Columbia/HCA Healthcare Corporation filed in the Fifteenth Judicial Circuit Court in and for Palm Beach County, Florida on December 23, 1997, Case No. 97-011419-AI.

      Ferguson, Charles, on behalf of himself and all other similarly situated v. Columbia/HCA Healthcare Corporation, et al. filed on September 16, 1997 in the Circuit Court for Washington County, Tennessee, Civil Action No. 18679.

      The matter of Hoop, Kemp, et al. v. Columbia/HCA Healthcare Corporation, et al., filed on August 18, 1997 in the District Court of Johnson County, Texas, Civil Action No. 249-171-97.

General Liability and Other Claims

      The matter of Rocky Mountain Medical Center, Inc. v. Northern Utah Healthcare Corporation, d/b/a/ St. Mark’s Hospital, Case No. 000906627, was filed in the Third Judicial District Court of Salt Lake County, Utah on August 22, 2000 with a request for injunctive relief and damages under Utah antitrust law. Specific counts in the complaint include illegal boycott, unreasonable restraint of trade, attempt to monopolize and interference with prospective economic relations. At issue are St. Mark’s Hospital’s contracts with certain managed care organizations. The court denied the plaintiff’s request for a preliminary injunction. Both parties filed cross-motions for summary judgment and both motions were denied in December 2001. Discovery is ongoing.

      Two law firms representing groups of health insurers have approached the Company and alleged that the Company’s affiliates may have overcharged or otherwise improperly billed the health insurers for various types of medical care during the time frame from 1994 through 1997. The Company is engaged in discussions with these insurers, but no litigation has been filed. The Company is unable to determine if litigation will be filed, and if filed, what damages would be asserted.

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      The Company intends to pursue the defense of these actions and prosecution of its counterclaims and third-party claims vigorously.

      The Company is a party to certain proceedings relating to claims for income taxes and related interest in the United States Tax Court, the United States Court of Federal Claims and the Sixth Circuit. For a description of those proceedings, see Note 5 — Income Taxes in the notes to condensed consolidated financial statements.

      The Company is also subject to claims and suits arising in the ordinary course of business, including claims for personal injuries or for wrongful restriction of, or interference with, physicians’ staff privileges. In certain of these actions the claimants have asked for punitive damages against the Company, which may not be covered by insurance. In the opinion of management, the ultimate resolution of these pending claims and legal proceedings will not have a material adverse effect on the Company’s results of operations or financial position.

Item 4:     Submission of Matters to a Vote of Security Holders

      The Company’s annual meeting of stockholders was held on May 22, 2003. The following matters were voted upon at the meeting:

		Votes in Favor		Votes Withheld
1.	Election of Directors
	Magdalena H. Averhoff, M.D.		425,377,038		5,653,897
	Jack O. Bovender, Jr.		423,005,497		8,025,438
	Richard M. Bracken		425,436,151		5,594,784
	Martin Feldstein		420,714,732		10,316,203
	Thomas F. Frist, Jr., M.D.		422,644,744		8,386,191
	Frederick W. Gluck		420,691,902		10,339,033
	Glenda A. Hatchett		425,361,477		5,669,458
	Charles O. Holliday, Jr.		425,388,042		5,642,893
	T. Michael Long		425,357,470		5,673,465
	John H. McArthur		423,302,963		7,727,972
	Kent C. Nelson		425,379,638		5,651,297
	Franck S. Royal, M.D.		425,113,636		5,917,299
	Harold T. Shapiro		420,692,889		10,338,046

		Votes in Favor		Votes Against		Abstentions
2.	Stockholder Proposal Relating to Chief Executive Officer’s Compensation		21,097,451		353,886,270		7,670,028

Item 6:     Exhibits and Reports on Form 8-K

      (a)     List of Exhibits:

      Exhibit 10.1 — Administrative Settlement Agreement dated June 25, 2003, by and between the United States Department of Health and Human Services, acting through the Centers for Medicare and Medicaid Services, and HCA Inc.

      Exhibit 10.2 — Civil Settlement Agreement by and among the United States of America, acting through the United States Department of Justice and on behalf of the Office of Inspector General of the Department of Health and Human Services, the TRICARE Management Activity, and HCA Inc.

      Exhibit 12 — Statement re: Computation of Ratio of Earnings to Fixed Charges.

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      Exhibit 31.1 — Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

      Exhibit 31.2 — Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

      Exhibit 32.1 — Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

      (b)     Reports on Form 8-K filed during the quarter ended June 30, 2003:

      On April 2, 2003, the Company filed a report on Form 8-K under Items 5 and 7 which announced the completion of its acquisition of the Health Midwest system in Kansas City.

      On April 16, 2003, the Company filed a report on Form 8-K under Item 9 which announced expectations relating to first quarter earnings results.

      On April 22, 2003, the Company filed a report on Form 8-K under Item 9 which included its operating results for the 2003 first quarter.

      On April 30, 2003, the Company filed a report on Form 8-K under Item 9 which announced a $1.5 Billion Share Repurchase Program.

      On May 23, 2003, the Company filed a report on Form 8-K under Item 9 which announced a plan to discontinue development of a new patient accounting information system.

      On June 30, 2003, the Company filed a report on Form 8-K under Item 12 which announced the issuance of a press release relating to certain settlement agreements.

      Notwithstanding the foregoing, information furnished under Item 9 and Item 12 of the Company’s Current Reports on Form 8-K, including the related exhibits shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934.

42

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HCA INC.

/s/ R. MILTON JOHNSON

R. Milton Johnson

Senior Vice President and Controller

Date: August 11, 2003

43 EX-10.1 3 g83967exv10w1.txt EX-10.1 ADMINISTRATIVE SETTLEMENT AGREEMENT EXHIBIT 10.1 ADMINISTRATIVE SETTLEMENT AGREEMENT I. PARTIES This Settlement Agreement ("Agreement") is entered into between the following (hereinafter "the Parties") through their authorized representatives: the United States Department of Health and Human Services ("HHS"), acting through the Centers for Medicare & Medicaid Services ("CMS"), and HCA Inc. ("HCA"). II. DEFINITIONS For the purposes of this Agreement: "HCA Provider" shall mean any entity that meets both of the following requirements: (a) has received or is entitled to receive reimbursement from the Medicare program for services provided at a hospital, critical access hospital, skilled nursing facility, comprehensive outpatient rehabilitation facility, home health agency, hospice, rehabilitation hospital, or psychiatric hospital; and (b) is or was managed, owned or controlled by HCA or by any entity directly or indirectly at least 50% owned or controlled by HCA or any of the public companies previously known as HCA-The Healthcare Company, Hospital Corporation of America, HCA-Hospital Corporation of America, Galen Health Care, Inc., HealthTrust, Inc.-The Hospital Company, EPIC Healthcare Group, Inc., Columbia Healthcare Corporation, Columbia Hospital Corporation, Medical Care America, Inc., Basic American Medical, Inc. and Columbia/HCA Healthcare Corporation. "HCA Cost Report Overpayment Obligations" means any obligation that HCA or any HCA Provider has, could have had or could have to pay amounts to HHS or CMS (or any of their agents, including a carrier or intermediary), directly, through offset, or otherwise, arising from cost statements, cost reports or appeals which have been filed or which could have been filed by HCA or an HCA Provider for cost reporting periods ending on or before July 31, 2001. HCA Cost Report Overpayment Obligations do not include obligations to repay monies erroneously paid to HCA or an HCA Provider due to representations made by submission of any Form UB-92 or CMS Form 1500 or any actual or potential liability arising under the authority of the Inspector General of HHS for program exclusion or the imposition of civil monetary penalties. HCA Cost Report Overpayment Obligations do not include obligations of any HCA Provider sold or otherwise disposed of by HCA for any cost reporting period ending after such sale or other disposition. HCA Cost Report Obligations do not include obligations of any HCA Provider acquired after July 31, 2001, except for any cost reporting period during which such HCA Provider was previously owned in whole or in part by HCA. "Effective Time" means the time that CMS receives the electronic transfer payment set forth in paragraph 1. "DOJ" means the United States Department of Justice. III. TERMS AND CONDITIONS NOW, THEREFORE, the Parties agree as follows: 1. HCA agrees to pay to CMS $250,000,000 within five (5) business days from the execution of this Agreement by the Parties. Payment shall be made by electronic funds transfer pursuant to written instructions to be provided HCA by the Office of Financial Management of CMS no later than the date of execution of this Agreement. 2. As of the Effective Time, except as provided in Paragraphs 6 and 9 of this Agreement, HHS, on behalf of itself, its officers, and agents, including but not limited to its fiscal intermediaries ("FIs"), hereby releases and discharges HCA and all HCA Providers from any HCA Cost Report Overpayment Obligations and HHS and CMS shall not pursue such HCA Cost Report Overpayment Obligations, including by audits or in any administrative forum or court. 3. As of the Effective Time, HCA hereby releases HHS from any liability in connection with cost statements or cost reports which have been filed or could have been filed by HCA or an HCA Provider for cost reporting periods ending on or before July 31, 2001 including any administrative appeals and federal court cases (together, the "Appeals") arising from such claims. HCA shall move to withdraw such Appeals with prejudice, and shall not file any further Appeals with respect to the HCA Cost Report Overpayment Obligations. 4. For all acceptable cost reports (as defined in 42 C.F.R. ss. 413.24(f)(5)) filed and covered by this Agreement, and subject to any Special Circumstances Agreement ("SCA") ratified by HCA and CMS and except as provided in Paragraphs 5 and 9 of this Agreement, HCA and CMS agree that: (a) this Agreement will constitute the final payment determination contemplated by 42 U.S.C. ss. 1395oo; (b) HCA hereby waives its right to appeal this determination; (c) HHS and CMS waive any right they may have to reopen this payment determination with respect to any such cost report; and (d) the data and statistics set forth in or with the first twelve-month as-filed cost report filed on or after January 1, 1999, for each HCA Provider will be used as the basis for computing future reimbursement amounts that are dependent on the settlement of prior year cost reports until such time as said as-filed cost reports are superseded for this purpose by cost reports filed in connection with fiscal years ending after July 31, 2001. 5. Notwithstanding this or any other provision of this Agreement, CMS may (1) reopen HCA and/or HCA Provider cost reports for cost reporting periods ending on or before July 31, 2001, for the purpose of complying with any act of Congress requiring CMS to rely on settled cost reports for such year(s) as a basis for adjusting Federal payment rates to providers participating in Medicare; (2) reopen HCA and/or HCA Provider cost reports for the purpose of determining overpayments or underpayments for HCA Providers sold or otherwise disposed of by HCA for cost reporting periods ending subsequent to such sale or other disposition; and (3) reopen HCA and/or HCA Provider cost reports for cost reporting periods ending on or before July 31, 2001, for the purpose of implementing paragraph 15 of the December 2000 Civil and Administrative Settlement Agreement, paragraph 17 of the December 2000 Plea Agreement, and paragraph 12 of the __________ 2003 Civil Settlement Agreement; provided, however, that if CMS reopens an HCA and/or HCA Provider cost report under paragraphs 5(1) or 5(2) of this Agreement, (a) CMS will not use any such reopening either to pay any additional amounts to HCA or to seek further payments from HCA for the reopened period(s) and (b) if CMS reopens any cost report specifically identified in the last filed complaints of the United States or relators in United States ex rel. Alderson v. HCA, et al., Case No. 93-3290 (RCL); United States ex rel. Schilling v. HCA, et al., Case No. 99-3289 (RCL); United States ex rel. Marine v. Columbia Aventura Medical Center, et al., Case No. 00-1845 (RCL); United States ex rel. Lanni v. HCA, et al., Case No. 00-2584 (RCL); and United States ex rel. Parslow v. HCA, et al., Case No. 99-3338 (RCL), HCA will promptly provide to CMS alternative versions of such cost reports calculated to reflect the removal of any amounts alleged to have been inflated in such complaints so as to enable CMS to consider this data in setting future rates. Disputes with respect to reopening under 5(2) of this Agreement will be presented to the Provider Reimbursement Review Board (PRRB) for resolution. 6. As of the Effective Time, HCA and any and all HCA providers that have not yet filed acceptable cost reports (as defined by 42 C.F.R. ss. 413.24(f)(5)) for cost reporting periods ending on or before July 31, 2001, are required to file acceptable cost reports with the appropriate FIs. Notwithstanding this or any other provision of this Settlement Agreement, HCA and/or an HCA provider(s) who fails, by the Effective Time, to file an acceptable cost report(s) for cost reporting periods ending on or before July 31, 2001 with the appropriate FI(s) is subject to the provisions of 42 C.F.R. ss. 405.371(c) and all other potential penalties for failure to file a timely acceptable cost report(s). 7. 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. 8. This Agreement is entered into contemporaneous with the ________ 2003 Civil Settlement Agreement concerning HCA's alleged liability under the False Claims Act, other federal statutes, and the common law for certain conduct described in the _______ 2003 Civil Settlement Agreement; this Agreement in no way compromises, nor does payment hereunder satisfy claims or damages alleged in the Complaints or Amended Complaints of the United States dismissed through the ________ 2003 Civil Settlement Agreement. 9. Nothing herein affects the obligations of HCA and the rights of the United States and HHS pursuant to the (1) December 2000 Plea Agreement, (2) December 2000 Civil and Administrative Settlement Agreement, (3) December 2000 Corporate Integrity Agreement, and (4) the ___________ 2003 Civil Settlement Agreement. Further, nothing herein releases HCA from any administrative monetary claim arising from HCA's charging of any unallowable costs (as that term is defined in paragraph 15(a) of the December 2000 Civil and Administrative Settlement Agreement, paragraph 17 of the December 2000 Plea Agreement, and paragraph 12(a) of the 2003 Civil Settlement Agreement) incurred with respect to the claims settled under the terms of the ___________ 2003 Civil Settlement Agreement, the December 2000 Civil and Administrative Settlement Agreement, or the December 2000 Corporate Integrity Agreement. 10. 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. 11. This Agreement does not constitute evidence or an admission by any party of any liability or wrongful conduct. 12. This Agreement is intended to be for the benefit of the Parties and HCA Providers only; provided, however, that this Agreement does not release any obligations of any HCA Provider sold or otherwise disposed of for any cost reporting period ending after such sale or disposition nor does this Agreement release any obligations of any HCA Provider acquired after July 31, 2001, except for any cost reporting period during which such HCA Provider was previously owned in whole or in part by HCA. The Parties do not release any claims against any other person or entity. 13. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter of the Agreement and supersedes all prior agreements and understandings, both oral and written, between the Parties with respect to the subject matter of this Agreement. 14. This Agreement may not be amended or modified except by written consent of the Parties. 15. The undersigned individuals signing this Agreement on behalf of HCA represent and warrant that they are authorized by HCA to execute and deliver this Agreement. The undersigned United States signatories represent that they are signing this Agreement in their official capacities and that they are authorized to execute and deliver this Agreement. 16. 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 purpose of this Agreement. 17. CMS agrees to communicate all relevant terms of this Agreement to its FIs and to ensure that the FIs properly implement its provisions. "HCA" UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES HCA Inc. By "CMS" Centers for Medicare & Medicaid Services By /s/ Robert A. Waterman By /s/ Timothy Hill ------------------------------ ------------------------------------- Timothy Hill Its General Counsel Acting Director, Office of ----------------------------- Financial Management Date 6/25/03 Date 6/25/03 ---------------------------- ----------------------------------- /s/ Walter Loughlin - --------------------------------- Counsel to HCA EX-10.2 4 g83967exv10w2.txt EX-10.2 CIVIL SETTLEMENT AGREEMENT EXHIBIT 10.2 CIVIL SETTLEMENT AGREEMENT I. PARTIES This Civil Settlement Agreement ("Agreement") is entered into between the following (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 (collectively "the United States"); and HCA Inc., 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, and numerous ancillary health care facilities in at least thirty states. B. James F. Alderson, Gary L. King, Francesco Lanni, Michael Marine, Ann Mroz, Joseph "Mickey" Parslow, James M. Thompson, and John W. Schilling ("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: Civil Settlement Agreement Between the United States & HCA Inc. (1) U.S. ex rel. Alderson v. Columbia/HCA Healthcare Corp., et al, Case No. 99-3290 (D.D.C.); (2) U.S. ex rel. King v. Columbia/HCA Healthcare Corp., et al., Case No. 99-3306 (D.D.C.); (3) U.S. ex rel. Lanni v. Curative Health Services, Inc. et al., Case No. 00-2584 (D.D.C.); (4) U.S. ex rel. Marine v. Columbia Aventura Medical Center, et al., Case No. 00-1845 (D.D.C.); (5) U.S. ex rel. Mroz v. Columbia/HCA Healthcare Corp., et al., Case No. 99-3292 (D.D.C.); (6) U.S. ex rel. Parslow v. Columbia/HCA Healthcare Corp., et al., Case No. 99-3338 (D.D.C.); (7) U.S. ex rel. Schilling v. Columbia/HCA Healthcare Corp., et al., Case No. 99-3289 (D.D.C.); (8) U.S. ex rel. Thompson v. Columbia/HCA Healthcare Corp., et al., Case No. 99-3302 (D.D.C.). In the Alderson, Schilling, and Marine actions, above, HCA and certain of the HCA hospitals identified in Attachment 1 to this Agreement filed counterclaims and amended counterclaims against the United States ("HCA Counterclaims"). C. HCA submitted or caused to be submitted claims for payment to the Medicare Program (Medicare), Title XVIH of the Social Security Act, 42 U.S.C.ss.ss.1395- Civil Settlement Agreement Between the United States & HCA Inc. -2- 1395ggg, the Medicaid Program, 42 U.S.C.ss.ss.1396-1396v; and the TRICARE Program (TRIGARE), 10 U.S.C.ss.ss.1071-1110 (collectively "the government healthcare programs"). D. The United States contends that it has certain civil claims under the False Claims Act, 31 U.S.C. ss.ss. 3729-33, and other federal statutes and/or common law and equitable doctrines, as specified in Paragraph 2 below, against HCA, for engaging in the following conduct (hereinafter the "Covered Conduct"): (1) COST REPORTING For cost report or cost statement periods ending on or after January 1, 1987 and ending on or before December 31, 1997, HCA and the HCA hospitals identified in Attachment 1 to this Agreement ("the HCA Hospitals") submitted or caused to be submitted cost reports and cost statements to representatives of the government healthcare programs seeking (a) reimbursement based in whole or in part upon costs stated to have been incurred as a result of treating beneficiaries of those programs, or (b) certain other payments claimed for reimbursement through a cost report (specifically, disproportionate share payments, indirect and direct medical education payments, bad debt payments, payments on charges where program reimbursable costs exceeded those charges, organ transplant payments, CORF payments, and rural health clinic payments), all of which HCA or an HCA Hospital represented were subject to reimbursement under the laws, regulations and rules applicable to those programs. These claims were false because many of the costs for which HCA and the HCA Hospitals sought reimbursement were either not incurred, incurred in lesser amounts, and/or otherwise not "allowable," i.e., reimbursable, as claimed under the laws, regulations and rules governing the programs. Civil Settlement Agreement Between the United States & HCA Inc. -3- (2) PHYSICIAN KICKBACKS From January 1, 1987 through December 31, 1999, the HCA Hospitals (i.e., the hospitals identified in Attachment 1) and affiliated HCA home health agencies submitted or caused to be submitted claims to representatives of the government healthcare programs for items and services delivered by hospitals and home health agencies that were ordered by a physician, a member of a physician group practice, a professional corporation or other legal entity owned at least in part by a physician with whom the billing HCA provider, an HCA entity having an ownership interest in that provider, or an entity in which the HCA provider has an ownership interest, had a financial relationship, directly or through a family member. These claims were false because (a) Section 1877 of the Social Security Act ("SSA"), 42 U.S.C. ss. 1395nn (also known as the Stark Laws) prohibited the HCA providers from billing Medicare for items or services referred or ordered by physicians with whom HCA had improper financial relationships, (b) the HCA providers forfeited the right to bill the government healthcare programs for such items and services by paying remuneration to physicians intending that remuneration to induce those and other referrals in violation of the Anti-kickback Statute, 42 U.S.C. ss. 1320a-7b(b), or (c) the HCA providers were required to and did certify on cost reports submitted to fiscal intermediaries for the applicable fiscal years that items and services identified or summarized in each cost report were not provided or procured through the payment directly or indirectly of a kickback or billed in violation of federal law (i.e., the Stark Laws). (3) CURATIVE WOUND CARE CENTERS From January 1, 1993 through December 31, 1999, HCA hospitals identified in Attachment 2 to this Agreement submitted or caused to be submitted cost reports to Civil Settlement Agreement Between the United States & HCA Inc. -4- representatives of Medicare seeking reimbursement of management fees paid to Curative Health Services, Inc. ("Curative"), and seeking reimbursement for items and services rendered to patients in Wound Care Centers managed by Curative ("WCCs"). These claims were false because the management fees paid to Curative included unallowable costs for marketing and advertising. Certain of the HCA hospitals identified in Attachment 2 also submitted claims that were false because, contrary to each such hospital's certification, the management fee payments to Curative violated the Anti-kickback Statute, 42 U.S.C. ss. 1320a-7b(b), and claims submitted for items or services rendered to Medicare beneficiaries as a result were fraudulent. Additionally, the claims of certain hospitals identified in Attachment 2 for reimbursement of costs incurred for providing Procuren, a wound-healing product manufactured by Curative, were false because Procuren was not reimbursable under Medicare. (4) PPS TRANSFER From January 1, 1992 through December 31, 2000, HCA hospitals identified in Attachment 1 to this Agreement submitted or caused to be submitted claims for discharges of patients who were in fact transferred to another Prospective Payment System ("PPS") facility. Those claims were false because such patients were not "discharged" within the applicable Medicare regulations and the HCA hospitals were not entitled to the full amount of reimbursement they sought. (5) CEDARS MEDICAL CENTER COST SHIFTING From 1994 through December 31, 1997, HCA hospitals identified in Attachment 3 filed false Medicare cost reports and cost statements that included Resource Center home health costs incurred by another hospital, Cedars Medical Center, which costs Medicare would not pay Civil Settlement Agreement Between the United States & HCA Inc. -5- because Cedars' home health costs exceeded the cost limit, to other HCA hospitals that were below the cost limits. These claims were false because hospitals identified in Attachment 3 were not entitled to receive reimbursement for the costs incurred by Cedars Medical Center under the laws, regulations and rules governing Medicare. (6) LAWNWOOD REGIONAL MEDICAL CENTER CLAIMS For cost report years 1991 through 1996, HCA's Lawnwood Regional Medical Center submitted cost reports to representatives of Medicare seeking reimbursement of purportedly allowable costs. These claims were false because Lawnwood: (a) overstated the extent to which it treated a disproportionate share of indigent patients; (b) improperly reclassified certain salary and benefit costs to the skilled nursing unit, the psychiatric facility and the outpatient services department for employees who did not work in those units; (c) billed inconsistently for laboratory services; and (d) did not properly allocate the salaries and benefits of certain emergency room physicians. E. The OIG-HHS and TMA contend that they have certain administrative claims against HCA under the provisions 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, and permissive exclusion from TRICARE, 32 C.F.R. ss.199.9, for the Covered Conduct. F. HHS also contends that it has certain administrative claims against HCA for overpayments for amounts claimed through cost reports and cost statements submitted to representatives of Medicare. Those administrative overpayment claims are the subject of another Civil Settlement Agreement Between the United States & HCA Inc. -6- settlement agreement executed contemporaneously with this agreement between HCA and the HHS Centers for Medicare & Medicaid Services ("2003 HHS Administrative Agreement"). G. The Relators identified in Paragraph B above have each represented, through counsel, that they agree that the settlement amount negotiated by the United States for claims stated in the qui tam action each filed is fair, adequate, and reasonable under all the circumstances as defined by 31 U.S.C. ss. 3730(c)(2)(B). Each Relator claims entitlement under 31 U.S.C. ss. 3730(d) to a share of the proceeds of this Agreement. This Agreement does not cover the claims of any Relator to a share of the proceeds or their attorney's fees under 31 U.S.C. ss. 3730(d). Nothing in this agreement shall constitute evidence or an admission that any relator has a valid claim as a relator. H. This Settlement Agreement does not constitute evidence or an admission by any party of any liability or wrongful conduct. I. HCA has executed a letter of credit in favor of the United States in the total amount of two hundred fifty million dollars ($250,000,000) pursuant to a February 11, 1999 Letter of Credit Agreement (LOC Agreement), as amended. The LOC Agreement is incorporated herein by reference. J. HCA and OIG-HHS executed a separate Corporate Integrity Agreement ("CIA") on December 14, 2000, 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. Civil Settlement Agreement Between the United States & HCA Inc. -7- 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: 1. HCA agrees to pay to the United States $629,487,927.00, plus interest accruing at a simple rate of 4.5% per annum from February 3, 2003 through and including the Payment Date (the "Settlement Amount"). The "Payment Date" shall be within ten (10) days after entry of the Orders of Dismissal by the United States District Court for the District of Columbia. HCA agrees to pay the Settlement Amount 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 Settlement Amount represents the total of the following settlement amounts: Cost Reporting Intervened Claims: $356,000,000 Physician Kickbacks: $225,500,000 Curative Wound Care Centers: $17,000,000 PPS Transfer: $5,000,000 Cedars Medical Center Cost Shifting: $950,000 Lawnwood Regional Medical Center: $5,037,927 Amounts for Alderson and Schilling Declined Claims: Relators' Share for those Claims: $20,000,000 2. Subject to the exceptions in Paragraph 8 below, in consideration of the obligations of HCA set forth in this Agreement, conditioned upon HCA's payment in full of the Civil Settlement Agreement Between the United States & HCA Inc. -8- 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, corporations, current or former owners, partnerships or other legal entity in which HCA or an HCA subsidiary has or had an ownership interest, and the partners or other shareholders in any such partnership or other legal entity, 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; the civil money penalty provision of the Stark Laws, 42 U.S.C. ss.ss. 1395nn(g)(3), (4); or the common law and/or equitable theories of payment by mistake, unjust enrichment, recoupment, restitution, disgorgement of illegal profits and fraud, for the Covered Conduct. 3. 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 from all obligations it has under the LOC Agreement. 4. After the execution of this Agreement, the United States, HCA and Relators will file stipulations in the United States District Court for the District of Columbia for (a) dismissal with prejudice of the claims stated against HCA in the United States' Complaints and Amended Complaints in the Civil Actions identified in Paragraph B above; (b) dismissal with prejudice to Relators and without prejudice to the United States of those claims stated against HCA in the Relators' Complaints and Relators' Amended Complaints in the Civil Actions Civil Settlement Agreement Between the United States & HCA Inc. -9- identified in Paragraph B above; and (c) dismissal with prejudice to HCA and the HCA Hospitals of the HCA Counterclaims. The stipulations of dismissal will be conditioned upon receipt by the United States of the Settlement Amount, and subject to the terms of this Agreement. With the exception of those claims excluded from the above releases by Paragraph 8 below, 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. 5. 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. 6. In consideration of the obligations of HCA set forth in this Agreement and the CIA, incorporated herein by reference, conditioned upon HCA's payment in full of the Settlement Amount, the OIG-HHS agrees to 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 8, 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. Nothing in this Civil Settlement Agreement Between the United States & HCA Inc. -10- Paragraph precludes the OIG-HHS from taking action against entities or persons, or for conduct and practices, for which claims have been reserved in Paragraph 8, below. 7. 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 8, below, and as reserved in this Paragraph. TMA expressly reserves authority 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 TRICARE/CHAMPUS program under 32 C.F.R. ss.ss. 199.9 (f)(l)(i)(A), (f)(l)(i)(B), and (f)(l)(iii), based upon the Covered Conduct. 8. 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 or its agencies: a. Any civil, criminal or administrative liability arising under Title 26, U.S. Code (Internal Revenue Code); b. Any criminal liability; c. Except as stated in Paragraphs 2, 6 and 7 of this Agreement, any administrative liability, including mandatory exclusion from Federal health care programs; d. Any liability for any conduct other than the Covered Conduct; Civil Settlement Agreement Between the United States & HCA Inc. -11- e. Any claims based upon such obligations as are created by this Agreement; f. 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; g. Any claims for personal injury or property damage, or for other similar consequential damages, arising from the Covered Conduct; h. Any claims based on a failure to deliver items or services due; i. Any civil or administrative claims against individuals (including current or former directors, officers, employees, agents, or shareholders of HCA); j. Any civil or administrative claims against hospitals or other entities acquired by HCA after May 2000 for conduct during periods in which those hospitals or entities were not owned in whole or in part by HCA prior to May 2000; k. Any claims for conduct described in Paragraph (D)(l) (cost reporting) that are alleged in the relators' complaints pending as of December 2002 in the following qui lawsuits: (i) U.S. ex rel. Hockett, et al., v. Columbia/HCA Healthcare Corp., et al., No. 99-33ll(D.D.C); (ii) U.S. ex rel. McReady v. Columbia North Monroe Hospital, et al., No. 00-1846(D.D.C.); (iii) {7.5*. ex rel. Sanderson v. HCA - The Healthcare Company, et al., No. 3-01 0580 (M.D. Tenn.); Civil Settlement Agreement Between the United States & HCA Inc. -12- (iv) U.S. ex rel. Locke v. Living Hope Institute, et al., Civ. A. No. LR-C-99-031 (E.D.Ark.). 9. 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. 10. HCA and the HCA Hospitals fully and finally release the United States, its agencies, employees, servants, and agents from any claims (including, without limitation, the HCA Counterclaims and any claims for attorney's fees, costs, and expenses of every kind and however denominated) which HCA has asserted, could have asserted, 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, prosecution and settlement thereof. 11. 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 TRICARE or any State payor, related to the Covered Conduct; and HCA agrees not to resubmit to any Medicare carrier or intermediary or to TRICARE or any State payor any Civil Settlement Agreement Between the United States & HCA Inc. -13- previously denied claims related to the Covered Conduct, and agrees not to appeal any such denials of claims. 12. 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 predecessors and current and former affiliates, divisions and subsidiaries and 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, (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 attorneys 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 payments HCA makes to the United States pursuant to this Agreement and the 2003 HHS Administrative Agreement and any payments that HCA may make to any relator and/or relator's attorney, are unallowable costs on Government contracts and Civil Settlement Agreement Between the United States & HCA Inc. -14- under the Medicare Program, Medicaid Program, TRICARE Program, and Federal Employees Health Benefits Program (FEHBP). (All costs described or set forth in this Paragraph 12(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 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 Civil Settlement Agreement Between the United States & HCA Inc. -15- Department of Justice, and/or the affected agencies. The 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. 13. 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 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 Civil Settlement Agreement Between the United States & HCA Inc. -16- 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 any state, including, but not limited to, the Plea Agreement that HCA entered with the United States in December, 2000. 14. This Agreement is intended to be for the benefit of the Parties, and by this instrument the Parties do not release any claims against any other person or entity, except to the extent specifically provided for in this Agreement. 15. 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. 16. 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. 17. 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. 18. 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. Civil Settlement Agreement Between the United States & HCA Inc. -17- 19. 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 their official capacities and that they are authorized to execute this Agreement. 20. This Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same agreement. 21. This Agreement is binding on HCA's successors, transferees, heirs, and assigns. 22. 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 Settlement Agreement Between the United States & HCA Inc. -18- THE UNITED STATES OF AMERICA DATED: June 26, 2003 BY: /s/ Joyce R. Branda ---------------------------- -------------------------------- JOYCE R. BRANDA Deputy Director Commercial Litigation Branch Civil Division U.S. Department of Justice Civil Settlement Agreement Between the United States & HCA Inc. -19- DATED: June 25, 2003 BY: /s/ Larry J. Goldberg ---------------------------- -------------------------------- LARRY J. GOLDBERG Assistant Inspector for Legal Affairs Office of Inspector General United States Department of Health and Human Services Civil Settlement Agreement Between the United States & HCA Inc. -20- DATED: 24 June 03 BY: /s/ Laurel C. Gillespie ---------------------------- -------------------------------- LAUREL C. GILLESPIE Deputy General Counsel TRICARE Management Activity United States Department of Defense Civil Settlement Agreement Between the United States & HCA Inc. -21- HCA INC. DATED: 6/24/2003 BY: /s/ Robert A. Waterman ---------------------------- -------------------------------- ROBERT A. WATERMAN General Counsel HCA DATED: JUNE 24, 2003 BY: /s/ Cathryn L. Sowers ---------------------------- -------------------------------- CATHRYN L. SOWERS Vice President Litigation HCA DATED: 6/26/03 BY: /s/ Roger S. Goldman ---------------------------- -------------------------------- ROGER S. GOLDMAN WALTER P. LOUGHLIN Latham & Watkins Counsel for HCA Civil Settlement Agreement Between the United States & HCA Inc. -22- ATTACHMENT ONE HCA HOSPITALS TO WHICH COST REPORTING, PHYSICIAN KICKBACK AND PPS TRANSFER RELEASES APPLY (RELEASED LIABILITY RUNS ONLY THROUGH HCA SALE OR CLOSURE DATE)

MEDICARE PROVIDER DATE OF HCA FACILITY NUMBER SALE OR NAME (REDACTED) STREET ZIP CITY STATE CLOSURE - ----------------------------------------------------------------------------------------------------------------------------------- THOMASVILLE HOSPITAL 1440 Highway 43 North 36748 THOMASVILLE AL 08/17/93 ANDALUSIA HOSPITAL 849 S Three Notch Street 36420 ANDALUSIA AL 05/11/99 MEDICAL CENTER - ENTERPRISE 400 N Edwards Street 36330 ENTERPRISE AL 05/01/94 MONTGOMERY REGIONAL MED CTR 301 South Ripley Street 36104 MONTGOMERY AL 09/01/98 NORTHWEST MEDICAL CENTER Jackson Hwy. By-Pass 35653 RUSSELLVILLE AL 10/01/98 NORTHRIDGE MED CTR 124 S Memorial Dr 36067 PRATTVILLE AL 09/01/98 FOUR RIVERS MED CTR 1015 Medical Center Parkway 36701 SELMA AL 09/01/98 DOCTORS HOSPITAL - MOBILE 1700 Center Street 36604 MOBILE AL 05/31/90 FLORENCE HOSPITAL 2111 Cloyd Boulevard 35630 FLORENCE AL 10/01/98 MEDICAL CENTER - SHOALS 201 Avalon Ave. 35661 MUSCLE SHOALS AL 10/01/98 MEDICAL CENTER - HUNTSVILLE 911 Big Cove Rd., S.E. 35801 HUNTSVILLE AL 03/23/94 CRESTWOOD - MED CTR HUNTSVILLE One Hospital Drive 35801 HUNTSVILLE AL 05/11/99 EAST MONTGOMERY MEDICAL CTR 404 Taylor Road 36117 MONTGOMERY AL 09/01/98 KNOLLWOOD PARK MEDICAL CENTER 5600 Girby Road 36690 MOBILE AL 05/31/90 ALASKA REGIONAL 2801 Debarr Road Pouch 8AH 99514 ANCHORAGE AK MEDICAL CENTER - PHOENIX 1947 East Thomas Rd 85016 PHOENIX AZ 05/11/99 EL DORADO MEDICAL CENTER 1400 North Wilmot Road 85712 TUCSON AZ 05/11/99 PARADISE VALLEY HOSPITAL 3929 E. Bell Road 85032 PHOENIX AZ 05/11/99 NORTHWEST HOSPITAL 6200 N. La Cholla Boulevard 85741 TUCSON AZ 05/11/99 SONORA DESERT PSYCHIATRIC 1920 W. Rudasill Rd. 85704 TUCSON AZ 06/12/92 PARADISE VALLEY PSYCHIATRIC 7100 East Mescal St 85254 PHOENIX AZ 05/11/99 MED CTR OF SOUTH ARKANSAS 700 West Grove 71731 EL DORADO AR 05/11/99 MEDICAL PARK HOSPITAL 2001 South Main Street 71801 HOPE AR 05/11/99 DEQUEEN REGIONAL MED CTR 1306 W. Collin Raye Boulevard 71832 DEQUEEN AR 05/11/99 DOCTORS HOSPITAL (LITTLE ROCK) 6101 Capitol Avenue 72205 LITTLE ROCK AR 02/01/98 RIVERSIDE COMMUNITY MEDICAL 4445 Magnolia Avenue 92501 RIVERSIDE CA BROTMAN MEDICAL CENTER 3828 Delmass Terrace 90231 CULVER CITY CA 05/31/89 ENCINO TARZANA REGIONAL 16237 Ventura Boulevard 91436 ENCINO CA 12/31/92 VALLEY MEDICAL CENTER 1688 East Main St 92021 EL CAJON CA 03/16/93 SAN JOSE MEDICAL CENTER 675 E. Santa Clara Street 95112 SAN JOSE CA SAN LEANDRO HOSPITAL 13855 E. 14th Street 94578 SAN LEANDRO CA 05/11/99 WESTSIDE HOSPITAL 910 S. Fairfax Ave. 90036 LOS ANGELES CA 07/01/96 HEALDSBURG GENERAL HOSPITAL 1375 University Avenue 78413 HEALDSBURG CA 11/16/98 HUMANA HOSPITAL - WESTMINSTER 200 Hospital Circle 92683 WESTMINSTER CA 11/10/92 GOOD SAMARITAN HOSPITAL 2425 Samaritan Drive 95124 SAN FRANCISCO CA PALM DRIVE HOSPITAL 501 Petaluma Avenue 95472 SEBASTOPOL CA 03/01/99 VISALIA COMMUNITY HOSPITAL 1633 S. Court St. 93277 VISALIA CA 08/31/94 GREEN HOSPITAL OF SCRIPPS CLINIC 10666 North Torrey Pines Road 92037 LA JOLLA CA 10/31/91 WEST ANAHEIM MED CTR 3033 W Orange Ave 92804 ANAHEIM CA 05/11/99 COMMUNITY - GARDENA 1246 West 155th Street 90247 GARDENA CA 12/31/91 UKIAH GENERAL HOSPITAL 1120 South Dora Street 95482 UKIAH CA 08/07/88 WEST HILLS REGIONAL MEDICAL CTR 7300 Medical Center Drive 91307 CANOGA PARK CA HUNTINGTON BEACH HOSPITAL 17772 Beach Boulevard 92647 HUNTINGTON BEACH CA 05/11/99 LOS ROBLES REGIONAL 215 West Janss Road 91360 THOUSAND OAKS CA LA HABRA COMMUNITY HOSPITAL 1251 W Lambert Rd 90631 LA HABRA CA 03/31/88 SAN CLEMENTE HOSPITAL 654 Camino De Los Mares 92673 SAN CLEMENTE CA 05/15/98 CHINO VALLEY MED CTR 5451 Walnut Avenue 91710 CHINO CA WESTLAKE MEDICAL CENTER 32126 Agoura Road 91359 WESTLAKE VILLAGE CA 07/25/96 MISSION BAY HOSPITAL 3030 Bunker Hill Street 92109 SAN DIEGO CA 05/11/99 SOUTH VALLEY HOSPITAL 9400 No Name Uno 95020 GILROY CA 09/30/99 WOODVIEW-CALABASAS HOSPITAL 25100 Calabasas Rd. 91302 CALABASAS CA 03/31/93 LAS ENCINAS HOSPITAL 2900 E Del Mar Blvd 91107 PASADENA CA CEDAR VISTA PSYCHIATRIC 7171 North Cedar Avenue FRESNO CA 01/01/94 CANYON RIDGE HOSPITAL 5353 G Street CHINO CA 01/01/94 PRESBYTERIAN ST LUKES MED CTR 1719 E 19th Ave 80218 DENVER CO ROSE MEDICAL CENTER 4567 East Ninth Avenue 80220 DENVER CO SWEDISH MEDICAL CENTER 501 E. Hampden Avenue 80110 ENGLEWOOD CO NORTH SUBURBAN MEDICAL CTR 9191 Grant Street 80229 THORNTON CO AURORA MEDICAL CENTER 1501 S. Potomac WY 80012 AURORA CO 01/01/97 AURORA PRESBYTERIAN 900 Potomac 80011 AURORA CO

1 ATTACHMENT ONE HCA HOSPITALS TO WHICH COST REPORTING, PHYSICIAN KICKBACK AND PPS TRANSFER RELEASES APPLY (RELEASED LIABILITY RUNS ONLY THROUGH HCA SALE OR CLOSURE DATE)

MEDICARE PROVIDER DATE OF HCA FACILITY NUMBER SALE OR NAME (REDACTED) STREET ZIP CITY STATE CLOSURE - ----------------------------------------------------------------------------------------------------------------------------------- SPALDING REHABILITATION HOSPITAL 900 Potomac St 80011 AURORA CO ROCKY MOUNTAIN REHABILITATION 900 Potomac St 80011 AURORA CO 12/31/95 NORTH SUBURBAN REHABILITATION THORNTON CO COLUMBINE PSYCHIATRIC 8565 S. Poplar Way 80126 LITTLETON CO 09/01/96 BETHESDA PSYCHEALTH SYSTEM 4400 East Iliff Avenue 80222 DENVER CO 01/01/98 Aurora Presbyterian Transitional Care 1501 S. Potomac Street 80012 Aurora CO 12/29/98 Park Manor 1707 East 18th Street 80218 Denver CO ROCKFORD CENTER 100 Rockford Drive 19714 NEWARK DE 08/31/96 CEDARS MEDICAL CENTER 1400 NW 12th Avenue 33136 MIAMI FL TWIN CITIES HOSPITAL 2190 Highway 85 N 32578 NICEVILLE FL NORTH BEACH COMMUNITY 2835 North Ocean Boulevard 33308 FORT LAUDERDALE FL 03/31/90 MIAMI HEART INSTITUTE NORTH 250 63rd Street 33141 MIAMI FL 02/28/97 MIAMI HEART INSTITUTE SOUTH 4701 N. Meridan Avenue 33140 MIAMI FL COLUMBIA MED CTR - PENINSULA 264 S Atlantic Avenue 32176 ORMOND BEACH FL 11/11/99 JFK MEDICAL CENTER 5301 South Congress Avenue 33462 ATLANTIS FL KISSIMMEE MEMORIAL 200 Hilda St. 34742 KISSIMMEE FL 08/12/93 VICTORIA HOSPITAL 955 N.W. Third St. 33128 MIAMI FL 09/30/93 EAST POINTE HOSPITAL 1500 Lee Boulevard 33936 LEHIGH ACRES FL HAMILTON MEMORIAL HOSPITAL 506 NW 4th St 32052 JASPER FL 05/11/99 MEDICAL CENTER OF OSCEOLA 700 West Oak Street 34742 KISSIMMEE FL BARTOW MEMORIAL 1239 E Main St 33830 BARTOW FL 05/11/99 NORTH OSKALOOSA MEDICAL CENTER 151 Redstone Avenue, SE 32536 CRESTVIEW FL 03/15/96 SANTA ROSA MEDICAL CENTER 1450 Berry Mill Road 32570 MILTON FL 05/17/96 AVENTURA HOSPITAL & MEDICAL CTR 20900 Biscayne Boulevard 33180 AVENTURA FL NORTH GABLES HOSPITAL 5190 Southwest Eighth St. 33134 Coral Gables FL 01/07/92 LAKE CITY MEDICAL CENTER 1701 West Duval Street 32055 LAKE CITY FL MEDICAL CENTER OF SANFORD 1401 W Seminole Blvd 32771 SANFORD FL WINTER PARK MEMORIAL HOSPITAL 200 N. Lakemont 32792 WINTER PARK FL SARASOTA DOCTORS HOSPITAL 5731 Bee Ridge Road 34233 SARASOTA FL PLANTATION GENERAL HOSPITAL 401 N.W. 42nd Avenue 33317 PLANTATION FL CLEARWATER COMMUNITY 1521 East Druid Road 34616 CLEARWATER FL 02/08/99 MEMORIAL HOSP. OF JACKSONVILLE 3625 University Blvd South 32216 JACKSONVILLE FL ST. PETERSBURG MEDICAL CENTER 6500 38 Ave N 33710 ST PETERSBURG FL HUMANA HOSPITAL - SUN BAY 3030 Sixth St. S 33705 ST. PETERSBURG FL 12/20/90 NORTHWEST REGIONAL HOSPITAL 2801 North State Road # 7 33063 MARGATE FL NEW PORT RICHEY HOSPITAL 5637 Marine Parkway 34652 NEW PORT RICHEY FL HUMANA HOSPITAL-SOUTH BROWARD 5100 W Hallandale Beach Blvd 33023 HOLLYWOOD FL 10/15/91 SPECIALTY HOSPITAL - JACKSONVILLE 4901 Richard Street 32207 JACKSONVILLE FL POMPANO BEACH MEDICAL CTR 600 S.W. Third St. 33060 POMPANO BEACH FL 12/17/98 SEMINOLE HOSPITAL 9675 Seminole Blvd. 34642 SEMINOLE FL 03/17/96 NORTH FLORIDA REGIONAL MED CTR 6500 Newberry Road 32605 GAINESVILLE FL PALM BEACH REGIONAL 2829 Tenth Ave. N LAKE WORTH FL 11/30/96 DEERING HOSPITAL 9333 S.W. 152nd Street 33157 MIAMI FL KENDALL REGIONAL MEDICAL CTR 11750 Bird Road 33175 MIAMI FL DADE CITY HOSPITAL 13100 Fort King Road 33525 DADE CITY FL OCALA REGIONAL MEDICAL CENTER 1431 SW First Street 32671 OCALA FL BLAKE MEDICAL CENTER 2020 59th Street West 34209 BRADENTON FL SEBASTIAN HOSPITAL 13695 U S Highway 1 32958 SEBASTIAN FL 09/01/93 ST. AUGUSTINE HOSPITAL U.S. Highway One South 32086 ST. AUGUSTINE FL 10/31/91 SOUTHWEST FLORIDA REG CTR 2727 Winkler Avenue 33901 FORT MYERS FL PARK MEDICAL CENTER 818 S Main Lane 32801 ORLANDO FL 07/01/99 FORT WALTON BEACH MED CTR 1000 Mar-Walt Drive 32547 FORT WALTON BEACH FL UNIVERSITY HOSPITAL & MED CTR 7201 N. University Drive 33321 TAMARAC FL ORANGE PARK MEDICAL CENTER 2001 Kingsley Avenue 32073 ORANGE PARK FL HUMANA WOMEN'S HOSPITAL 3030 W. Buffalo Ave. 33607 TAMPA FL 02/28/93

2 ATTACHMENT ONE HCA HOSPITALS TO WHICH COST REPORTING, PHYSICIAN KICKBACK AND PPS TRANSFER RELEASES APPLY (RELEASED LIABILITY RUNS ONLY THROUGH HCA SALE OR CLOSURE DATE)

MEDICARE PROVIDER DATE OF HCA FACILITY NUMBER SALE OR NAME (REDACTED) STREET ZIP CITY STATE CLOSURE - ----------------------------------------------------------------------------------------------------------------------------------- WESTSIDE REGIONAL MED CTR 8201 W. Broward 33324 PLANTATION FL MEDICAL CENTER OF DAYTONA 400 North Clyde Morris Boulevard 32114 DAYTONA BEACH FL 11/12/99 PEMBROKE PINES HOSPITAL 2301 N University Drive 33024 PEMBROKE PINES FL 07/01/95 WEST FLORIDA REGIONAL MED CTR 8383 North Davis Highway 32523 PENSACOLA FL PUTNAM MEDICAL CENTER Highway 20 W Drawer 778 32177 PALATKA FL COLUMBIA - PALM BEACH - HOSPITAL 2201 45th Street 33407 WEST PALM BEACH FL UNIVERSITY GENERAL HOSPITAL 10200 Seminole Boulevard 34642 SEMINOLE FL 05/16/97 FAWCETT MEMORIAL 21298 Olean Blvd. 33952 PORT CHARLOTTE FL NORTHSIDE MEDICAL CENTER 6000 49th Street North 33709 ST PETERSBURG FL EDWARD WHITE HOSPITAL 2323 9th Avenue North 33713 ST PETERSBURG FL GULF COAST COMMUNITY HOSPITAL 449 West 23 Street 32405 PANAMA CITY FL BRANDON REGIONAL MED CTR 119 Oakfield Drive 33511 BRANDON FL LAWNWOOD REGIONAL MEDICAL 1700 S. 23rd Street 34954 FORT PIERCE FL LARGO MEDICAL CENTER 201 14 Street, S.W. 34649 LARGO FL RAULERSON HOSPITAL 1796 Highway 441 N 34973 OKEECHOBEE FL TALLAHASSEE COMMUNITY HOSPITAL 2626 Capital Medical Boulevard 32308 TALLAHASSEE FL REG MED CTR AT BAYONET POINT 14000 Fivay Road 34667 HUDSON FL SOUTH BAY HOSPITAL 4016 State Road 674 33570 SUN CITY CENTER FL MED CTR PORT ST. LUCIE 1800 SE Tiffany Avenue 34952 PORT SAINT LUCIE FL SOUTH SEMINOLE COMMUNITY 555 West State Road 434 32750 LONGWOOD FL 11/30/97 OAK HILL REGIONAL MEDICAL CENTER 11375 Cortez Blvd Box 5300 34606 SPRING HILL FL ENGLEWOOD COMMUNITY 700 Medical Boulevard 34223 ENGLEWOOD FL PALMS WEST HOSPITAL 13001 State Road 80 33470 LOXAHATCHEE FL DESTIN HOSPITAL 996 Airport Rd. 32541 DESTIN FL 08/31/94 GULF COAST HOSPITAL 13681 Doctor's Way 33912 FORT MYERS FL HIGHLAND PARK GENERAL HOSP 1660 NW 7th Court 33136 Miami FL 05/31/88 WEST LAKE HOSPITAL 589 W. State Rd. 434 32750 LONGWOOD FL 07/31/93 UNIVERSITY OF SOUTH FLORIDA 3515 E Fletcher Ave 33613 TAMPA FL 02/19/93 UNIVERSITY PAVILION 7201 North University Drive 33321 TAMARAC FL 01/01/95 Behavioral Health Center 11100 Northwest 27th Street 33172 Miami FL 09/02/99 Gulf Coast Hospital - SNU 13681 Doctor's Way 33912 FORT MYERS FL Columbia Homecare - HHA 4012 Gunn Highway, Suite 200 33624 Tampa FL Columbia Homecare - HHA 259 U.S. Highway 27, North 33870 Sebring FL 11/07/98 PEACHTREE REGIONAL HOSPITAL 60 Hospital Road 30263 NEWNAN GA CARTERSVILLE MEDICAL CENTER 960 Joe Frank Harris Parkway 30120 CARTERSVILLE GA NORTHLAKE REGIONAL MED CTR 1455 Montreal Road 30084 TUCKER GA BARROW MEDICAL CENTER 316 North Broad Street 30680 WINDER GA 05/11/99 MURRAY MEDICAL CENTER 707 Ellijay Road 30705 CHATSWORTH GA 03/06/98 POLK GENERAL 424 N Main St 30125 CEDARTOWN GA FAIRVIEW PARK 200 Industrial Boulevard 31021 DUBLIN GA WORTH COMMUNITY HOSPITAL 807 S. Isabella Street 31791 SYLVESTER GA 03/31/88 PALMYRA MEDICAL CENTER 2000 Palmyra Road 31701 ALBANY GA COLISEUM MEDICAL CENTER 350 Hospital Drive 31217 MACON GA MIDDLE GEORGIA HOSPITAL 888 Pine Street 31297 MACON GA 12/31/99 REDMOND REGIONAL MED CTR 501 Redmond Road 30165 ROME GA METROPOLITAN HOSPITAL 3223 Howell Mill Road NW 30327 ATLANTA GA WEST PACES MEDICAL CENTER 3200 Howell Mill Road NW 30327 ATLANTA GA 02/10/99 DUNWOODY MEDICAL CENTER 4575 N Shallowford Rd 30338 ATLANTA GA AUGUSTA HOSPITAL 3651 Wheeler Road 30909 AUGUSTA GA PARKWAY MEDICAL CENTER 1000 Thornton Road 30122 LITHIA SPRINGS GA DOCTORS HOSPITAL - COLUMBUS 616 19th Street 31901 COLUMBUS GA LANIER PARK HOSPITAL 675 White Sulpher Road 30501 GAINESVILLE GA EASTSIDE MEDICAL CENTER 1700 Medical Way 30078 SNELLVILLE GA HUGHSTON SPORTS MEDICINE HOSP 100 Frist Court 31909 COLUMBUS GA MACON NORTHSIDE HOSPITAL 400 Charter Box 4627 31210 MACON GA WHEELER COUNTY HOSPITAL Third Street Box 398 30428 GLENWOOD GA 06/30/94 COLISEUM PSYCHIATRIC HOSPITAL 340 Hospital Dr Box 9366 31201 MACON GA

3 ATTACHMENT ONE HCA HOSPITALS TO WHICH COST REPORTING, PHYSICIAN KICKBACK AND PPS TRANSFER RELEASES APPLY (RELEASED LIABILITY RUNS ONLY THROUGH HCA SALE OR CLOSURE DATE)

MEDICARE PROVIDER DATE OF HCA FACILITY NUMBER SALE OR NAME (REDACTED) STREET ZIP CITY STATE CLOSURE - ----------------------------------------------------------------------------------------------------------------------------------- Amedysi HH of Georgia (Northlake) 9144 HWY. 278 East 30014 COVINGTON GA 11/30/98 WEST VALLEY MEDICAL CENTER 1717 Arlington Avenue 83605 CALDWELL ID EASTERN IDAHO REGIONAL MED 3100 Channing Way 83404 IDAHO FALLS ID WALKER CENTER 1120A Montana Street 83330 GOODING ID 08/30/91 MOUNTAIN RIVER 2280 East 25th Street 83401 IDAHO FALLS ID 01/13/89 LAGRANGE MEMORIAL 5101 S. Willow Springs Road 60525 LA GRANGE IL 02/01/99 MICHAEL REESE 2929 South Ellis Avenue 60616 CHICAGO IL 11/12/98 CHICAGO OSTEOPATHIC 5200 South Ellis Avenue 60615 CHICAGO IL GRANT HOSPITAL 550 W Webster Ave 60614 CHICAGO IL 11/12/98 HUMANA HOSPITAL - SPRINGFIELD 5230 South 6th Street 62794 SPRINGFIELD IL 08/31/88 HOFFMAN ESTATES MEDICAL CENTER 1555 North Barrington Road 60194 HOFFMAN ESTATES IL 02/01/99 CHICAGO LAKESHORE 4840 N Marine Dr 60640 CHICAGO IL RIVEREDGE HOSPITAL 8311 West Roosevelt Road 60130 FOREST PARK IL BARCLAY HOSPITAL 4700 North Clarendon Avenue 60640 CHICAGO IL 02/01/97 WOODLAND HOSPITAL 1650 Moon Lake Blvd 60194 HOFFMAN ESTATES IL 02/01/99 TERRE HAUTE REGIONAL 3901 South 7th Street 47802 TERRE HAUTE IN NORTH CLARK COMMUNITY 2200 Market Street 47111 CHARLESTOWN IN 12/31/91 WOMENS HOSPITAL - INDIANAPOLIS 8111 Township Line Road 46260 INDIANAPOLIS IN WESLEY MEDICAL CENTER 550 North Hillside 67214 WICHITA KS HALSTEAD HOSPITAL 328 Poplar Street 67056 HALSTEAD KS 05/11/99 BETHANY MEDICAL CENTER 51 North 12th Street 66102 KANSAS CITY KS 12/04/98 WESTERN PLAINS REGIONAL HOSP 3001 Avenue A 67801 DODGE CITY KS 05/11/99 OVERLAND PARK REGIONAL MED CTR 10500 Quivira Avenue 66215 OVERLAND PARK KS 12/31/98 COLUMBIA HOSPITAL LEXINGTON 310 Limestone Street 40508 LEXINGTON KY AUDUBON REG MED CENTER One Audubon Plaza 40217 LOUISVILLE KY 09/01/98 MEADOWVIEW REGIONAL MED CTR 989 West Highway 10 41056 MAYSVILLE KY 05/11/99 SPRING VIEW HOSPITAL St. Mary Road 40333 LEBANON KY 09/01/98 BOURBON GENERAL 9 Linville Drive 40361 PARIS KY 05/11/99 LOGAN MEMORIAL HOSPITAL 1625 S. Nashville Road 42276 RUSSELLVILLE KY 05/11/99 GEORGETOWN (KY) 1140 Lexington Road 40324 GEORGETOWN KY 05/11/99 PINE LAKE REGIONAL 1099 Medical Center Circle 42066 MAYFIELD KY 05/11/99 VALLEY VIEW MEDICAL CENTER 4604 US Hwy 60 West 42437 MORGANFIELD KY 09/01/87 SUBURBAN MEDICAL CENTER 4001 Dutchmans Lane 40207 LOUISVILLE KY 09/01/98 GREENVIEW REGIONAL HOSPITAL 1801 Ashley Circle 42104 BOWLING GREEN KY HOSPITAL FRANKFORT 299 Kings Daughters Drive 40601 FRANKFORT KY THREE RIVERS HOSPITAL Highway 644 PO Box 769 41230 LOUISA KY 05/28/93 LAKE CUMBERLAND REGIONAL 305 Langdon Street 42503 SOMERSET KY 05/11/99 SOUTHWEST HOSPITAL 9820 Third St Rd 40272 LOUISVILLE KY 09/01/98 UNIVERSITY OF LOUISVILLE 530 S. Jackson St. 40202 LOUISVILLE KY 02/06/96 TRI-COUNTY COMMUNITY HOSPITAL 1025 New Moody Lane 40031 LOUISVILLE KY 09/30/92 Home Care of Louisville 100 Mallard Creek Road, Suite 200 40207 LOUISVILLE KY 10/16/98 DAUTERIVE HOSPITAL 600 N. Lewis 70560 NEW IBERIA LA SAVOY MEDICAL CENTER 801 Poinciana Avenue 70554 MAMOU LA RAPIDES REGIONAL MEDICAL CENTER 211 Fourth Street 71301 ALEXANDRIA LA SPRINGHILL MEDICAL CENTER 2001 Humana Dr 71075 SPRINGHILL LA 05/11/99 WINN PARISH MEDICAL CENTER 301 W. Boundary Street 71483 WINNFIELD LA ELWOOD MEDICAL CENTER 1221 S. Clearview Parkway 70121 JEFFERSON LA 12/31/96 AVOYELLES HOSPITAL Highway 1192 Bluetown Road 71351 MARKSVILLE LA OAKDALE COMMUNITY 130 N. Hospital Drive 71463 OAKDALE LA HIGHLAND HOSPITAL 1453 E. Bert Kouns Ind 71105 SHREVEPORT LA 09/30/99 VILLE PLATTE MEDICAL CENTER 800 E Main 70586 VILLE PLATTE LA 09/01/96 TULANE UNIVERSITY MED CTR 1415 Tulane Avenue 70112 NEW ORLEANS LA LAKEVIEW MEDICAL CENTER 95 East Fairway Drive 70433 COVINGTON LA LAKESIDE HOSPITAL 4700 I-10 Service Road W 70001 METAIRIE LA DOCTORS HOSPITAL - OPELOUSAS 5101 Hwy 67 South 70570 OPELOUSAS LA 06/01/99 WOMEN'S & CHILDREN'S HOSPITAL 4600 Ambassador Caffery Parkway 70508 LAFAYETTE LA NORTH MONROE HOSPITAL 3421 Medical Park Drive 71203 MONROE LA WESTPARK HOSPITAL 1900 S. Morrison Blvd 70403 HAMMOND LA 01/08/93

4 ATTACHMENT ONE HCA HOSPITALS TO WHICH COST REPORTING, PHYSICIAN KICKBACK AND PPS TRANSFER RELEASES APPLY (RELEASED LIABILITY RUNS ONLY THROUGH HCA SALE OR CLOSURE DATE)

MEDICARE PROVIDER DATE OF HCA FACILITY NUMBER SALE OR NAME (REDACTED) STREET ZIP CITY STATE CLOSURE - ----------------------------------------------------------------------------------------------------------------------------------- LAKELAND MEDICAL CENTER 6000 Bullard Road 70128 NEW ORLEANS LA WOMEN & CHILDREN'S 4200 Nelson Road 70605 LAKE CHARLES LA 05/11/99 MEDICAL CENTER OF BATON ROUGE 17000 Medical Ctr Dr 70816 BATON ROUGE LA 10/01/98 MEDICAL CENTER OF SW LOUISIANA 3125 CANAL ST 70112 LAFAYETTE LA RIVERVIEW MEDICAL CENTER 1125 West LA Highway 30 70737 GONZALES LA 05/11/99 DEPAUL HOSPITAL 1040 Calhoun St. 70118 NEW ORLEANS LA 01/01/97 HUMANA HOSPITAL - BRENTWOOD 1800 Irving Pl. 71101 SHREVEPORT LA 09/11/90 CYPRESS HOSPITAL 302 Dulles Dr. 70506 LAFAYETTE LA 07/01/95 PARKLAND MEDICAL CENTER 2414 Bunker Hill Dr. 70808 BATON ROGUE LA 10/30/92 DEPAUL NORTHSHORE HOSPITAL De Paul Northshore Dr. 70434 COVINGTON LA 02/07/92 METROWEST MEDICAL CENTER 280 Irving Street 01701 Framingham MA 03/15/99 VICKSBURG MEDICAL CENTER 1111 North Frontage Road 39180 VICKSBURG MS 11/01/98 NATCHEZ COMMUNITY 129 Jeff Davis Blvd Box 1203 39120 NATCHEZ MS 09/01/93 GARDEN PARK HOSPITAL 1520 Broad Avenue 39501 GULFPORT MS DOCTORS HOSPITAL - SPRINGFIELD 2828 North National St. 65801 SPRINGFIELD MO 10/20/95 INDEPENDENCE REG HEALTH CTR 1509 W. Truman Road 64050 INDEPENDENCE MO 12/31/98 ST. PETERS HOSPITAL 10 Hospital Drive 63376 ST. PETERS MO 02/10/88 COLUMBIA HSPS NORTH & SOUTH 3535 South National Road 65807 SPRINGFIELD MO 08/01/98 RESEARCH PSYCHIATRIC CENTER 2323 E 63rd St 64130 KANSAS CITY MO 05/11/99 SUNRISE HOSPITAL & MED CTR 3186 S. Maryland Parkway 89109 LAS VEGAS NV SUNRISE MOUNTAIN VIEW HOSP 3100 N. Tenaya Way 89128 LAS VEGAS NV TRUCKEE MEADOWS HOSPITAL 1240 E. 9th Street 89512 Reno NV 07/01/93 MONTE VISTA HOSPITAL 5900 W. Rochelle 89103 LAS VEGAS NV 07/01/93 PINEBROOK CENTER 2100 E. Rancho Dr. 89520 Reno NV 05/01/90 PARKLAND MEDICAL CENTER One Parkland Drive 03038 DERRY NH PORTSMOUTH REGIONAL HOSPITAL 333 Borthwick Avenue 03801 PORTSMOUTH NH LOVELACE MEDICAL CENTER 5400 Gibson Blvd SE 87108 ALBUQUERQUE NM 03/31/90 MEDICAL CENTER - CARLSBAD 2340 W Pierce 88220 CARLSBAD NM 05/11/99 LEA REGIONAL HOSPITAL 5419 Lovington Highway 88240 HOBBS NM 05/11/99 HEIGHTS PSYCHIATRIC HOSPITAL 103 Hospital Loop NE 87109 ALBUQUERQUE NM 05/31/95 Charlotte Eye, Ear, and Throat Hospital 1600 E. Third Street 28204 CHARLOTTE NC 05/31/87 RALEIGH COMMUNITY HOSPITAL 3400 Wake Forest Road 27609 RALEIGH NC 09/15/98 CAPE FEAR MEMORIAL 5301 Wrightsville Avenue 28403 WILMINGTON NC 11/01/98 HERITAGE MEMORIAL 111 Hospital Drive 27866 TARBORO NC 10/01/98 DAVIS MEDICAL CENTER 218 Old Mocksville Road 28625 STATESVILLE NC 11/19/98 PRESBYTERIAN ORTHOPEDIC HOSP 1901 Randolph Road 28207 CHARLOTTE NC 08/01/98 HUMANA HOSPITAL - GREENSBORO 1200 N. Elm St. 27401 GREENSBORO NC 06/01/88 BRUNSWICK HOSPITAL 1 Medical Center Drive 28462 SUPPLY NC HIGHSMITH-RAINEY MEMORIAL HOSP 150 Robeson Street 28301 FAYETTEVILLE NC 05/31/99 HOLLY HILL HOSPITAL 3019 Falstaff Rd 27610 WAKE FOREST NC 06/30/95 ST VINCENT CHARITY HOSPITAL 2351 E 22nd St 44115 CLEVELAND OH 06/12/99 ST. LUKE'S MEDICAL CENTER 11311 Shaker Blvd 44104 CLEVELAND OH 06/12/99 MERCY MEDICAL CENTER 1320 Mercy Drive NW 44708 CANTON OH 06/12/99 ST. JOHN WEST SHORE HOSPITAL 29000 Center Ridge 44145 WESTLAKE OH 06/12/99 ST. MARY'S MEDICAL CENTER 305 South 5th Street, P O Box 232 73702 ENID OK 09/30/95 CLAREMORE REGIONAL HOSPITAL 1202 Muskogee Street 74017 CLAREMORE OK 05/11/99 TULSA REGIONAL MEDICAL CENTER 744 West 9th Street 74127 TULSA OK 12/31/98 PRESBYTERIAN HOSPITAL 700 N.E. 13th Street 73104 OKLAHOMA CITY OK SOUTHWESTERN MEDICAL 5602 SW Lee Boulevard 73506 LAWTON OK DOCTORS HOSPITAL - TULSA 2323 S. Harvard Ave. 74114 TULSA OK 12/31/98 EDMOND REGIONAL MED CTR One South Bryant 73034 EDMOND OK BETHANY HEALTH CENTER 51 North 12th Street 66102 BETHANY OK 04/01/98 WAGONER COMMUNITY HOSPITAL 1200 West Cherokee 74467 WAGONER OK 05/11/99 SEILING HOSPITAL US Highway 60 Northeast 73663 SEILING OK 03/25/88 SEMINOLE MEDICAL CENTER 2401 Wrangler Boulevard 74686 SEMINOLE OK SPECIALTY HOSPITAL - TULSA 2408 East 81St Street, Floors 24 & 25 74137 TULSA OK 12/11/98 REHABILITATION INSTITUTE - OK 700 NW 7TH Street 73102 OKLAHOMA CITY OK 06/07/88 SPECIALTY HOSPITAL - TULSA 2408 East 81St Street, Floors 24 & 25 74137 TULSA OK 08/31/94 DOUGLAS MEDICAL CENTER 738 West Harvard Boulevard 97470 ROSEBURG OR 05/11/99 WILLAMETTE VALLEY MED CTR 2700 Three Mile Lane 97128 MCMINNVILLE OR 05/11/99 PROVIDENCE HOSPITAL 2435 Forrest Drive 29204 COLUMBIA SC COLLETON REGIONAL HOSPITAL 501 Robertson Boulevard 29488 WALTERBORO SC

5 ATTACHMENT ONE HCA HOSPITALS TO WHICH COST REPORTING, PHYSICIAN KICKBACK AND PPS TRANSFER RELEASES APPLY (RELEASED LIABILITY RUNS ONLY THROUGH HCA SALE OR CLOSURE DATE)

MEDICARE PROVIDER DATE OF HCA FACILITY NUMBER SALE OR NAME (REDACTED) STREET ZIP CITY STATE CLOSURE - ----------------------------------------------------------------------------------------------------------------------------------- MARLBORO PARK 204 N. Marlboro Street 29512 BENNETTSVILLE SC 05/01/95 CHESTERFIELD GENERAL Highway 9 Box 151 29520 CHERAW SC 05/01/95 DOCTORS HOSPITAL - SPARTANBURG 389 Serpentine Dr. 29303 SPARTANBURG SC 07/31/94 TRIDENT MEDICAL CENTER 9330 Medical Plaza Drive 29406 CHARLESTON SC AIKEN REGIONAL MEDICAL CENTER 202 University Parkway 29801 AIKEN SC 07/07/95 GRAND STRAND REGIONAL MED CTR 809 82nd Parkway 29572 MYRTLE BEACH SC AURORA PAVILION P.O. Box 1073 29802 AIKEN SC 07/31/93 NASHVILLE MEMORIAL HOSPITAL 612 West Due West Avenue 37115 MADISON TN SYCAMORE SHOALS HOSPITAL 1501 West Elk Avenue 37643 ELIZABETHTON TN 09/01/98 HILLSIDE HOSPITAL 1265 E College Street 38478 PULASKI TN 05/11/99 EDGEFIELD HOSPITAL 610 Gallatin Road 37206 NASHVILLE TN 08/31/90 HORIZON MEDICAL CENTER 111 Highway 70 E 37055 DICKSON TN SOUTHERN TENNESSEE MEDICAL 185 Hospital Road 37398 WINCHESTER TN 05/11/99 VOLUNTEER GENERAL HOSPITAL 161 Mount Pelia Rd 38237 MARTIN TN 06/01/98 SOUTH PITTSBURG HOSPITAL 210 W. 12th Street 37380 SOUTH PITTSBURG TN LAKEWAY REGIONAL 726 McFarland St 37814 MORRISTOWN TN 05/28/93 ATHENS COMMUNITY 1114 West Madison 37371 ATHENS TN NORTH PARK 2051 Hamil Road 37343 HIXSON TN 05/01/88 JOHNSON CITY SPECIALTY HOSPITAL 203 E. Watauga Avenue 37601 JOHNSON CITY TN 08/31/98 HUMBOLDT CEDAR CREST 3525 Chere Carol Road 38343 HUMBOLDT TN 10/21/89 SMYRNA HOSPITAL Hwy. 41S. P.O. Box 306 37167 SMYRNA TN 02/20/88 HUMANA HOSPITAL - MCFARLAND 500 Park Ave. 37087 LEBANON TN 06/01/92 BENTON COMMUNITY Hospital Street 38320 CAMDEN TN 10/05/90 DEKALB GENERAL W. Main Street 37166 SMITHVILLE TN 07/31/92 TRINITY HOSPITAL 353 Main Street 37061 ERIN TN 05/11/99 DONELSON HOSPITAL (SUMMIT) 5655 Frist Blvd 37076 HERMITAGE TN RIVER PARK HOSPITAL 1559 Sparta Road 37110 MCMINNVILLE TN PARKRIDGE MEDICAL CENTER 2333 McCallie Road 37404 CHATTANOOGA TN CENTENNIAL MEDICAL CENTER (Park View) 2300 Patterson Street 37203 NASHVILLE TN DIAGNOSTIC CENTER 2412 McCallie Ave 37404 CHATTANOOGA TN 10/14/88 WESTSIDE HOSPITAL 2208 Patterson St. 37203 NASHVILLE TN 07/01/89 PARK WEST MEDICAL CENTERS 9352 Park West Blvd 37919 Knoxville TN 08/24/90 HAYWOOD PARK HOSPITAL 2545 N Washington Ave 38012 BROWNSVILLE TN 04/01/88 CROCKETT HOSPITAL U.S. Highway 43 South 38464 LAWRENCEBURG TN 05/11/99 INDIAN PATH MEDICAL CENTER 2000 Brookside Road 37660 KINGSPORT TN 08/31/98 EAST RIDGE HOSPITAL 941 Spring Creek Road 37412 EAST RIDGE TN 06/07/96 NORTH SIDE HOSPITAL 401 Princeton Road 37601 JOHNSON CITY TN 09/01/98 SMITH COUNTY MEMORIAL 158 Hospital Drive 37030 CARTHAGE TN 05/11/99 LIVINGSTON REGIONAL 315 Oak Street 38570 LIVINGSTON TN 05/11/99 REGIONAL HOSPITAL OF JACKSON 367 Hospital Boulevard 38303 JACKSON TN 06/01/98 HENDERSONVILLE HOSPITAL 355 New Shackle Island Road 37075 HENDERSONSVILLE TN SOUTHERN HILLS MEDICAL CENTER 391 Wallace Road 37211 NASHVILLE TN STONES RIVER HOSPITAL Route 1, Dolittle Road 37190 WOODBURY TN 10/05/99 CHEATAM MEDICAL CENTER 313 North Main Street 37015 Ashland City TN WHITWELL MEDICAL CENTER 101 N. Maple Street 37397 WHITWELL TN 10/17/97 Northeast Tennessee Rehab 400 State of Franklin Road 37604 Johnson City TN 08/31/98 VALLEY PSYCHIATRIC HOSPITAL Shallowford Rd. 37421 CHATTANOOGA TN 08/31/96 INDIAN PATH PAVILION 2300 Pavilion Dr. 37660 KINGSPORT TN 09/27/96 PSYCHIATRIC HOSP AT VANDERBILT 1601 23rd Avenue South 37220 NASHVILLE TN 04/30/99 GULF COAST HOSPITAL 2800 Garth Rd. 77521 BAYTOWN TX 09/01/92 ST. JOSEPH HOSPITAL 1401 South Main Street 76104 FORT WORTH TX 07/01/95 WESTBURY 5556 Gasmer Rd. 77035 HOUSTON TX 07/31/95 GILMER MEDICAL CENTER 712 N. Wood St. 75644 GILMER TX 10/28/95 SOUTHSIDE COMMUNITY 4626 Weber Rd. 78411 CORPUS CHRISTI TX 07/18/93 NORTH HILLS MEDICAL CENTER 4401 Booth Calloway Road 76180 NORTH RICHLAND HILLS TX MEDICAL CENTER DALLAS SW 2929 S Hampton Rd 75224 DALLAS TX BAYSHORE MEDICAL CENTER 4000 Spencer Highway 77504 PASADENA TX MEDICAL CENTER - PAMPA 1 Medical Plaza 79066 PAMPA TX 05/11/99 MEDICAL CENTER - WEST 1801 North Oregon 79902 EL PASO TX

6 ATTACHMENT ONE HCA HOSPITALS TO WHICH COST REPORTING, PHYSICIAN KICKBACK AND PPS TRANSFER RELEASES APPLY (RELEASED LIABILITY RUNS ONLY THROUGH HCA SALE OR CLOSURE DATE)

MEDICARE PROVIDER DATE OF HCA FACILITY NUMBER SALE OR NAME (REDACTED) STREET ZIP CITY STATE CLOSURE - ----------------------------------------------------------------------------------------------------------------------------------- HUMANA HOSPITAL - SOUTHMORE 906 E Southmore 77502 PASADENA TX 09/30/90 DOCTORS REGIONAL MED CTR 3315 South Alameda 78411 CORPUS CHRISTI TX 05/01/99 EAST HOUSTON MEDICAL CENTER 13111 East Freeway 77015 HOUSTON TX 08/31/98 NORTHWEST HOSPITAL - TEXAS 13725 Farm Rd 624, PO Box 9917 78469 CORPUS CHRISTI TX NORTHEAST COMMUNITY 1301 Airport Freeway 76021 BEDFORD TX 05/31/96 DETAR HOSPITAL 506 E. San Antonio 77902 VICTORIA TX 05/11/99 COLONIAL HOSPITAL 502 W College St 75160 TERRELL TX 12/31/92 CORPUS CHRISTI DOCTORS HOSPITAL 1502 Tarleton 78415 CORPUS CHRISTI TX 10/18/90 MAINLAND HOSPITAL 519 Ninth Ave. N. 77590 TEXAS CITY TX 08/31/93 GULF COAST MEDICAL CENTER 1400 HWY 59 Bypass 77488 WHARTON TX 05/11/99 CONROE REGIONAL MEDICAL CTR 504 Medical Center Blvd 77305 CONROE TX DOCTORS HOSPITAL - EAST LOOP 9339 North Loop East 77029 HOUSTON TX 02/29/96 MED CTR COLLEGE STATION 1604 Rock Prairie Road 77840 COLLEGE STATION TX 05/11/99 ROSEWOOD MEDICAL CENTER 9200 Westheimer Road 77063 HOUSTON TX SUNBELT REGIONAL MED CTR - EAST 15101 East Freeway 77530 CHANNELVILLE TX 08/31/88 SAN ANGELO COMMUNITY MED CTR 3501 Knickerbocker Rd 76904 SAN ANGELO TX 05/11/99 ALICE PHYS & SURGEONS HOSP 300 East Third Street 78332 ALICE TX 05/11/99 SAM HOUSTON MEMORIAL 1615 Hillendahl 77055 HOUSTON TX 07/01/94 SOUTHWEST TEXAS METHODIST 7700 Floyd Curl 78229 SAN ANTONIO TX MEDICAL CENTER - SHERMAN 1111 Gallagher Road 75090 SHERMAN TX 05/11/99 WYSONG MEDICAL CENTER 130 S. Central Expressway 75069 MCKINNEY TX 01/10/93 NORTH TEXAS MEDICAL CENTER 1800 North Graves Street 75069 MCKINNEY TX FLOW MEMORIAL HOSPITAL 1310 Scripture Street 76207 DENTON TX 09/26/88 BELLAIRE MEDICAL CENTER 5314 Dashwood Drive 77081 HOUSTON TX ST. DAVID'S MEDICAL CENTER 919 E. 32nd Street 78705 AUSTIN TX NAVARRO REGIONAL HOSPITAL 3201 West Highway 22 75110 CORSICANA TX 05/11/99 WOODLAND HEIGHTS MED CTR 500 Gaslight Boulevard 75904 LUFKIN TX 05/11/99 DIAGNOSTIC CENTER HOSPITAL 6447 Main Street 77030 HOUSTON TX 08/31/93 MAINLAND MEDICAL CENTER 6801 EF Lowry Expressway 77591 TEXAS CITY TX HUMANA HOSPITAL - BAYTOWN 1700 James Bowie Drive Box 1451 77520 BAYTOWN TX 12/11/90 ALVIN MEDICAL CENTER 301 Medic Lane 77511 ALVIN TX 01/01/97 NORTH HOUSTON MEDICAL CENTER 232 West Parker Road 77076 HOUSTON TX 07/22/99 HEIGHTS HOSPITAL 1917 Ashland St. 77008 HOUSTON TX 08/31/94 NORTH HOUSTON MEDICAL CENTER 5815 Airline Drive 77076 AIRLINE TX 08/31/96 ABILENE REGIONAL MEDICAL CENTER 6250 HWY 83-84 AT Antilley Road 79606 ABILENE TX 05/01/94 SILSBEE DOCTORS HOSPITAL Highway 418 West 77656 SILSBEE TX 05/11/99 BROWNWOOD REGIONAL MED CTR 1501 Burnet Drive 76801 BROWNWOOD TX 05/11/99 NORTH BAY HOSPITAL 1711 West Wheeler Avenue 78336 ARKANSAS PASS TX CLEAR LAKE REG MED CENTER 500 Medical Center Boulevard 77598 WEBSTER TX SPRING BRANCH MEDICAL CENTER 8850 Long Point Road 77055 HOUSTON TX SAN ANTONIO REGIONAL HOSPITAL 8026 Floyd Curl 78229 SAN ANTONIO TX METROPOLITAN METHODIST HOSP 1310 McCollough Avenue 78212 SAN ANTONIO TX 07/01/99 MEDICAL CENTER - DENTON 4405 N Interstate 35 76207 DENTON TX DOCTORS HOSPITAL - CONROE 3205 West Davis 77035 CONROE TX 06/16/95 DOCTORS HOSPITAL - LAREDO 500 E Mann Rd 78041 LAREDO TX 05/11/99 WEST HOUSTON MEDICAL CENTER 12141 Richmond Avenue 77082 HOUSTON TX MEDICAL CENTER - EAST 10301 Gateway West 79925 EL PASO TX MEDICAL CITY DALLAS 7777 Forest Lane 75230 DALLAS TX MEDICAL CENTER - PLANO 3901 W 15Th St 75075 PLANO TX MEDICAL CENTER HOSPITAL DEL ORO 8081 Green Briar 77054 HOUSTON TX 08/18/95 VALLEY REGIONAL MEDICAL CENTER 1 Ted Hunt Boulevard 78521 BROWNSVILLE TX BEAUMONT MEDICAL CENTER 3080 College Street 77701 BEAUMONT TX 05/11/99 MEDICAL CENTER - LEWISVILLE 500 West Main Street 75057 LEWISVILLE TX PLAZA MEDICAL CENTER - FT. WORTH 900 Eighth Avenue 76104 FORT WORTH TX WOMENS HOSPITAL - TEXAS 7600 Fannin Street 77054 HOUSTON TX MEDICAL CENTER - ARLINGTON 3301 Matlock Road 76015 ARLINGTON TX MEDICAL CENTER - TERRELL 1551 HWY 34 S 75160 TERRELL TX 05/11/99 EL CAMPO MEMORIAL HOSPITAL 303 Sandy Corner Road 77437 EL CAMPO TX 01/31/96

7 ATTACHMENT ONE HCA HOSPITALS TO WHICH COST REPORTING, PHYSICIAN KICKBACK AND PPS TRANSFER RELEASES APPLY (RELEASED LIABILITY RUNS ONLY THROUGH HCA SALE OR CLOSURE DATE)

MEDICARE PROVIDER DATE OF HCA FACILITY NUMBER SALE OR NAME (REDACTED) STREET ZIP CITY STATE CLOSURE - ----------------------------------------------------------------------------------------------------------------------------------- MEDICAL ARTS HOSPITAL - WEBSTER 6161 Harry Hines Boulevard 75235 WEBSTER TX 03/13/98 LONGVIEW REGIONAL HOSPITAL 2901 N 4th Street 75605 LONGVIEW TX 05/11/99 MEDICAL ARTS HOSP - TEXARKANA 2501 College Dr. 75501 TEXARKANA TX 12/31/97 KATY MEDICAL CENTER 5602 Medical Center Drive 77494 KATY TX 10/01/99 RIO GRANDE REGIONAL HOSPITAL 101 East Ridge Road 78503 MCALLEN TX ST. DAVID'S SOUTH HOSPITAL 901 West Ben White Blvd 78704 AUSTIN TX MEDICAL CENTER - LANCASTER 2600 W Pleasant Run Rd 75146 LANCASTER TX FORT BEND MEDICAL CENTER 3803 F M 1092 at HWY 6 77459 MISSOURI CITY TX 10/01/99 ST. DAVID'S HOSP ROUND ROCK 2400 Round Rock Ave 78681 ROUND ROCK TX MANSFIELD HOSPITAL 1802 Highway 157 North 76063 MANSFIELD TX 12/21/89 WOMENS & CHILDREN'S HOSPITAL 8109 Fredericksburg Road 78229 SAN ANTONIO TX 01/01/97 NORTHEAST METHODIST HOSPITAL 12412 Judson Road 78233 SAN ANTONIO TX DENTON COMMUNITY 207 N Bonnie Brae 76201 DENTON TX 11/13/96 TOPS SURGICAL SPECIALTY HOSPITAL 17080 Red Oak Dr Box 73409 77090 HOUSTON TX 07/01/99 KINGWOOD MEDICAL CENTER 22999 US HWY 59 North 77339 KINGWOOD TX METHODIST AMBULATORY SURGICAL 9150 Huebner Rd Suite 900 78240 SAN ANTONIO TX SURGICARE SPECIALTY HOSPITAL 718 Elizabeth St 78404 CORPUS CHRISTI TX BAY AREA MEDICAL CENTER 7101 S. Padre Island Drive 78412 CORPUS CHRISTI TX 05/01/99 PANHANDLE SURGICAL HOSPITAL 7100 West 9th Ave 79106 AMARILLO TX 05/11/99 TEXAS ORTHOPEDIC HOSPITAL 7401 S Main 77030 HOUSTON TX AUSTIN DIAGNOSTIC MEDICAL CTR 12221 Mopac Expressway North 78758 AUSTIN TX MEDICAL CENTER - LAS COLINAS 6800 N. MacArthur Blvd 75039 Irving TX SPECIALTY HOSPITAL OF HOUSTON 5556 Gasmer 77035 HOUSTON TX 04/05/95 SPECIALTY HOSP OF MEDICAL ARTS 6161 Harry Hines Blvd 75235 DALLAS TX 03/13/98 REHABILITATION HOSPITAL SOUTH TX 6226 Saratoga Blvd 78414 CORPUS CHRISTI TX ST. DAVID'S REHABILITATION 1005 E 32nd St 78705 AUSTIN TX SPECIALTY HOSPITAL OF AUSTIN 4207 Burnet Road 78756 AUSTIN TX 03/01/95 CHAMPIONS TREATMENT CENTER 14320 Walters Road 77014 HOUSTON TX 06/15/97 BEAUMONT MEDICAL & SURGICAL 3250 Fannin St. 77701 BEAUMONT TX 01/01/95 BELLE PARK HOSPITAL 4427 Belle Park Dr. 77072 HOUSTON TX 08/27/93 GREENLEAF PSYCHIATRIC 2000 Greens Prarie Rd 77845 COLLEGE STATION TX 04/19/93 RED RIVER HOSPITAL 1505 8th St 76301 WICHITA FALLS TX 10/01/93 HOUSTON INTERNATIONAL HOSPITAL 6441 Main St. 77030 HOUSTON TX 11/30/90 SUN VALLEY REGIONAL HOSPITAL 1155 Idaho St. 79902 EL PASO TX 08/30/92 SHOAL CREEK HOSPITAL 3501 Mills Avenue 78731 Austin TX 07/01/93 BRAZOS CENTER FOR PSYCHIATRY 301 Londonberry Dr 76702 WACO TX 12/21/92 BAYVIEW PSYCHIATRIC CENTER 6226 Saratoga Blvd 78414 CORPUS CHRISTI TX 05/01/99 GULF PINES PSYCHIATRIC HOSPITAL 205 Hollow Tree Lane 77090 HOUSTON TX 10/01/93 HILL COUNTRY HOSPITAL 8205 Palisades Dr. 78233 SAN ANTONIO TX 03/01/92 RICHLAND HOSPITAL 7501 Glenview Dr. 76180 NORTH RICHLAND HILLS TX 07/01/93 ST. DAVID'S PAVILION 919 East 32nd Street 78765 AUSTIN TX DEER PARK HOSPITAL 4525 Glenwood 77536 DEER PARK TX 02/12/93 Willow Creek Hosptial 7000 Highway 287 S at Eden Rd 76017 ARLINGTON TX 08/17/93 Hearthstone Home Health, Inc. 2900 North Loop West, suite 580 77092 Houston TX 10/16/98 Lifeway Home Health Care 2028 East Ben White Blvd., Suite 450 78741 Austin TX SALT LAKE REGIONAL 1050 East South Temple 84102 SALT LAKE CITY UT 04/30/95 OGDEN REGIONAL MEDICAL CENTER 5475 South 500 East 84405 OGDEN UT PIONEER VALLEY HOSPITAL 3460 S. Pioneer Parkway 84120 WEST VALLEY CITY UT 05/17/96 CASTLEVIEW HOSPITAL 300 N Hospital Drive 84501 PRICE UT 05/11/99 MOUNTAIN VIEW HOSPITAL 1000 East Highway 6 84651 PAYSON UT BRIGHAM CITY COMMUNITY 900 South 500 West 84302 BRIGHAM CITY UT ASHLEY VALLEY MED CENTER 151 W. 200 N 84078 VERNAL UT 05/11/99 DAVIS MEDICAL CENTER 1600 West Antelope Drive 84041 LAYTON UT 05/17/96

8 ATTACHMENT ONE HCA HOSPITALS TO WHICH COST REPORTING, PHYSICIAN KICKBACK AND PPS TRANSFER RELEASES APPLY (RELEASED LIABILITY RUNS ONLY THROUGH HCA SALE OR CLOSURE DATE)

MEDICARE PROVIDER DATE OF HCA FACILITY NUMBER SALE OR NAME (REDACTED) STREET ZIP CITY STATE CLOSURE - ----------------------------------------------------------------------------------------------------------------------------------- LAKEVIEW HOSPITAL 630 E. Medical Drive 84010 BOUNTIFUL UT ST. MARKS HOSPITAL 1200 East 3900 South 84124 SALT LAKE CITY UT JORDAN VALLEY 3580 West 9000 South 84088 WEST JORDAN UT 03/01/96 PENTAGON CITY HOSPITAL 2455 Army-Navy Drive 22206 ARLINGTON VA 09/02/99 HUMANA HOSPITAL - RICHMOND 7700 Parham Rd 23294 RICHMOND VA 12/10/91 JOHN RANDOLPH MEDICAL CENTER 411 West Randolph Road 23860 HOPEWELL VA JOHNSTON-WILLIS HOSPITAL 1401 Johnston-Willis Drive 23235 RICHMOND VA 01/01/96 LEWIS-GALE MEDICAL CENTER 1900 Electric Road 24153 SALEM VA ARLINGTON HOSPITAL 1701 N George Mason Drive 22205 ARLINGTON VA 09/30/99 CLINCH VALLEY MEDICAL CENTER 2949 West Front Street 24641 RICHLANDS VA RETREAT HOSPITAL 2621 Grove Avenue 23220 RICHMOND VA NORTHERN VIRGINIA DOCTORS 601 S. Carlin Springs Road 22204 ARLINGTON VA 05/17/95 RESTON HOSPITAL CENTER 1850 Town Center Pkwy PO Box 3220 22090 RESTON VA MONTGOMERY REGIONAL 3700 South Main Street 24060 BLACKSBURG VA CHIPPENHAM MEDICAL CENTER 7101 Jahnke Road 23225 RICHMOND VA PULASKI COMMUNITY HOSPITAL 2400 Lee Highway 24301 PULASKI VA HENRICO DOCTORS HOSPITAL 1602 Skipwith Road 23229 RICHMOND VA HUMANA HOSPITAL - BAYSIDE 800 Independence Blvd 23455 VIRGINIA BEACH VA 07/31/91 ALLEGHANY REGIONAL HOSPITAL 1 ARH Lane 24457 LOWMOOR VA PENINSULA PSYCHIATRIC HOSPITAL 2244 Executive Drive 23666 HAMPTON VA LEWIS-GALE PSYCHIATRIC HOSPITAL 1902 Braeburn Dr. 24153 SALEM VA 04/01/96 POPLAR SPRINGS HOSPITAL 350 Poplar Drive PO Box 3060 23805 PETERSBURG VA 02/15/97 DOMINION HOSPITAL 2960 Sleepy Hollow Rd 22044 FALLS CHURCH VA LAKEVIEW HOSPITAL S. 19th St. And Union Sts. 98405 TACOMA WA 08/31/89 CAPITAL MEDICAL CENTER 3900 Capitol Mall Drive SW 98502 OLYMPIC WA GREENBRIER VALLEY MED CTR 202 Maplewood Avenue 24970 RONCEVERTE WV 11/19/98 ST FRANCIS HOSPITAL 333 Laidley 25301 CHARLESTON WV ST. JOSEPH HOSPITAL 1824 Murdock Ave 26101 PARKERSBURG WV BECKLEY HOSPITAL 1007 South Oakwood Avenue 25801 BECKLEY WV 07/09/97 ST. LUKE'S HOSPITAL 1333 Southview Drive 24701 BLUFIELD WV 01/31/99 RALEIGH GENERAL HOSPITAL 1710 Harper Road 25801 BECKLEY WV PUTMAN GENERAL HOSPITAL 1400 Hospital Drive 25526 HURRICANE WV RIVER PARK HOSPITAL 1230 Sixth Avenue 25701 HUNTINGTON WV PARKWAY REGIONAL 6001 Research Park Blvd. 53719 MADISON WI 12/15/93 RIVERTON MEMORIAL 2100 W. Sunset Drive 82501 RIVERTON WY 05/11/99 SPALDING - CHEYENNE REHAB 2600 East 18th Street 82001 CHEYENNE WY 05/31/99

9 ATTACHMENT TWO HCA HOSPITALS TO WHICH WOUND CARE RELEASES APPLY (RELEASED LIABILITY RUNS ONLY THROUGH HCA SALE OR CLOSURE DATE)

MEDICARE PROVIDER DATE OF HCA FACILITY NUMBER SALE OR NAME (REDACTED) STREET ZIP CITY STATE CLOSURE - ----------------------------------------------------------------------------------------------------------------------------------- MONTGOMERY REGIONAL MED CTR 301 South Ripley Street 36104 MONTGOMERY AL 09/01/98 MEDICAL CENTER - PHOENIX 1947 East Thomas Rd 85016 PHOENIX AZ 05/11/99 SAN LEANDRO HOSPITAL 13855 E. 14th Street 94578 SAN LEANDRO CA 05/11/99 MISSION BAY HOSPITAL 3030 Bunker Hill Street 92109 SAN DIEGO CA 05/11/99 PRESBYTERIAN ST LUKES MED CTR 1719 E 19th Ave 80218 DENVER CO MIAMI HEART INSTITUTE SOUTH 4701 N. Meridan Avenue 33140 MIAMI FL JFK MEDICAL CENTER 5301 South Congress Avenue 33462 ATLANTIS FL MEDICAL CENTER OF OSCEOLA 700 West Oak Street 34742 KISSIMMEE FL BARTOW MEMORIAL 1239 E Main St 33830 BARTOW FL 05/11/99 AVENTURA HOSPITAL & MEDICAL CTR 20900 Biscayne Boulevard 33180 AVENTURA FL MEDICAL CENTER OF SANFORD 1401 W Seminole Blvd 32771 SANFORD FL SARASOTA DOCTORS HOSPITAL 5731 Bee Ridge Road 34233 SARASOTA FL CLEARWATER COMMUNITY 1521 East Druid Road 34616 CLEARWATER FL 02/08/99 MEMORIAL HOSP. OF JACKSONVILLE 3625 University Blvd South 32216 JACKSONVILLE FL ST. PETERSBURG MEDICAL CENTER 6500 38 Ave N 33710 ST PETERSBURG FL NORTHWEST REGIONAL HOSPITAL 2801 North State Road # 7 33063 MARGATE FL NORTH FLORIDA REGIONAL MED CTR 6500 Newberry Road 32605 GAINESVILLE FL DEERING HOSPITAL 9333 S.W. 152nd Street 33157 MIAMI FL KENDALL REGIONAL MEDICAL CTR 11750 Bird Road 33175 MIAMI FL OCALA REGIONAL MEDICAL CENTER 1431 SW First Street 32671 OCALA FL SOUTHWEST FLORIDA REG CTR 2727 Winkler Avenue 33901 FORT MYERS FL PARK MEDICAL CENTER 818 S Main Lane 32801 ORLANDO FL 07/01/99 UNIVERSITY HOSPITAL 7201 N. University Drive 33321 TAMARAC FL ORANGE PARK MEDICAL CENTER 2001 Kingsley Avenue 32073 ORANGE PARK FL WESTSIDE REGIONAL MED CTR 8201 W. Broward 33324 PLANTATION FL MEDICAL CENTER OF DAYTONA 400 North Clyde Morris Boulevard 32114 DAYTONA BEACH FL 11/12/99 WEST FLORIDA REGIONAL MED CTR 8383 North Davis Highway 32523 PENSACOLA FL PALM BEACH - HOSPITAL 2201 45th Street 33407 WEST PALM BEACH FL FAWCETT MEMORIAL 21298 Olean Blvd. 33952 PORT CHARLOTTE FL GULF COAST COMMUNITY HOSPITAL 449 West 23 Street 32405 PANAMA CITY FL BRANDON REGIONAL MED CTR 119 Oakfield Drive 33511 BRANDON FL TALLAHASSEE COMMUNITY HOSPITAL 2626 Capital Medical Boulevard 32308 TALLAHASSEE FL REG MED CTR AT BAYONET POINT 14000 Fivay Road 34667 HUDSON FL MED CTR PORT ST. LUCIE 1800 SE Tiffany Avenue 34952 PORT SAINT LUCIE FL ENGLEWOOD COMMUNITY 700 Medical Boulevard 34223 ENGLEWOOD FL 02/10/99 WEST PACES MEDICAL CENTER 3200 Howell Mill Road NW 30327 ATLANTA GA EASTSIDE MEDICAL CENTER 1700 Medical Way 30078 SNELLVILLE GA 12/04/98 BETHANY MEDICAL CENTER 51 North 12th Street 66102 KANSAS CITY KS COLUMBIA HOSPITAL LEXINGTON 310 Limestone Street 40508 LEXINGTON KY 05/11/99 PINE LAKE REGIONAL 1099 Medical Center Circle 42066 MAYFIELD KY 09/01/98 SUBURBAN MEDICAL CENTER 4001 Dutchmans Lane 40207 LOUISVILLE KY GREENVIEW REGIONAL HOSPITAL 1801 Ashley Circle 42104 BOWLING GREEN KY PARKLAND MEDICAL CENTER One Parkland Drive 03038 DERRY NH PORTSMOUTH REGIONAL HOSPITAL 333 Borthwick Avenue 03801 PORTSMOUTH NH 11/01/98 CAPE FEAR MEMORIAL 5301 Wrightsville Avenue 28403 WILMINGTON NC 11/19/98 DAVIS MEDICAL CENTER 218 Old Mocksville Road 28625 STATESVILLE NC 08/01/98 PRESBYTERIAN ORTHOPEDIC HOSP 1901 Randolph Road 28207 CHARLOTTE NC PROVIDENCE HOSPITAL 2435 Forrest Drive 29204 COLUMBIA SC GRAND STRAND REGIONAL MED CTR 809 82nd Parkway 29572 MYRTLE BEACH SC MEDICAL CENTER - WEST 1801 North Oregon 79902 EL PASO TX 07/01/94 SAM HOUSTON MEMORIAL 1615 Hillendahl 77055 HOUSTON TX SOUTHWEST TEXAS METHODIST HOSPITAL 7700 Floyd Curl Drive 78229 SAN ANTONIO SPRING BRANCH MEDICAL CENTER 8850 Long Point Road 77055 HOUSTON TX 05/11/99 MEDICAL CENTER - EAST 10301 Gateway West 79925 EL PASO TX BEAUMONT MEDICAL CENTER 3080 College Street 77701 BEAUMONT TX LAKEVIEW HOSPITAL 630 E. Medical Drive 84010 BOUNTIFUL UT

1 ATTACHMENT THREE HCA HOSPITALS TO WHICH CEDARS MEDICAL CENTER COST SHIFTING RELEASES APPLIES

MEDICARE PROVIDER FACILITY # NAME (REDACTED) STREET ZIP CITY STATE - ------------------------------------------------------------------------------------------------------------------------- CEDARS MEDICAL CENTER 1400 NW 12th Avenue 33136 MIAMI FL MIAMI HEART INSTITUTE SOUTH 4701 N. Meridan Avenue 33140 MIAMI FL JFK MEDICAL CENTER 5301 South Congress Avenue 33462 ATLANTIS FL AVENTURA HOSPITAL & MEDICAL CTR 20900 Biscayne Boulevard 33180 AVENTURA FL NORTHWEST REGIONAL HOSPITAL 2801 North State Road #7 33063 MARGATE FL KENDALL REGIONAL MEDICAL CTR 11750 Bird Road 33175 MIAMI FL UNIVERSITY HOSPITAL & MED CTR 7201 N. University Drive 33321 TAMARAC FL WESTSIDE REGIONAL MED CTR 8201 W. Broward 33324 PLANTATION FL COLUMBIA - PALM BEACH - HOSPITAL 2201 45th Street 33407 WEST PALM BEACH FL

EX-12 5 g83967exv12.txt EX-12 COMPUTATION OF RATIO OF EARNINGS TO CHARGES EXHIBIT 12 HCA INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES FOR THE QUARTERS AND SIX MONTHS JUNE 30, 2003 AND 2002 (DOLLARS IN MILLIONS)

QUARTER SIX MONTHS ----------- --------------- 2003 2002 2003 2002 ---- ---- ------ ------ EARNINGS: Income before minority interests and income taxes........... $437 $623 $1,241 $1,284 Fixed charges, excluding capitalized interest............... 153 137 296 286 ---- ---- ------ ------ $590 $760 $1,537 $1,570 ==== ==== ====== ====== FIXED CHARGES: Interest charged to expense................................. $123 $108 $ 237 $ 229 Interest portion of rental expense and amortization of deferred loan costs....................................... 30 29 59 57 ---- ---- ------ ------ Fixed charges, excluding capitalized interest............... 153 137 296 286 Capitalized interest........................................ 13 10 25 13 ---- ---- ------ ------ $166 $147 $ 321 $ 299 ==== ==== ====== ====== Ratio of earnings to fixed charges.......................... 3.55 5.17 4.79 5.25

EX-31.1 6 g83967exv31w1.txt EX-31.1 302 CERTIFICATION OF THE CEO EXHIBIT 31.1 CERTIFICATION I, Jack O. Bovender, Jr., certify that: 1. I have reviewed this quarterly report on Form 10-Q of HCA Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 11, 2003 By: /s/ JACK O. BOVENDER, JR. ------------------------------------ Jack O. Bovender, Jr. Chairman of the Board and Chief Executive Officer EX-31.2 7 g83967exv31w2.txt EX-31.2 302 CERT. OF PRINCIPAL FINANCIAL OFFICER EXHIBIT 31.2 CERTIFICATION I, R. Milton Johnson, certify that: 1. I have reviewed this quarterly report of Form 10-Q of HCA Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 11, 2003 By: /s/ R. MILTON JOHNSON ------------------------------------ R. Milton Johnson Senior Vice President and Controller (Principal Financial Officer) EX-32.1 8 g83967exv32w1.txt EX-32.1 906 CERTIFICATION EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of HCA Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ JACK O. BOVENDER, JR. ------------------------------------ Jack O. Bovender, Jr. Chairman of the Board and Chief Executive Officer August 11, 2003 By: /s/ R. MILTON JOHNSON ------------------------------------ R. Milton Johnson Senior Vice President and Controller (Principal Financial Officer) August 11, 2003 -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1

                                                                    EXHIBIT 10.1


                       ADMINISTRATIVE SETTLEMENT AGREEMENT

                                   I. PARTIES

       This Settlement Agreement ("Agreement") is entered into between the
following (hereinafter "the Parties") through their authorized representatives:
the United States Department of Health and Human Services ("HHS"), acting
through the Centers for Medicare & Medicaid Services ("CMS"), and HCA Inc.
("HCA").

                                 II. DEFINITIONS

       For the purposes of this Agreement:

       "HCA Provider" shall mean any entity that meets both of the following
requirements: (a) has received or is entitled to receive reimbursement from the
Medicare program for services provided at a hospital, critical access hospital,
skilled nursing facility, comprehensive outpatient rehabilitation facility, home
health agency, hospice, rehabilitation hospital, or psychiatric hospital; and
(b) is or was managed, owned or controlled by HCA or by any entity directly or
indirectly at least 50% owned or controlled by HCA or any of the public
companies previously known as HCA-The Healthcare Company, Hospital Corporation
of America, HCA-Hospital Corporation of America, Galen Health Care, Inc.,
HealthTrust, Inc.-The Hospital Company, EPIC Healthcare Group, Inc., Columbia
Healthcare Corporation, Columbia Hospital Corporation, Medical Care America,
Inc., Basic American Medical, Inc. and Columbia/HCA Healthcare Corporation.

       "HCA Cost Report Overpayment Obligations" means any obligation that HCA
or any HCA Provider has, could have had or could have to pay amounts to HHS or
CMS (or any of their agents, including a carrier or intermediary), directly,
through offset, or otherwise, arising from cost statements, cost reports or
appeals which have been filed or which could have been







filed by HCA or an HCA Provider for cost reporting periods ending on or before
July 31, 2001. HCA Cost Report Overpayment Obligations do not include
obligations to repay monies erroneously paid to HCA or an HCA Provider due to
representations made by submission of any Form UB-92 or CMS Form 1500 or any
actual or potential liability arising under the authority of the Inspector
General of HHS for program exclusion or the imposition of civil monetary
penalties. HCA Cost Report Overpayment Obligations do not include obligations of
any HCA Provider sold or otherwise disposed of by HCA for any cost reporting
period ending after such sale or other disposition. HCA Cost Report Obligations
do not include obligations of any HCA Provider acquired after July 31, 2001,
except for any cost reporting period during which such HCA Provider was
previously owned in whole or in part by HCA.

       "Effective Time" means the time that CMS receives the electronic transfer
payment set forth in paragraph 1.

       "DOJ" means the United States Department of Justice.

                            III. TERMS AND CONDITIONS

       NOW, THEREFORE, the Parties agree as follows:

       1. HCA agrees to pay to CMS $250,000,000 within five (5) business days
from the execution of this Agreement by the Parties. Payment shall be made by
electronic funds transfer pursuant to written instructions to be provided HCA by
the Office of Financial Management of CMS no later than the date of execution of
this Agreement.

       2. As of the Effective Time, except as provided in Paragraphs 6 and 9 of
this Agreement, HHS, on behalf of itself, its officers, and agents, including
but not limited to its fiscal intermediaries ("FIs"), hereby releases and
discharges HCA and all HCA Providers from any HCA Cost Report Overpayment
Obligations and HHS and CMS shall not pursue such HCA







Cost Report Overpayment Obligations, including by audits or in any
administrative forum or court.

       3. As of the Effective Time, HCA hereby releases HHS from any liability
in connection with cost statements or cost reports which have been filed or
could have been filed by HCA or an HCA Provider for cost reporting periods
ending on or before July 31, 2001 including any administrative appeals and
federal court cases (together, the "Appeals") arising from such claims. HCA
shall move to withdraw such Appeals with prejudice, and shall not file any
further Appeals with respect to the HCA Cost Report Overpayment Obligations.

       4. For all acceptable cost reports (as defined in 42 C.F.R.
ss. 413.24(f)(5)) filed and covered by this Agreement, and subject to any
Special Circumstances Agreement ("SCA") ratified by HCA and CMS and except as
provided in Paragraphs 5 and 9 of this Agreement, HCA and CMS agree that: (a)
this Agreement will constitute the final payment determination contemplated by
42 U.S.C. ss. 1395oo; (b) HCA hereby waives its right to appeal this
determination; (c) HHS and CMS waive any right they may have to reopen this
payment determination with respect to any such cost report; and (d) the data and
statistics set forth in or with the first twelve-month as-filed cost report
filed on or after January 1, 1999, for each HCA Provider will be used as the
basis for computing future reimbursement amounts that are dependent on the
settlement of prior year cost reports until such time as said as-filed cost
reports are superseded for this purpose by cost reports filed in connection with
fiscal years ending after July 31, 2001.

       5. Notwithstanding this or any other provision of this Agreement, CMS may
(1) reopen HCA and/or HCA Provider cost reports for cost reporting periods
ending on or before July 31, 2001, for the purpose of complying with any act of
Congress requiring CMS to rely on




settled cost reports for such year(s) as a basis for adjusting Federal payment
rates to providers participating in Medicare; (2) reopen HCA and/or HCA Provider
cost reports for the purpose of determining overpayments or underpayments for
HCA Providers sold or otherwise disposed of by HCA for cost reporting periods
ending subsequent to such sale or other disposition; and (3) reopen HCA and/or
HCA Provider cost reports for cost reporting periods ending on or before July
31, 2001, for the purpose of implementing paragraph 15 of the December 2000
Civil and Administrative Settlement Agreement, paragraph 17 of the December 2000
Plea Agreement, and paragraph 12 of the __________ 2003 Civil Settlement
Agreement; provided, however, that if CMS reopens an HCA and/or HCA Provider
cost report under paragraphs 5(1) or 5(2) of this Agreement, (a) CMS will not
use any such reopening either to pay any additional amounts to HCA or to seek
further payments from HCA for the reopened period(s) and (b) if CMS reopens any
cost report specifically identified in the last filed complaints of the United
States or relators in United States ex rel. Alderson v. HCA, et al., Case No.
93-3290 (RCL); United States ex rel. Schilling v. HCA, et al., Case No. 99-3289
(RCL); United States ex rel. Marine v. Columbia Aventura Medical Center, et al.,
Case No. 00-1845 (RCL); United States ex rel. Lanni v. HCA, et al., Case No.
00-2584 (RCL); and United States ex rel. Parslow v. HCA, et al., Case No.
99-3338 (RCL), HCA will promptly provide to CMS alternative versions of such
cost reports calculated to reflect the removal of any amounts alleged to have
been inflated in such complaints so as to enable CMS to consider this data in
setting future rates. Disputes with respect to reopening under 5(2) of this
Agreement will be presented to the Provider Reimbursement Review Board (PRRB)
for resolution.

        6. As of the Effective Time, HCA and any and all HCA providers that have
not yet filed acceptable cost reports (as defined by 42 C.F.R. ss. 413.24(f)(5))
for cost reporting periods







ending on or before July 31, 2001, are required to file acceptable cost reports
with the appropriate FIs. Notwithstanding this or any other provision of this
Settlement Agreement, HCA and/or an HCA provider(s) who fails, by the Effective
Time, to file an acceptable cost report(s) for cost reporting periods ending on
or before July 31, 2001 with the appropriate FI(s) is subject to the provisions
of 42 C.F.R. ss. 405.371(c) and all other potential penalties for failure to
file a timely acceptable cost report(s).

       7. 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.

       8. This Agreement is entered into contemporaneous with the ________ 2003
Civil Settlement Agreement concerning HCA's alleged liability under the False
Claims Act, other federal statutes, and the common law for certain conduct
described in the _______ 2003 Civil Settlement Agreement; this Agreement in no
way compromises, nor does payment hereunder satisfy claims or damages alleged in
the Complaints or Amended Complaints of the United States dismissed through the
________ 2003 Civil Settlement Agreement.

       9. Nothing herein affects the obligations of HCA and the rights of the
United States and HHS pursuant to the (1) December 2000 Plea Agreement, (2)
December 2000 Civil and Administrative Settlement Agreement, (3) December 2000
Corporate Integrity Agreement, and (4) the ___________ 2003 Civil Settlement
Agreement. Further, nothing herein releases HCA from any administrative monetary
claim arising from HCA's charging of any unallowable costs (as that term is
defined in paragraph 15(a) of the December 2000 Civil and Administrative
Settlement Agreement, paragraph 17 of the December 2000 Plea Agreement, and
paragraph 12(a) of the 2003 Civil Settlement Agreement) incurred with respect to
the claims settled under







the terms of the ___________ 2003 Civil Settlement Agreement, the December 2000
Civil and Administrative Settlement Agreement, or the December 2000 Corporate
Integrity Agreement.

       10. 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.

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

       12. This Agreement is intended to be for the benefit of the Parties and
HCA Providers only; provided, however, that this Agreement does not release any
obligations of any HCA Provider sold or otherwise disposed of for any cost
reporting period ending after such sale or disposition nor does this Agreement
release any obligations of any HCA Provider acquired after July 31, 2001, except
for any cost reporting period during which such HCA Provider was previously
owned in whole or in part by HCA. The Parties do not release any claims against
any other person or entity.

       13. This Agreement constitutes the entire agreement between the Parties
with respect to the subject matter of the Agreement and supersedes all prior
agreements and understandings, both oral and written, between the Parties with
respect to the subject matter of this Agreement.

       14. This Agreement may not be amended or modified except by written
consent of the Parties.

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






       16. 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 purpose of this Agreement.

       17. CMS agrees to communicate all relevant terms of this Agreement to its
FIs and to ensure that the FIs properly implement its provisions.



"HCA"                                  UNITED STATES DEPARTMENT OF

                                       HEALTH AND HUMAN SERVICES



HCA Inc.                               By "CMS"

                                       Centers for Medicare & Medicaid Services



By /s/ Robert A. Waterman              By /s/ Timothy Hill
   ------------------------------         -------------------------------------
                                          Timothy Hill
Its General Counsel                       Acting Director, Office of
    -----------------------------           Financial Management

Date 6/25/03                           Date 6/25/03
     ----------------------------           -----------------------------------


/s/ Walter Loughlin
- ---------------------------------
Counsel to HCA

EX-10.2

                                                                    EXHIBIT 10.2

                           CIVIL SETTLEMENT AGREEMENT
                                  I. PARTIES

         This Civil Settlement Agreement ("Agreement") is entered into between
the following (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 (collectively
"the United States"); and HCA Inc., 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, and numerous ancillary health care
facilities in at least thirty states.

         B.       James F. Alderson, Gary L. King, Francesco Lanni, Michael
Marine, Ann Mroz, Joseph "Mickey" Parslow, James M. Thompson, and John W.
Schilling ("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:


Civil Settlement Agreement
Between the United States & HCA Inc.

         (1)      U.S. ex rel. Alderson v. Columbia/HCA Healthcare Corp., et
                  al,

                  Case No. 99-3290 (D.D.C.);

         (2)      U.S. ex rel. King v. Columbia/HCA Healthcare Corp., et al.,

                  Case No. 99-3306 (D.D.C.);

         (3)      U.S. ex rel. Lanni v. Curative Health Services, Inc. et al.,

                  Case No. 00-2584 (D.D.C.);

         (4)      U.S. ex rel. Marine v. Columbia Aventura Medical Center, et
                  al.,

                  Case No. 00-1845 (D.D.C.);

         (5)      U.S. ex rel. Mroz v. Columbia/HCA Healthcare Corp., et al.,

                  Case No. 99-3292 (D.D.C.);

         (6)      U.S. ex rel. Parslow v. Columbia/HCA Healthcare Corp., et
                  al.,

                  Case No. 99-3338 (D.D.C.);

         (7)      U.S. ex rel. Schilling v. Columbia/HCA Healthcare Corp., et
                  al.,

                  Case No. 99-3289 (D.D.C.);

         (8)      U.S. ex rel. Thompson v. Columbia/HCA Healthcare Corp., et
                  al.,

                  Case No. 99-3302 (D.D.C.).

In the Alderson, Schilling, and Marine actions, above, HCA and certain of the
HCA hospitals identified in Attachment 1 to this Agreement filed counterclaims
and amended counterclaims against the United States ("HCA Counterclaims").

         C.       HCA submitted or caused to be submitted claims for payment to
the Medicare Program (Medicare), Title XVIH of the Social Security Act, 42
U.S.C.ss.ss.1395-


Civil Settlement Agreement
Between the United States & HCA Inc.  -2-



1395ggg, the Medicaid Program, 42 U.S.C.ss.ss.1396-1396v; and the TRICARE
Program (TRIGARE), 10 U.S.C.ss.ss.1071-1110 (collectively "the government
healthcare programs").

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

                               (1) COST REPORTING

         For cost report or cost statement periods ending on or after January
1, 1987 and ending on or before December 31, 1997, HCA and the HCA hospitals
identified in Attachment 1 to this Agreement ("the HCA Hospitals") submitted or
caused to be submitted cost reports and cost statements to representatives of
the government healthcare programs seeking (a) reimbursement based in whole or
in part upon costs stated to have been incurred as a result of treating
beneficiaries of those programs, or (b) certain other payments claimed for
reimbursement through a cost report (specifically, disproportionate share
payments, indirect and direct medical education payments, bad debt payments,
payments on charges where program reimbursable costs exceeded those charges,
organ transplant payments, CORF payments, and rural health clinic payments),
all of which HCA or an HCA Hospital represented were subject to reimbursement
under the laws, regulations and rules applicable to those programs. These
claims were false because many of the costs for which HCA and the HCA Hospitals
sought reimbursement were either not incurred, incurred in lesser amounts,
and/or otherwise not "allowable," i.e., reimbursable, as claimed under the
laws, regulations and rules governing the programs.


Civil Settlement Agreement
Between the United States & HCA Inc.  -3-

                            (2) PHYSICIAN KICKBACKS

         From January 1, 1987 through December 31, 1999, the HCA Hospitals
(i.e., the hospitals identified in Attachment 1) and affiliated HCA home health
agencies submitted or caused to be submitted claims to representatives of the
government healthcare programs for items and services delivered by hospitals
and home health agencies that were ordered by a physician, a member of a
physician group practice, a professional corporation or other legal entity
owned at least in part by a physician with whom the billing HCA provider, an
HCA entity having an ownership interest in that provider, or an entity in which
the HCA provider has an ownership interest, had a financial relationship,
directly or through a family member. These claims were false because (a)
Section 1877 of the Social Security Act ("SSA"), 42 U.S.C. ss. 1395nn (also
known as the Stark Laws) prohibited the HCA providers from billing Medicare for
items or services referred or ordered by physicians with whom HCA had improper
financial relationships, (b) the HCA providers forfeited the right to bill the
government healthcare programs for such items and services by paying
remuneration to physicians intending that remuneration to induce those and
other referrals in violation of the Anti-kickback Statute, 42 U.S.C. ss.
1320a-7b(b), or (c) the HCA providers were required to and did certify on cost
reports submitted to fiscal intermediaries for the applicable fiscal years that
items and services identified or summarized in each cost report were not
provided or procured through the payment directly or indirectly of a kickback
or billed in violation of federal law (i.e., the Stark Laws).

                        (3) CURATIVE WOUND CARE CENTERS

         From January 1, 1993 through December 31, 1999, HCA hospitals
identified in Attachment 2 to this Agreement submitted or caused to be
submitted cost reports to


Civil Settlement Agreement
Between the United States & HCA Inc.  -4-

representatives of Medicare seeking reimbursement of management fees paid to
Curative Health Services, Inc. ("Curative"), and seeking reimbursement for
items and services rendered to patients in Wound Care Centers managed by
Curative ("WCCs"). These claims were false because the management fees paid to
Curative included unallowable costs for marketing and advertising. Certain of
the HCA hospitals identified in Attachment 2 also submitted claims that were
false because, contrary to each such hospital's certification, the management
fee payments to Curative violated the Anti-kickback Statute, 42 U.S.C. ss.
1320a-7b(b), and claims submitted for items or services rendered to Medicare
beneficiaries as a result were fraudulent. Additionally, the claims of certain
hospitals identified in Attachment 2 for reimbursement of costs incurred for
providing Procuren, a wound-healing product manufactured by Curative, were
false because Procuren was not reimbursable under Medicare.

                                (4) PPS TRANSFER

         From January 1, 1992 through December 31, 2000, HCA hospitals
identified in Attachment 1 to this Agreement submitted or caused to be
submitted claims for discharges of patients who were in fact transferred to
another Prospective Payment System ("PPS") facility. Those claims were false
because such patients were not "discharged" within the applicable Medicare
regulations and the HCA hospitals were not entitled to the full amount of
reimbursement they sought.

                    (5) CEDARS MEDICAL CENTER COST SHIFTING

         From 1994 through December 31, 1997, HCA hospitals identified in
Attachment 3 filed false Medicare cost reports and cost statements that
included Resource Center home health costs incurred by another hospital, Cedars
Medical Center, which costs Medicare would not pay


Civil Settlement Agreement
Between the United States & HCA Inc.  -5-

because Cedars' home health costs exceeded the cost limit, to other HCA
hospitals that were below the cost limits. These claims were false because
hospitals identified in Attachment 3 were not entitled to receive reimbursement
for the costs incurred by Cedars Medical Center under the laws, regulations and
rules governing Medicare.

                  (6) LAWNWOOD REGIONAL MEDICAL CENTER CLAIMS

         For cost report years 1991 through 1996, HCA's Lawnwood Regional
Medical Center submitted cost reports to representatives of Medicare seeking
reimbursement of purportedly allowable costs. These claims were false because
Lawnwood: (a) overstated the extent to which it treated a disproportionate
share of indigent patients; (b) improperly reclassified certain salary and
benefit costs to the skilled nursing unit, the psychiatric facility and the
outpatient services department for employees who did not work in those units;
(c) billed inconsistently for laboratory services; and (d) did not properly
allocate the salaries and benefits of certain emergency room physicians.

         E.       The OIG-HHS and TMA contend that they have certain
administrative claims against HCA under the provisions 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, and permissive exclusion from TRICARE, 32 C.F.R. ss.199.9,
for the Covered Conduct.

         F.       HHS also contends that it has certain administrative claims
against HCA for overpayments for amounts claimed through cost reports and cost
statements submitted to representatives of Medicare. Those administrative
overpayment claims are the subject of another


Civil Settlement Agreement
Between the United States & HCA Inc.  -6-

settlement agreement executed contemporaneously with this agreement between HCA
and the HHS Centers for Medicare & Medicaid Services ("2003 HHS Administrative
Agreement").

         G.       The Relators identified in Paragraph B above have each
represented, through counsel, that they agree that the settlement amount
negotiated by the United States for claims stated in the qui tam action each
filed is fair, adequate, and reasonable under all the circumstances as defined
by 31 U.S.C. ss. 3730(c)(2)(B). Each Relator claims entitlement under 31 U.S.C.
ss. 3730(d) to a share of the proceeds of this Agreement. This Agreement does
not cover the claims of any Relator to a share of the proceeds or their
attorney's fees under 31 U.S.C. ss. 3730(d). Nothing in this agreement shall
constitute evidence or an admission that any relator has a valid claim as a
relator.

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

         I.       HCA has executed a letter of credit in favor of the United
States in the total amount of two hundred fifty million dollars ($250,000,000)
pursuant to a February 11, 1999 Letter of Credit Agreement (LOC Agreement), as
amended. The LOC Agreement is incorporated herein by reference.

         J.       HCA and OIG-HHS executed a separate Corporate Integrity
Agreement ("CIA") on December 14, 2000, 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.


Civil Settlement Agreement
Between the United States & HCA Inc.  -7-

                           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:

         1.       HCA agrees to pay to the United States $629,487,927.00, plus
interest accruing at a simple rate of 4.5% per annum from February 3, 2003
through and including the Payment Date (the "Settlement Amount"). The "Payment
Date" shall be within ten (10) days after entry of the Orders of Dismissal by
the United States District Court for the District of Columbia. HCA agrees to
pay the Settlement Amount 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 Settlement Amount represents the total of the following settlement
amounts:

         Cost Reporting Intervened Claims: $356,000,000
         Physician Kickbacks: $225,500,000
         Curative Wound Care Centers: $17,000,000
         PPS Transfer:   $5,000,000
         Cedars Medical Center Cost Shifting: $950,000
         Lawnwood Regional Medical Center: $5,037,927
         Amounts for Alderson and Schilling Declined Claims: Relators' Share
         for those Claims: $20,000,000

         2.       Subject to the exceptions in Paragraph 8 below, in
consideration of the obligations of HCA set forth in this Agreement,
conditioned upon HCA's payment in full of the


Civil Settlement Agreement
Between the United States & HCA Inc.  -8-

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, corporations, current
or former owners, partnerships or other legal entity in which HCA or an HCA
subsidiary has or had an ownership interest, and the partners or other
shareholders in any such partnership or other legal entity, 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; the civil money
penalty provision of the Stark Laws, 42 U.S.C. ss.ss. 1395nn(g)(3), (4); or the
common law and/or equitable theories of payment by mistake, unjust enrichment,
recoupment, restitution, disgorgement of illegal profits and fraud, for the
Covered Conduct.

         3.       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 from all obligations it has under the LOC
Agreement.

         4.       After the execution of this Agreement, the United States, HCA
and Relators will file stipulations in the United States District Court for the
District of Columbia for (a) dismissal with prejudice of the claims stated
against HCA in the United States' Complaints and Amended Complaints in the
Civil Actions identified in Paragraph B above; (b) dismissal with prejudice to
Relators and without prejudice to the United States of those claims stated
against HCA in the Relators' Complaints and Relators' Amended Complaints in the
Civil Actions


Civil Settlement Agreement
Between the United States & HCA Inc.  -9-

identified in Paragraph B above; and (c) dismissal with prejudice to HCA and
the HCA Hospitals of the HCA Counterclaims. The stipulations of dismissal will
be conditioned upon receipt by the United States of the Settlement Amount, and
subject to the terms of this Agreement. With the exception of those claims
excluded from the above releases by Paragraph 8 below, 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.

         5.       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.

         6.       In consideration of the obligations of HCA set forth in this
Agreement and the CIA, incorporated herein by reference, conditioned upon HCA's
payment in full of the Settlement Amount, the OIG-HHS agrees to 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 8, 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. Nothing in this


Civil Settlement Agreement
Between the United States & HCA Inc.  -10-

Paragraph precludes the OIG-HHS from taking action against entities or persons,
or for conduct and practices, for which claims have been reserved in Paragraph
8, below.

         7.       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 8, below, and as reserved in this Paragraph. TMA
expressly reserves authority 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
TRICARE/CHAMPUS program under 32 C.F.R. ss.ss. 199.9 (f)(l)(i)(A),
(f)(l)(i)(B), and (f)(l)(iii), based upon the Covered Conduct.

         8.       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 or its agencies:

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

                  b.       Any criminal liability;

                  c.       Except as stated in Paragraphs 2, 6 and 7 of this
Agreement, any administrative liability, including mandatory exclusion from
Federal health care programs;

                  d.       Any liability for any conduct other than the Covered
Conduct;


Civil Settlement Agreement
Between the United States & HCA Inc.  -11-

                  e.       Any claims based upon such obligations as are
created by this Agreement;

                  f.       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;

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

                  h.       Any claims based on a failure to deliver items or
services due;

                  i.       Any civil or administrative claims against
individuals (including current or former directors, officers, employees,
agents, or shareholders of HCA);

                  j.       Any civil or administrative claims against hospitals
or other entities acquired by HCA after May 2000 for conduct during periods in
which those hospitals or entities were not owned in whole or in part by HCA
prior to May 2000;

                  k.       Any claims for conduct described in Paragraph (D)(l)
(cost reporting) that are alleged in the relators' complaints pending as of
December 2002 in the following qui lawsuits:

                  (i)      U.S. ex rel. Hockett, et al., v. Columbia/HCA
                           Healthcare Corp., et al., No. 99-33ll(D.D.C);

                  (ii)     U.S. ex rel. McReady v. Columbia North Monroe
                           Hospital, et al., No. 00-1846(D.D.C.);

                  (iii)    {7.5*. ex rel. Sanderson v. HCA - The Healthcare
                           Company, et al., No. 3-01 0580 (M.D. Tenn.);


Civil Settlement Agreement
Between the United States & HCA Inc.  -12-

                  (iv)     U.S. ex rel. Locke v. Living Hope Institute, et al.,
                           Civ. A. No. LR-C-99-031 (E.D.Ark.).

         9.       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.

         10.      HCA and the HCA Hospitals fully and finally release the
United States, its agencies, employees, servants, and agents from any claims
(including, without limitation, the HCA Counterclaims and any claims for
attorney's fees, costs, and expenses of every kind and however denominated)
which HCA has asserted, could have asserted, 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,
prosecution and settlement thereof.

         11.      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 TRICARE or any State payor, related to
the Covered Conduct; and HCA agrees not to resubmit to any Medicare carrier or
intermediary or to TRICARE or any State payor any


Civil Settlement Agreement
Between the United States & HCA Inc.  -13-

previously denied claims related to the Covered Conduct, and agrees not to
appeal any such denials of claims.

         12.      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 predecessors and current and former
affiliates, divisions and subsidiaries and 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,

                           (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 attorneys 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 payments HCA makes to the United States
pursuant to this Agreement and the 2003 HHS Administrative Agreement and any
payments that HCA may make to any relator and/or relator's attorney, are
unallowable costs on Government contracts and


Civil Settlement Agreement
Between the United States & HCA Inc.  -14-

under the Medicare Program, Medicaid Program, TRICARE Program, and Federal
Employees Health Benefits Program (FEHBP). (All costs described or set forth in
this Paragraph 12(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 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


Civil Settlement Agreement
Between the United States & HCA Inc.  -15-

Department of Justice, and/or the affected agencies. The 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.

                  13.      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 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


Civil Settlement Agreement
Between the United States & HCA Inc.  -16-

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 any state, including, but not limited to, the
Plea Agreement that HCA entered with the United States in December, 2000.

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

         15.      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.

         16.      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.

         17.      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.

         18.      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.


Civil Settlement Agreement
Between the United States & HCA Inc.  -17-

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

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

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

         22.      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 Settlement Agreement
Between the United States & HCA Inc.  -18-

                          THE UNITED STATES OF AMERICA


DATED: June 26, 2003                       BY: /s/ Joyce R. Branda
      ----------------------------            --------------------------------
                                              JOYCE R. BRANDA
                                              Deputy Director
                                              Commercial Litigation Branch
                                              Civil Division
                                              U.S. Department of Justice


Civil Settlement Agreement
Between the United States & HCA Inc.  -19-



DATED: June 25, 2003                       BY: /s/ Larry J. Goldberg
      ----------------------------            --------------------------------
                                              LARRY J. GOLDBERG
                                              Assistant Inspector for Legal
                                              Affairs Office of Inspector
                                              General United States Department
                                                of Health and Human Services


Civil Settlement Agreement
Between the United States & HCA Inc.  -20-



DATED: 24 June 03                          BY: /s/ Laurel C. Gillespie
      ----------------------------            --------------------------------
                                              LAUREL C. GILLESPIE
                                              Deputy General Counsel
                                              TRICARE Management Activity
                                              United States Department of
                                                Defense


Civil Settlement Agreement
Between the United States & HCA Inc.  -21-

                                    HCA INC.


DATED: 6/24/2003                          BY: /s/ Robert A. Waterman
      ----------------------------            --------------------------------
                                              ROBERT A. WATERMAN
                                              General Counsel
                                              HCA


DATED: JUNE 24, 2003                       BY: /s/ Cathryn L. Sowers
      ----------------------------            --------------------------------
                                              CATHRYN L. SOWERS
                                              Vice President
                                              Litigation
                                              HCA


DATED: 6/26/03                             BY: /s/ Roger S. Goldman
      ----------------------------            --------------------------------
                                              ROGER S. GOLDMAN
                                              WALTER P. LOUGHLIN
                                              Latham & Watkins
                                              Counsel for HCA


Civil Settlement Agreement
Between the United States & HCA Inc.  -22-

ATTACHMENT ONE

                             HCA HOSPITALS TO WHICH
                                COST REPORTING,
                             PHYSICIAN KICKBACK AND
                                  PPS TRANSFER
                                 RELEASES APPLY
                         (RELEASED LIABILITY RUNS ONLY
                       THROUGH HCA SALE OR CLOSURE DATE)



                                   MEDICARE
                                   PROVIDER                                                                             DATE OF HCA
FACILITY                           NUMBER                                                                               SALE OR
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE     CLOSURE
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
THOMASVILLE HOSPITAL                           1440 Highway 43 North            36748   THOMASVILLE           AL        08/17/93
ANDALUSIA HOSPITAL                             849 S Three Notch Street         36420   ANDALUSIA             AL        05/11/99
MEDICAL CENTER - ENTERPRISE                    400 N Edwards Street             36330   ENTERPRISE            AL        05/01/94
MONTGOMERY REGIONAL MED CTR                    301 South Ripley Street          36104   MONTGOMERY            AL        09/01/98
NORTHWEST MEDICAL CENTER                       Jackson Hwy. By-Pass             35653   RUSSELLVILLE          AL        10/01/98
NORTHRIDGE MED CTR                             124 S Memorial Dr                36067   PRATTVILLE            AL        09/01/98
FOUR RIVERS MED CTR                            1015 Medical Center Parkway      36701   SELMA                 AL        09/01/98
DOCTORS HOSPITAL - MOBILE                      1700 Center Street               36604   MOBILE                AL        05/31/90
FLORENCE HOSPITAL                              2111 Cloyd Boulevard             35630   FLORENCE              AL        10/01/98
MEDICAL CENTER - SHOALS                        201 Avalon Ave.                  35661   MUSCLE SHOALS         AL        10/01/98
MEDICAL CENTER - HUNTSVILLE                    911 Big Cove Rd., S.E.           35801   HUNTSVILLE            AL        03/23/94
CRESTWOOD - MED CTR HUNTSVILLE                 One Hospital Drive               35801   HUNTSVILLE            AL        05/11/99
EAST MONTGOMERY MEDICAL CTR                    404 Taylor Road                  36117   MONTGOMERY            AL        09/01/98
KNOLLWOOD PARK MEDICAL CENTER                  5600 Girby Road                  36690   MOBILE                AL        05/31/90
ALASKA REGIONAL                                2801 Debarr Road Pouch 8AH       99514   ANCHORAGE             AK
MEDICAL  CENTER - PHOENIX                      1947 East Thomas Rd              85016   PHOENIX               AZ        05/11/99
EL DORADO MEDICAL CENTER                       1400 North Wilmot Road           85712   TUCSON                AZ        05/11/99
PARADISE VALLEY HOSPITAL                       3929 E. Bell Road                85032   PHOENIX               AZ        05/11/99
NORTHWEST HOSPITAL                             6200 N. La Cholla Boulevard      85741   TUCSON                AZ        05/11/99
SONORA DESERT PSYCHIATRIC                      1920 W. Rudasill Rd.             85704   TUCSON                AZ        06/12/92
PARADISE VALLEY PSYCHIATRIC                    7100 East Mescal St              85254   PHOENIX               AZ        05/11/99
MED CTR OF  SOUTH ARKANSAS                     700 West Grove                   71731   EL DORADO             AR        05/11/99
MEDICAL PARK HOSPITAL                          2001 South Main Street           71801   HOPE                  AR        05/11/99
DEQUEEN REGIONAL MED CTR                       1306 W. Collin Raye Boulevard    71832   DEQUEEN               AR        05/11/99
DOCTORS HOSPITAL (LITTLE ROCK)                 6101 Capitol Avenue              72205   LITTLE ROCK           AR        02/01/98
RIVERSIDE COMMUNITY MEDICAL                    4445 Magnolia Avenue             92501   RIVERSIDE             CA
BROTMAN MEDICAL CENTER                         3828 Delmass Terrace             90231   CULVER CITY           CA        05/31/89
ENCINO TARZANA REGIONAL                        16237 Ventura Boulevard          91436   ENCINO                CA        12/31/92
VALLEY MEDICAL CENTER                          1688 East Main St                92021   EL CAJON              CA        03/16/93
SAN JOSE MEDICAL CENTER                        675 E. Santa Clara Street        95112   SAN JOSE              CA
SAN LEANDRO HOSPITAL                           13855 E. 14th Street             94578   SAN LEANDRO           CA        05/11/99
WESTSIDE HOSPITAL                              910 S. Fairfax Ave.              90036   LOS ANGELES           CA        07/01/96
HEALDSBURG GENERAL HOSPITAL                    1375 University Avenue           78413   HEALDSBURG            CA        11/16/98
HUMANA HOSPITAL - WESTMINSTER                  200 Hospital Circle              92683   WESTMINSTER           CA        11/10/92
GOOD SAMARITAN HOSPITAL                        2425 Samaritan Drive             95124   SAN FRANCISCO         CA
PALM DRIVE HOSPITAL                            501 Petaluma Avenue              95472   SEBASTOPOL            CA        03/01/99
VISALIA COMMUNITY HOSPITAL                     1633 S. Court St.                93277   VISALIA               CA        08/31/94
GREEN HOSPITAL OF SCRIPPS CLINIC               10666 North Torrey Pines Road    92037   LA JOLLA              CA        10/31/91
WEST ANAHEIM MED CTR                           3033 W Orange Ave                92804   ANAHEIM               CA        05/11/99
COMMUNITY - GARDENA                            1246 West 155th Street           90247   GARDENA               CA        12/31/91
UKIAH GENERAL HOSPITAL                         1120 South Dora Street           95482   UKIAH                 CA        08/07/88
WEST HILLS REGIONAL MEDICAL CTR                7300 Medical Center Drive        91307   CANOGA PARK           CA
HUNTINGTON BEACH HOSPITAL                      17772 Beach Boulevard            92647   HUNTINGTON BEACH      CA        05/11/99
LOS ROBLES REGIONAL                            215 West Janss Road              91360   THOUSAND OAKS         CA
LA HABRA COMMUNITY HOSPITAL                    1251 W Lambert Rd                90631   LA HABRA              CA        03/31/88
SAN CLEMENTE HOSPITAL                          654 Camino De Los Mares          92673   SAN CLEMENTE          CA        05/15/98
CHINO VALLEY MED CTR                           5451 Walnut Avenue               91710   CHINO                 CA
WESTLAKE MEDICAL CENTER                        32126 Agoura Road                91359   WESTLAKE VILLAGE      CA        07/25/96
MISSION BAY HOSPITAL                           3030 Bunker Hill Street          92109   SAN DIEGO             CA        05/11/99
SOUTH VALLEY HOSPITAL                          9400 No Name Uno                 95020   GILROY                CA        09/30/99
WOODVIEW-CALABASAS HOSPITAL                    25100 Calabasas Rd.              91302   CALABASAS             CA        03/31/93
LAS ENCINAS HOSPITAL                           2900 E Del Mar Blvd              91107   PASADENA              CA
CEDAR VISTA PSYCHIATRIC                        7171 North Cedar Avenue                  FRESNO                CA        01/01/94
CANYON RIDGE HOSPITAL                          5353 G Street                            CHINO                 CA        01/01/94
PRESBYTERIAN ST LUKES MED CTR                  1719 E 19th Ave                  80218   DENVER                CO
ROSE MEDICAL CENTER                            4567 East Ninth Avenue           80220   DENVER                CO
SWEDISH MEDICAL CENTER                         501 E. Hampden Avenue            80110   ENGLEWOOD             CO
NORTH SUBURBAN MEDICAL CTR                     9191 Grant Street                80229   THORNTON              CO
AURORA MEDICAL CENTER                          1501 S. Potomac WY               80012   AURORA                CO        01/01/97
AURORA PRESBYTERIAN                            900 Potomac                      80011   AURORA                CO



                                                                               1

ATTACHMENT ONE

                             HCA HOSPITALS TO WHICH
                                COST REPORTING,
                             PHYSICIAN KICKBACK AND
                                  PPS TRANSFER
                                 RELEASES APPLY
                         (RELEASED LIABILITY RUNS ONLY
                       THROUGH HCA SALE OR CLOSURE DATE)



                                   MEDICARE
                                   PROVIDER                                                                             DATE OF HCA
FACILITY                           NUMBER                                                                               SALE OR
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE     CLOSURE
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
SPALDING REHABILITATION HOSPITAL               900 Potomac St                   80011   AURORA                CO
ROCKY MOUNTAIN REHABILITATION                  900 Potomac St                   80011   AURORA                CO        12/31/95
NORTH SUBURBAN REHABILITATION                                                           THORNTON              CO
COLUMBINE PSYCHIATRIC                          8565 S. Poplar Way               80126   LITTLETON             CO        09/01/96
BETHESDA PSYCHEALTH SYSTEM                     4400 East Iliff Avenue           80222   DENVER                CO        01/01/98
Aurora Presbyterian Transitional
  Care                                         1501 S. Potomac Street           80012   Aurora                CO        12/29/98
Park Manor                                     1707 East 18th Street            80218   Denver                CO
ROCKFORD CENTER                                100 Rockford Drive               19714   NEWARK                DE        08/31/96
CEDARS MEDICAL CENTER                          1400 NW 12th Avenue              33136   MIAMI                 FL
TWIN CITIES HOSPITAL                           2190 Highway 85 N                32578   NICEVILLE             FL
NORTH BEACH COMMUNITY                          2835 North Ocean Boulevard       33308   FORT LAUDERDALE       FL        03/31/90
MIAMI HEART INSTITUTE NORTH                    250 63rd Street                  33141   MIAMI                 FL        02/28/97
MIAMI HEART INSTITUTE SOUTH                    4701 N. Meridan Avenue           33140   MIAMI                 FL
COLUMBIA MED CTR - PENINSULA                   264 S Atlantic Avenue            32176   ORMOND BEACH          FL        11/11/99
JFK MEDICAL CENTER                             5301 South Congress Avenue       33462   ATLANTIS              FL
KISSIMMEE MEMORIAL                             200 Hilda St.                    34742   KISSIMMEE             FL        08/12/93
VICTORIA HOSPITAL                              955 N.W. Third St.               33128   MIAMI                 FL        09/30/93
EAST POINTE HOSPITAL                           1500 Lee Boulevard               33936   LEHIGH ACRES          FL
HAMILTON MEMORIAL HOSPITAL                     506 NW 4th St                    32052   JASPER                FL        05/11/99
MEDICAL CENTER OF OSCEOLA                      700 West Oak Street              34742   KISSIMMEE             FL
BARTOW MEMORIAL                                1239 E Main St                   33830   BARTOW                FL        05/11/99
NORTH OSKALOOSA MEDICAL CENTER                 151 Redstone Avenue, SE          32536   CRESTVIEW             FL        03/15/96
SANTA ROSA MEDICAL CENTER                      1450 Berry Mill Road             32570   MILTON                FL        05/17/96
AVENTURA HOSPITAL & MEDICAL CTR                20900 Biscayne Boulevard         33180   AVENTURA              FL
NORTH GABLES HOSPITAL                          5190 Southwest Eighth St.        33134   Coral Gables          FL        01/07/92
LAKE CITY MEDICAL CENTER                       1701 West Duval Street           32055   LAKE CITY             FL
MEDICAL CENTER OF SANFORD                      1401 W Seminole Blvd             32771   SANFORD               FL
WINTER PARK MEMORIAL HOSPITAL                  200 N. Lakemont                  32792   WINTER PARK           FL
SARASOTA DOCTORS HOSPITAL                      5731 Bee Ridge Road              34233   SARASOTA              FL
PLANTATION GENERAL HOSPITAL                    401 N.W. 42nd Avenue             33317   PLANTATION            FL
CLEARWATER COMMUNITY                           1521 East Druid Road             34616   CLEARWATER            FL        02/08/99
MEMORIAL HOSP. OF  JACKSONVILLE                3625 University Blvd South       32216   JACKSONVILLE          FL
ST. PETERSBURG MEDICAL CENTER                  6500 38 Ave N                    33710   ST PETERSBURG         FL
HUMANA HOSPITAL - SUN BAY                      3030 Sixth St. S                 33705   ST. PETERSBURG        FL        12/20/90
NORTHWEST REGIONAL HOSPITAL                    2801 North State Road # 7        33063   MARGATE               FL
NEW PORT RICHEY HOSPITAL                       5637 Marine Parkway              34652   NEW PORT RICHEY       FL
HUMANA HOSPITAL-SOUTH BROWARD                  5100 W Hallandale Beach Blvd     33023   HOLLYWOOD             FL        10/15/91

SPECIALTY HOSPITAL - JACKSONVILLE              4901 Richard Street              32207   JACKSONVILLE          FL
POMPANO BEACH MEDICAL CTR                      600 S.W. Third St.               33060   POMPANO BEACH         FL        12/17/98
SEMINOLE HOSPITAL                              9675 Seminole Blvd.              34642   SEMINOLE              FL        03/17/96
NORTH FLORIDA REGIONAL MED CTR                 6500 Newberry Road               32605   GAINESVILLE           FL
PALM BEACH REGIONAL                            2829 Tenth Ave. N                        LAKE WORTH            FL        11/30/96
DEERING HOSPITAL                               9333 S.W. 152nd Street           33157   MIAMI                 FL
KENDALL REGIONAL MEDICAL CTR                   11750 Bird Road                  33175   MIAMI                 FL
DADE CITY HOSPITAL                             13100 Fort King Road             33525   DADE CITY             FL
OCALA REGIONAL MEDICAL CENTER                  1431 SW First Street             32671   OCALA                 FL
BLAKE MEDICAL CENTER                           2020 59th Street West            34209   BRADENTON             FL
SEBASTIAN HOSPITAL                             13695 U S Highway 1              32958   SEBASTIAN             FL        09/01/93
ST. AUGUSTINE HOSPITAL                         U.S. Highway One South           32086   ST. AUGUSTINE         FL        10/31/91
SOUTHWEST FLORIDA REG CTR                      2727 Winkler Avenue              33901   FORT MYERS            FL
PARK MEDICAL CENTER                            818 S Main Lane                  32801   ORLANDO               FL        07/01/99
FORT WALTON BEACH MED CTR                      1000 Mar-Walt Drive              32547   FORT WALTON BEACH     FL
UNIVERSITY HOSPITAL & MED CTR                  7201 N. University Drive         33321   TAMARAC               FL
ORANGE PARK MEDICAL CENTER                     2001 Kingsley Avenue             32073   ORANGE PARK           FL
HUMANA WOMEN'S HOSPITAL                        3030 W. Buffalo Ave.             33607   TAMPA                 FL        02/28/93



                                                                               2

ATTACHMENT ONE

                             HCA HOSPITALS TO WHICH
                                COST REPORTING,
                             PHYSICIAN KICKBACK AND
                                  PPS TRANSFER
                                 RELEASES APPLY
                         (RELEASED LIABILITY RUNS ONLY
                       THROUGH HCA SALE OR CLOSURE DATE)



                                   MEDICARE
                                   PROVIDER                                                                             DATE OF HCA
FACILITY                           NUMBER                                                                               SALE OR
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE     CLOSURE
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
WESTSIDE REGIONAL MED CTR                      8201 W. Broward                  33324   PLANTATION            FL
MEDICAL CENTER OF DAYTONA                      400 North Clyde Morris
                                                 Boulevard                      32114   DAYTONA BEACH         FL        11/12/99
PEMBROKE PINES HOSPITAL                        2301 N University Drive          33024   PEMBROKE PINES        FL        07/01/95
WEST FLORIDA REGIONAL MED CTR                  8383 North Davis Highway         32523   PENSACOLA             FL
PUTNAM MEDICAL CENTER                          Highway 20 W Drawer 778          32177   PALATKA               FL
COLUMBIA - PALM BEACH - HOSPITAL               2201 45th Street                 33407   WEST PALM BEACH       FL
UNIVERSITY GENERAL HOSPITAL                    10200 Seminole Boulevard         34642   SEMINOLE              FL        05/16/97
FAWCETT MEMORIAL                               21298 Olean Blvd.                33952   PORT CHARLOTTE        FL
NORTHSIDE MEDICAL CENTER                       6000 49th Street North           33709   ST PETERSBURG         FL
EDWARD WHITE HOSPITAL                          2323 9th Avenue North            33713   ST PETERSBURG         FL
GULF COAST COMMUNITY HOSPITAL                  449 West 23 Street               32405   PANAMA CITY           FL
BRANDON REGIONAL MED CTR                       119 Oakfield Drive               33511   BRANDON               FL
LAWNWOOD REGIONAL MEDICAL                      1700 S. 23rd Street              34954   FORT PIERCE           FL
LARGO MEDICAL CENTER                           201 14 Street, S.W.              34649   LARGO                 FL
RAULERSON HOSPITAL                             1796 Highway 441 N               34973   OKEECHOBEE            FL
TALLAHASSEE COMMUNITY HOSPITAL                 2626 Capital Medical Boulevard   32308   TALLAHASSEE           FL
REG MED CTR AT BAYONET POINT                   14000 Fivay Road                 34667   HUDSON                FL
SOUTH BAY HOSPITAL                             4016 State Road 674              33570   SUN CITY CENTER       FL
MED CTR PORT ST. LUCIE                         1800 SE Tiffany Avenue           34952   PORT SAINT LUCIE      FL
SOUTH SEMINOLE COMMUNITY                       555 West State Road 434          32750   LONGWOOD              FL        11/30/97
OAK HILL REGIONAL MEDICAL CENTER               11375 Cortez Blvd Box 5300       34606   SPRING HILL           FL
ENGLEWOOD COMMUNITY                            700 Medical Boulevard            34223   ENGLEWOOD             FL
PALMS WEST HOSPITAL                            13001 State Road 80              33470   LOXAHATCHEE           FL
DESTIN HOSPITAL                                996 Airport Rd.                  32541   DESTIN                FL        08/31/94
GULF COAST HOSPITAL                            13681 Doctor's Way               33912   FORT MYERS            FL
HIGHLAND PARK GENERAL HOSP                     1660 NW 7th Court                33136   Miami                 FL        05/31/88
WEST LAKE HOSPITAL                             589 W. State Rd. 434             32750   LONGWOOD              FL        07/31/93
UNIVERSITY OF SOUTH FLORIDA                    3515 E Fletcher Ave              33613   TAMPA                 FL        02/19/93
UNIVERSITY PAVILION                            7201 North University Drive      33321   TAMARAC               FL        01/01/95
Behavioral Health Center                       11100 Northwest 27th Street      33172   Miami                 FL        09/02/99
Gulf Coast Hospital - SNU                      13681 Doctor's Way               33912   FORT MYERS            FL
Columbia Homecare - HHA                        4012 Gunn Highway, Suite 200     33624   Tampa                 FL
Columbia Homecare - HHA                        259 U.S. Highway 27, North       33870   Sebring               FL        11/07/98
PEACHTREE REGIONAL HOSPITAL                    60 Hospital Road                 30263   NEWNAN                GA
CARTERSVILLE MEDICAL CENTER                    960 Joe Frank Harris Parkway     30120   CARTERSVILLE          GA
NORTHLAKE REGIONAL MED CTR                     1455 Montreal Road               30084   TUCKER                GA
BARROW MEDICAL CENTER                          316 North Broad Street           30680   WINDER                GA        05/11/99
MURRAY MEDICAL CENTER                          707 Ellijay Road                 30705   CHATSWORTH            GA        03/06/98
POLK GENERAL                                   424 N Main St                    30125   CEDARTOWN             GA
FAIRVIEW PARK                                  200 Industrial Boulevard         31021   DUBLIN                GA
WORTH COMMUNITY HOSPITAL                       807 S. Isabella Street           31791   SYLVESTER             GA        03/31/88
PALMYRA MEDICAL CENTER                         2000 Palmyra Road                31701   ALBANY                GA
COLISEUM MEDICAL CENTER                        350 Hospital Drive               31217   MACON                 GA
MIDDLE GEORGIA HOSPITAL                        888 Pine Street                  31297   MACON                 GA        12/31/99
REDMOND REGIONAL MED CTR                       501 Redmond Road                 30165   ROME                  GA
METROPOLITAN HOSPITAL                          3223 Howell Mill Road NW         30327   ATLANTA               GA
WEST PACES MEDICAL CENTER                      3200 Howell Mill Road NW         30327   ATLANTA               GA        02/10/99
DUNWOODY MEDICAL CENTER                        4575 N Shallowford Rd            30338   ATLANTA               GA
AUGUSTA HOSPITAL                               3651 Wheeler Road                30909   AUGUSTA               GA
PARKWAY MEDICAL CENTER                         1000 Thornton Road               30122   LITHIA SPRINGS        GA
DOCTORS HOSPITAL - COLUMBUS                    616 19th Street                  31901   COLUMBUS              GA
LANIER PARK HOSPITAL                           675 White Sulpher Road           30501   GAINESVILLE           GA
EASTSIDE MEDICAL CENTER                        1700 Medical Way                 30078   SNELLVILLE            GA
HUGHSTON SPORTS MEDICINE HOSP                  100 Frist Court                  31909   COLUMBUS              GA
MACON NORTHSIDE HOSPITAL                       400 Charter Box 4627             31210   MACON                 GA
WHEELER COUNTY HOSPITAL                        Third Street Box 398             30428   GLENWOOD              GA        06/30/94
COLISEUM PSYCHIATRIC HOSPITAL                  340 Hospital Dr Box 9366         31201   MACON                 GA



                                                                               3

ATTACHMENT ONE

                             HCA HOSPITALS TO WHICH
                                COST REPORTING,
                             PHYSICIAN KICKBACK AND
                                  PPS TRANSFER
                                 RELEASES APPLY
                         (RELEASED LIABILITY RUNS ONLY
                       THROUGH HCA SALE OR CLOSURE DATE)



                                   MEDICARE
                                   PROVIDER                                                                             DATE OF HCA
FACILITY                           NUMBER                                                                               SALE OR
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE     CLOSURE
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
Amedysi HH of Georgia (Northlake)              9144 HWY. 278 East               30014   COVINGTON             GA        11/30/98
WEST VALLEY MEDICAL CENTER                     1717 Arlington Avenue            83605   CALDWELL              ID
EASTERN IDAHO REGIONAL MED                     3100 Channing Way                83404   IDAHO FALLS           ID

WALKER CENTER                                  1120A Montana Street             83330   GOODING               ID        08/30/91
MOUNTAIN RIVER                                 2280 East 25th Street            83401   IDAHO FALLS           ID        01/13/89
LAGRANGE MEMORIAL                              5101 S. Willow Springs Road      60525   LA GRANGE             IL        02/01/99
MICHAEL REESE                                  2929 South Ellis Avenue          60616   CHICAGO               IL        11/12/98
CHICAGO OSTEOPATHIC                            5200 South Ellis Avenue          60615   CHICAGO               IL
GRANT HOSPITAL                                 550 W Webster Ave                60614   CHICAGO               IL        11/12/98
HUMANA HOSPITAL - SPRINGFIELD                  5230 South 6th Street            62794   SPRINGFIELD           IL        08/31/88
HOFFMAN ESTATES MEDICAL CENTER                 1555 North Barrington Road       60194   HOFFMAN ESTATES       IL        02/01/99
CHICAGO LAKESHORE                              4840 N Marine Dr                 60640   CHICAGO               IL
RIVEREDGE HOSPITAL                             8311 West Roosevelt Road         60130   FOREST PARK           IL
BARCLAY HOSPITAL                               4700 North Clarendon Avenue      60640   CHICAGO               IL        02/01/97
WOODLAND HOSPITAL                              1650 Moon Lake Blvd              60194   HOFFMAN ESTATES       IL        02/01/99
TERRE HAUTE REGIONAL                           3901 South 7th Street            47802   TERRE HAUTE           IN
NORTH CLARK COMMUNITY                          2200 Market Street               47111   CHARLESTOWN           IN        12/31/91
WOMENS HOSPITAL - INDIANAPOLIS                 8111 Township Line Road          46260   INDIANAPOLIS          IN
WESLEY MEDICAL CENTER                          550 North Hillside               67214   WICHITA               KS
HALSTEAD HOSPITAL                              328 Poplar Street                67056   HALSTEAD              KS        05/11/99
BETHANY MEDICAL CENTER                         51 North 12th Street             66102   KANSAS CITY           KS        12/04/98
WESTERN PLAINS REGIONAL HOSP                   3001 Avenue A                    67801   DODGE CITY            KS        05/11/99
OVERLAND PARK REGIONAL MED CTR                 10500 Quivira Avenue             66215   OVERLAND PARK         KS        12/31/98
COLUMBIA HOSPITAL LEXINGTON                    310 Limestone Street             40508   LEXINGTON             KY
AUDUBON REG MED CENTER                         One Audubon Plaza                40217   LOUISVILLE            KY        09/01/98
MEADOWVIEW REGIONAL MED CTR                    989 West Highway 10              41056   MAYSVILLE             KY        05/11/99
SPRING VIEW HOSPITAL                           St. Mary Road                    40333   LEBANON               KY        09/01/98
BOURBON GENERAL                                9 Linville Drive                 40361   PARIS                 KY        05/11/99
LOGAN MEMORIAL HOSPITAL                        1625 S. Nashville Road           42276   RUSSELLVILLE          KY        05/11/99
GEORGETOWN (KY)                                1140 Lexington Road              40324   GEORGETOWN            KY        05/11/99
PINE LAKE REGIONAL                             1099 Medical Center Circle       42066   MAYFIELD              KY        05/11/99
VALLEY VIEW MEDICAL CENTER                     4604 US Hwy 60 West              42437   MORGANFIELD           KY        09/01/87
SUBURBAN MEDICAL CENTER                        4001 Dutchmans Lane              40207   LOUISVILLE            KY        09/01/98
GREENVIEW REGIONAL HOSPITAL                    1801 Ashley Circle               42104   BOWLING GREEN         KY
HOSPITAL FRANKFORT                             299 Kings Daughters Drive        40601   FRANKFORT             KY
THREE RIVERS HOSPITAL                          Highway 644 PO Box 769           41230   LOUISA                KY        05/28/93
LAKE CUMBERLAND REGIONAL                       305 Langdon Street               42503   SOMERSET              KY        05/11/99
SOUTHWEST HOSPITAL                             9820 Third St Rd                 40272   LOUISVILLE            KY        09/01/98
UNIVERSITY OF LOUISVILLE                       530 S. Jackson St.               40202   LOUISVILLE            KY        02/06/96
TRI-COUNTY COMMUNITY HOSPITAL                  1025 New Moody Lane              40031   LOUISVILLE            KY        09/30/92
Home Care of Louisville                        100 Mallard Creek Road,
                                                 Suite 200                      40207   LOUISVILLE            KY        10/16/98
DAUTERIVE HOSPITAL                             600 N. Lewis                     70560   NEW IBERIA            LA
SAVOY MEDICAL CENTER                           801 Poinciana Avenue             70554   MAMOU                 LA
RAPIDES REGIONAL MEDICAL CENTER                211 Fourth Street                71301   ALEXANDRIA            LA
SPRINGHILL MEDICAL CENTER                      2001 Humana Dr                   71075   SPRINGHILL            LA        05/11/99
WINN PARISH MEDICAL CENTER                     301 W. Boundary Street           71483   WINNFIELD             LA
ELWOOD MEDICAL CENTER                          1221 S. Clearview Parkway        70121   JEFFERSON             LA        12/31/96
AVOYELLES HOSPITAL                             Highway 1192 Bluetown Road       71351   MARKSVILLE            LA
OAKDALE COMMUNITY                              130 N. Hospital Drive            71463   OAKDALE               LA
HIGHLAND HOSPITAL                              1453 E. Bert Kouns Ind           71105   SHREVEPORT            LA        09/30/99
VILLE PLATTE MEDICAL CENTER                    800 E Main                       70586   VILLE PLATTE          LA        09/01/96
TULANE UNIVERSITY MED CTR                      1415 Tulane Avenue               70112   NEW ORLEANS           LA
LAKEVIEW MEDICAL CENTER                        95 East Fairway Drive            70433   COVINGTON             LA
LAKESIDE HOSPITAL                              4700 I-10 Service Road W         70001   METAIRIE              LA
DOCTORS HOSPITAL - OPELOUSAS                   5101 Hwy 67 South                70570   OPELOUSAS             LA        06/01/99
WOMEN'S & CHILDREN'S HOSPITAL                  4600 Ambassador Caffery Parkway  70508   LAFAYETTE             LA
NORTH MONROE HOSPITAL                          3421 Medical Park Drive          71203   MONROE                LA
WESTPARK HOSPITAL                              1900 S. Morrison Blvd            70403   HAMMOND               LA        01/08/93



                                                                               4

ATTACHMENT ONE

                             HCA HOSPITALS TO WHICH
                                COST REPORTING,
                             PHYSICIAN KICKBACK AND
                                  PPS TRANSFER
                                 RELEASES APPLY
                         (RELEASED LIABILITY RUNS ONLY
                       THROUGH HCA SALE OR CLOSURE DATE)



                                   MEDICARE
                                   PROVIDER                                                                             DATE OF HCA
FACILITY                           NUMBER                                                                               SALE OR
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE     CLOSURE
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
LAKELAND MEDICAL CENTER                        6000 Bullard Road                70128   NEW ORLEANS           LA
WOMEN & CHILDREN'S                             4200 Nelson Road                 70605   LAKE CHARLES          LA        05/11/99
MEDICAL CENTER OF BATON ROUGE                  17000 Medical Ctr Dr             70816   BATON ROUGE           LA        10/01/98
MEDICAL CENTER OF SW LOUISIANA                 3125 CANAL ST                    70112   LAFAYETTE             LA
RIVERVIEW MEDICAL CENTER                       1125 West LA Highway 30          70737   GONZALES              LA        05/11/99
DEPAUL HOSPITAL                                1040 Calhoun St.                 70118   NEW ORLEANS           LA        01/01/97
HUMANA HOSPITAL - BRENTWOOD                    1800 Irving Pl.                  71101   SHREVEPORT            LA        09/11/90
CYPRESS HOSPITAL                               302 Dulles Dr.                   70506   LAFAYETTE             LA        07/01/95
PARKLAND MEDICAL CENTER                        2414 Bunker Hill Dr.             70808   BATON ROGUE           LA        10/30/92
DEPAUL NORTHSHORE HOSPITAL                     De Paul Northshore Dr.           70434   COVINGTON             LA        02/07/92
METROWEST MEDICAL CENTER                       280 Irving Street                01701   Framingham            MA        03/15/99
VICKSBURG MEDICAL CENTER                       1111 North Frontage Road         39180   VICKSBURG             MS        11/01/98
NATCHEZ COMMUNITY                              129 Jeff Davis Blvd Box 1203     39120   NATCHEZ               MS        09/01/93
GARDEN PARK HOSPITAL                           1520 Broad Avenue                39501   GULFPORT              MS
DOCTORS HOSPITAL - SPRINGFIELD                 2828 North National St.          65801   SPRINGFIELD           MO        10/20/95
INDEPENDENCE REG HEALTH CTR                    1509 W. Truman Road              64050   INDEPENDENCE          MO        12/31/98
ST. PETERS HOSPITAL                            10 Hospital Drive                63376   ST. PETERS            MO        02/10/88
COLUMBIA HSPS NORTH & SOUTH                    3535 South National Road         65807   SPRINGFIELD           MO        08/01/98
RESEARCH PSYCHIATRIC CENTER                    2323 E 63rd St                   64130   KANSAS CITY           MO        05/11/99
SUNRISE HOSPITAL & MED CTR                     3186 S. Maryland Parkway         89109   LAS VEGAS             NV
SUNRISE MOUNTAIN VIEW HOSP                     3100 N. Tenaya Way               89128   LAS VEGAS             NV
TRUCKEE MEADOWS HOSPITAL                       1240 E. 9th Street               89512   Reno                  NV        07/01/93
MONTE VISTA HOSPITAL                           5900 W. Rochelle                 89103   LAS VEGAS             NV        07/01/93
PINEBROOK CENTER                               2100 E. Rancho Dr.               89520   Reno                  NV        05/01/90
PARKLAND MEDICAL CENTER                        One Parkland Drive               03038   DERRY                 NH
PORTSMOUTH REGIONAL HOSPITAL                   333 Borthwick Avenue             03801   PORTSMOUTH            NH
LOVELACE MEDICAL CENTER                        5400 Gibson Blvd SE              87108   ALBUQUERQUE           NM        03/31/90
MEDICAL CENTER - CARLSBAD                      2340 W Pierce                    88220   CARLSBAD              NM        05/11/99
LEA REGIONAL HOSPITAL                          5419 Lovington Highway           88240   HOBBS                 NM        05/11/99
HEIGHTS PSYCHIATRIC HOSPITAL                   103 Hospital Loop NE             87109   ALBUQUERQUE           NM        05/31/95
Charlotte Eye, Ear, and Throat
  Hospital                                     1600 E. Third Street             28204   CHARLOTTE             NC        05/31/87
RALEIGH COMMUNITY HOSPITAL                     3400 Wake Forest Road            27609   RALEIGH               NC        09/15/98
CAPE FEAR MEMORIAL                             5301 Wrightsville Avenue         28403   WILMINGTON            NC        11/01/98
HERITAGE MEMORIAL                              111 Hospital Drive               27866   TARBORO               NC        10/01/98
DAVIS MEDICAL CENTER                           218 Old Mocksville Road          28625   STATESVILLE           NC        11/19/98
PRESBYTERIAN ORTHOPEDIC HOSP                   1901 Randolph Road               28207   CHARLOTTE             NC        08/01/98
HUMANA HOSPITAL - GREENSBORO                   1200 N. Elm St.                  27401   GREENSBORO            NC        06/01/88
BRUNSWICK HOSPITAL                             1 Medical Center Drive           28462   SUPPLY                NC
HIGHSMITH-RAINEY MEMORIAL HOSP                 150 Robeson Street               28301   FAYETTEVILLE          NC        05/31/99
HOLLY HILL HOSPITAL                            3019 Falstaff Rd                 27610   WAKE FOREST           NC        06/30/95
ST VINCENT CHARITY HOSPITAL                    2351 E 22nd St                   44115   CLEVELAND             OH        06/12/99
ST. LUKE'S MEDICAL CENTER                      11311 Shaker Blvd                44104   CLEVELAND             OH        06/12/99
MERCY MEDICAL CENTER                           1320 Mercy Drive NW              44708   CANTON                OH        06/12/99
ST. JOHN WEST SHORE HOSPITAL                   29000 Center Ridge               44145   WESTLAKE              OH        06/12/99
ST. MARY'S MEDICAL CENTER                      305 South 5th Street,
                                                 P O Box 232                    73702   ENID                  OK        09/30/95
CLAREMORE REGIONAL HOSPITAL                    1202 Muskogee Street             74017   CLAREMORE             OK        05/11/99
TULSA REGIONAL MEDICAL CENTER                  744 West 9th Street              74127   TULSA                 OK        12/31/98
PRESBYTERIAN HOSPITAL                          700 N.E. 13th Street             73104   OKLAHOMA CITY         OK
SOUTHWESTERN MEDICAL                           5602 SW Lee Boulevard            73506   LAWTON                OK
DOCTORS HOSPITAL - TULSA                       2323 S. Harvard Ave.             74114   TULSA                 OK        12/31/98
EDMOND REGIONAL MED CTR                        One South Bryant                 73034   EDMOND                OK
BETHANY HEALTH CENTER                          51 North 12th Street             66102   BETHANY               OK        04/01/98
WAGONER COMMUNITY HOSPITAL                     1200 West Cherokee               74467   WAGONER               OK        05/11/99
SEILING HOSPITAL                               US Highway 60 Northeast          73663   SEILING               OK        03/25/88
SEMINOLE MEDICAL CENTER                        2401 Wrangler Boulevard          74686   SEMINOLE              OK
SPECIALTY HOSPITAL - TULSA                     2408 East 81St Street,
                                                 Floors 24 & 25                 74137   TULSA                 OK        12/11/98
REHABILITATION INSTITUTE - OK                  700 NW 7TH Street                73102   OKLAHOMA CITY         OK        06/07/88
SPECIALTY HOSPITAL - TULSA                     2408 East 81St Street,
                                                 Floors 24 & 25                 74137   TULSA                 OK        08/31/94
DOUGLAS MEDICAL CENTER                         738 West Harvard Boulevard       97470   ROSEBURG              OR        05/11/99
WILLAMETTE VALLEY MED CTR                      2700 Three Mile Lane             97128   MCMINNVILLE           OR        05/11/99
PROVIDENCE HOSPITAL                            2435 Forrest Drive               29204   COLUMBIA              SC
COLLETON REGIONAL HOSPITAL                     501 Robertson Boulevard          29488   WALTERBORO            SC



                                                                               5

ATTACHMENT ONE

                             HCA HOSPITALS TO WHICH
                                COST REPORTING,
                             PHYSICIAN KICKBACK AND
                                  PPS TRANSFER
                                 RELEASES APPLY
                         (RELEASED LIABILITY RUNS ONLY
                       THROUGH HCA SALE OR CLOSURE DATE)



                                   MEDICARE
                                   PROVIDER                                                                             DATE OF HCA
FACILITY                           NUMBER                                                                               SALE OR
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE     CLOSURE
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
MARLBORO PARK                                  204 N. Marlboro Street           29512   BENNETTSVILLE         SC        05/01/95
CHESTERFIELD GENERAL                           Highway 9 Box 151                29520   CHERAW                SC        05/01/95
DOCTORS HOSPITAL - SPARTANBURG                 389 Serpentine Dr.               29303   SPARTANBURG           SC        07/31/94
TRIDENT MEDICAL CENTER                         9330 Medical Plaza Drive         29406   CHARLESTON            SC
AIKEN REGIONAL MEDICAL CENTER                  202 University Parkway           29801   AIKEN                 SC        07/07/95
GRAND STRAND REGIONAL MED CTR                  809 82nd Parkway                 29572   MYRTLE BEACH          SC
AURORA PAVILION                                P.O. Box 1073                    29802   AIKEN                 SC        07/31/93
NASHVILLE MEMORIAL HOSPITAL                    612 West Due West Avenue         37115   MADISON               TN
SYCAMORE SHOALS HOSPITAL                       1501 West Elk Avenue             37643   ELIZABETHTON          TN        09/01/98
HILLSIDE HOSPITAL                              1265 E College Street            38478   PULASKI               TN        05/11/99
EDGEFIELD HOSPITAL                             610 Gallatin Road                37206   NASHVILLE             TN        08/31/90
HORIZON MEDICAL CENTER                         111 Highway 70 E                 37055   DICKSON               TN
SOUTHERN TENNESSEE MEDICAL                     185 Hospital Road                37398   WINCHESTER            TN        05/11/99
VOLUNTEER GENERAL HOSPITAL                     161 Mount Pelia Rd               38237   MARTIN                TN        06/01/98
SOUTH PITTSBURG HOSPITAL                       210 W. 12th Street               37380   SOUTH PITTSBURG       TN
LAKEWAY REGIONAL                               726 McFarland St                 37814   MORRISTOWN            TN        05/28/93
ATHENS COMMUNITY                               1114 West Madison                37371   ATHENS                TN
NORTH PARK                                     2051 Hamil Road                  37343   HIXSON                TN        05/01/88
JOHNSON CITY SPECIALTY HOSPITAL                203 E. Watauga Avenue            37601   JOHNSON CITY          TN        08/31/98
HUMBOLDT CEDAR CREST                           3525 Chere Carol Road            38343   HUMBOLDT              TN        10/21/89
SMYRNA HOSPITAL                                Hwy. 41S. P.O. Box 306           37167   SMYRNA                TN        02/20/88
HUMANA HOSPITAL - MCFARLAND                    500 Park Ave.                    37087   LEBANON               TN        06/01/92
BENTON COMMUNITY                               Hospital Street                  38320   CAMDEN                TN        10/05/90
DEKALB GENERAL                                 W. Main Street                   37166   SMITHVILLE            TN        07/31/92
TRINITY HOSPITAL                               353 Main Street                  37061   ERIN                  TN        05/11/99
DONELSON HOSPITAL (SUMMIT)                     5655 Frist Blvd                  37076   HERMITAGE             TN
RIVER PARK HOSPITAL                            1559 Sparta Road                 37110   MCMINNVILLE           TN
PARKRIDGE MEDICAL CENTER                       2333 McCallie Road               37404   CHATTANOOGA           TN
CENTENNIAL MEDICAL CENTER
  (Park View)                                  2300 Patterson Street            37203   NASHVILLE             TN
DIAGNOSTIC CENTER                              2412 McCallie Ave                37404   CHATTANOOGA           TN        10/14/88
WESTSIDE HOSPITAL                              2208 Patterson St.               37203   NASHVILLE             TN        07/01/89
PARK WEST MEDICAL CENTERS                      9352 Park West Blvd              37919   Knoxville             TN        08/24/90
HAYWOOD PARK HOSPITAL                          2545 N Washington Ave            38012   BROWNSVILLE           TN        04/01/88
CROCKETT HOSPITAL                              U.S. Highway 43 South            38464   LAWRENCEBURG          TN        05/11/99
INDIAN PATH MEDICAL CENTER                     2000 Brookside Road              37660   KINGSPORT             TN        08/31/98
EAST RIDGE HOSPITAL                            941 Spring Creek Road            37412   EAST RIDGE            TN        06/07/96
NORTH SIDE HOSPITAL                            401 Princeton Road               37601   JOHNSON CITY          TN        09/01/98
SMITH COUNTY MEMORIAL                          158 Hospital Drive               37030   CARTHAGE              TN        05/11/99
LIVINGSTON REGIONAL                            315 Oak Street                   38570   LIVINGSTON            TN        05/11/99
REGIONAL HOSPITAL OF JACKSON                   367 Hospital Boulevard           38303   JACKSON               TN        06/01/98
HENDERSONVILLE HOSPITAL                        355 New Shackle Island Road      37075   HENDERSONSVILLE       TN
SOUTHERN HILLS MEDICAL CENTER                  391 Wallace Road                 37211   NASHVILLE             TN
STONES RIVER HOSPITAL                          Route 1, Dolittle Road           37190   WOODBURY              TN        10/05/99
CHEATAM MEDICAL CENTER                         313 North Main Street            37015   Ashland City          TN
WHITWELL MEDICAL CENTER                        101 N. Maple Street              37397   WHITWELL              TN        10/17/97
Northeast Tennessee Rehab                      400 State of Franklin Road       37604   Johnson City          TN        08/31/98
VALLEY PSYCHIATRIC HOSPITAL                    Shallowford Rd.                  37421   CHATTANOOGA           TN        08/31/96
INDIAN PATH PAVILION                           2300 Pavilion Dr.                37660   KINGSPORT             TN        09/27/96

PSYCHIATRIC HOSP AT VANDERBILT                 1601 23rd Avenue South           37220   NASHVILLE             TN        04/30/99
GULF COAST HOSPITAL                            2800 Garth Rd.                   77521   BAYTOWN               TX        09/01/92
ST. JOSEPH HOSPITAL                            1401 South Main Street           76104   FORT WORTH            TX        07/01/95
WESTBURY                                       5556 Gasmer Rd.                  77035   HOUSTON               TX        07/31/95
GILMER MEDICAL CENTER                          712 N. Wood St.                  75644   GILMER                TX        10/28/95
SOUTHSIDE COMMUNITY                            4626 Weber Rd.                   78411   CORPUS CHRISTI        TX        07/18/93
NORTH HILLS MEDICAL CENTER                     4401 Booth Calloway Road         76180   NORTH RICHLAND HILLS  TX
MEDICAL CENTER DALLAS SW                       2929 S Hampton Rd                75224   DALLAS                TX
BAYSHORE MEDICAL CENTER                        4000 Spencer  Highway            77504   PASADENA              TX
MEDICAL CENTER - PAMPA                         1 Medical Plaza                  79066   PAMPA                 TX        05/11/99
MEDICAL CENTER -  WEST                         1801 North Oregon                79902   EL PASO               TX



                                                                               6

ATTACHMENT ONE

                             HCA HOSPITALS TO WHICH
                                COST REPORTING,
                             PHYSICIAN KICKBACK AND
                                  PPS TRANSFER
                                 RELEASES APPLY
                         (RELEASED LIABILITY RUNS ONLY
                       THROUGH HCA SALE OR CLOSURE DATE)



                                   MEDICARE
                                   PROVIDER                                                                             DATE OF HCA
FACILITY                           NUMBER                                                                               SALE OR
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE     CLOSURE
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
HUMANA HOSPITAL - SOUTHMORE                    906 E Southmore                  77502   PASADENA              TX        09/30/90
DOCTORS REGIONAL MED CTR                       3315 South Alameda               78411   CORPUS CHRISTI        TX        05/01/99
EAST HOUSTON MEDICAL CENTER                    13111 East Freeway               77015   HOUSTON               TX        08/31/98
NORTHWEST HOSPITAL - TEXAS                     13725 Farm Rd 624, PO Box 9917   78469   CORPUS CHRISTI        TX
NORTHEAST COMMUNITY                            1301 Airport Freeway             76021   BEDFORD               TX        05/31/96
DETAR HOSPITAL                                 506 E. San Antonio               77902   VICTORIA              TX        05/11/99
COLONIAL HOSPITAL                              502 W College St                 75160   TERRELL               TX        12/31/92
CORPUS CHRISTI DOCTORS HOSPITAL                1502 Tarleton                    78415   CORPUS CHRISTI        TX        10/18/90
MAINLAND HOSPITAL                              519 Ninth Ave. N.                77590   TEXAS CITY            TX        08/31/93
GULF COAST MEDICAL CENTER                      1400 HWY 59 Bypass               77488   WHARTON               TX        05/11/99
CONROE REGIONAL MEDICAL CTR                    504 Medical Center Blvd          77305   CONROE                TX
DOCTORS HOSPITAL - EAST LOOP                   9339 North Loop East             77029   HOUSTON               TX        02/29/96
MED CTR COLLEGE STATION                        1604 Rock Prairie Road           77840   COLLEGE STATION       TX        05/11/99
ROSEWOOD MEDICAL CENTER                        9200 Westheimer Road             77063   HOUSTON               TX
SUNBELT REGIONAL MED CTR - EAST                15101 East Freeway               77530   CHANNELVILLE          TX        08/31/88
SAN ANGELO COMMUNITY MED CTR                   3501 Knickerbocker Rd            76904   SAN ANGELO            TX        05/11/99
ALICE PHYS & SURGEONS HOSP                     300 East Third Street            78332   ALICE                 TX        05/11/99
SAM HOUSTON MEMORIAL                           1615 Hillendahl                  77055   HOUSTON               TX        07/01/94
SOUTHWEST TEXAS METHODIST                      7700 Floyd Curl                  78229   SAN ANTONIO           TX
MEDICAL CENTER - SHERMAN                       1111 Gallagher Road              75090   SHERMAN               TX        05/11/99
WYSONG MEDICAL CENTER                          130 S. Central Expressway        75069   MCKINNEY              TX        01/10/93
NORTH TEXAS MEDICAL CENTER                     1800 North Graves Street         75069   MCKINNEY              TX
FLOW MEMORIAL HOSPITAL                         1310 Scripture Street            76207   DENTON                TX        09/26/88
BELLAIRE MEDICAL CENTER                        5314 Dashwood Drive              77081   HOUSTON               TX
ST. DAVID'S MEDICAL CENTER                     919 E. 32nd Street               78705   AUSTIN                TX
NAVARRO REGIONAL HOSPITAL                      3201 West Highway 22             75110   CORSICANA             TX        05/11/99
WOODLAND HEIGHTS MED CTR                       500 Gaslight Boulevard           75904   LUFKIN                TX        05/11/99
DIAGNOSTIC CENTER HOSPITAL                     6447 Main Street                 77030   HOUSTON               TX        08/31/93
MAINLAND MEDICAL CENTER                        6801 EF Lowry Expressway         77591   TEXAS CITY            TX
HUMANA HOSPITAL - BAYTOWN                      1700 James Bowie Drive Box 1451  77520   BAYTOWN               TX        12/11/90
ALVIN MEDICAL CENTER                           301 Medic Lane                   77511   ALVIN                 TX        01/01/97
NORTH HOUSTON MEDICAL CENTER                   232 West Parker Road             77076   HOUSTON               TX        07/22/99
HEIGHTS HOSPITAL                               1917 Ashland St.                 77008   HOUSTON               TX        08/31/94
NORTH HOUSTON MEDICAL CENTER                   5815 Airline Drive               77076   AIRLINE               TX        08/31/96
ABILENE REGIONAL MEDICAL CENTER                6250 HWY 83-84 AT Antilley Road  79606   ABILENE               TX        05/01/94
SILSBEE DOCTORS HOSPITAL                       Highway 418 West                 77656   SILSBEE               TX        05/11/99
BROWNWOOD REGIONAL MED CTR                     1501 Burnet Drive                76801   BROWNWOOD             TX        05/11/99
NORTH BAY HOSPITAL                             1711 West Wheeler Avenue         78336   ARKANSAS PASS         TX
CLEAR LAKE REG MED CENTER                      500 Medical Center Boulevard     77598   WEBSTER               TX
SPRING BRANCH MEDICAL CENTER                   8850 Long Point Road             77055   HOUSTON               TX
SAN ANTONIO REGIONAL HOSPITAL                  8026 Floyd Curl                  78229   SAN ANTONIO           TX
METROPOLITAN METHODIST HOSP                    1310 McCollough Avenue           78212   SAN ANTONIO           TX        07/01/99
MEDICAL CENTER -  DENTON                       4405 N Interstate 35             76207   DENTON                TX
DOCTORS HOSPITAL - CONROE                      3205 West Davis                  77035   CONROE                TX        06/16/95
DOCTORS HOSPITAL - LAREDO                      500 E Mann Rd                    78041   LAREDO                TX        05/11/99
WEST HOUSTON MEDICAL CENTER                    12141 Richmond Avenue            77082   HOUSTON               TX
MEDICAL CENTER - EAST                          10301 Gateway West               79925   EL PASO               TX
MEDICAL CITY DALLAS                            7777 Forest Lane                 75230   DALLAS                TX
MEDICAL CENTER - PLANO                         3901 W 15Th St                   75075   PLANO                 TX
MEDICAL CENTER  HOSPITAL DEL ORO               8081 Green Briar                 77054   HOUSTON               TX        08/18/95
VALLEY REGIONAL MEDICAL CENTER                 1 Ted Hunt Boulevard             78521   BROWNSVILLE           TX
BEAUMONT MEDICAL CENTER                        3080 College Street              77701   BEAUMONT              TX        05/11/99
MEDICAL CENTER - LEWISVILLE                    500 West Main Street             75057   LEWISVILLE            TX
PLAZA MEDICAL CENTER - FT. WORTH               900 Eighth Avenue                76104   FORT WORTH            TX
WOMENS HOSPITAL - TEXAS                        7600 Fannin Street               77054   HOUSTON               TX
MEDICAL CENTER - ARLINGTON                     3301 Matlock Road                76015   ARLINGTON             TX
MEDICAL CENTER  - TERRELL                      1551 HWY 34 S                    75160   TERRELL               TX        05/11/99
EL CAMPO MEMORIAL HOSPITAL                     303 Sandy Corner Road            77437   EL CAMPO              TX        01/31/96



                                                                               7

ATTACHMENT ONE

                             HCA HOSPITALS TO WHICH
                                COST REPORTING,
                             PHYSICIAN KICKBACK AND
                                  PPS TRANSFER
                                 RELEASES APPLY
                         (RELEASED LIABILITY RUNS ONLY
                       THROUGH HCA SALE OR CLOSURE DATE)



                                   MEDICARE
                                   PROVIDER                                                                             DATE OF HCA
FACILITY                           NUMBER                                                                               SALE OR
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE     CLOSURE
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
MEDICAL ARTS HOSPITAL - WEBSTER                6161 Harry Hines Boulevard       75235   WEBSTER               TX        03/13/98
LONGVIEW REGIONAL HOSPITAL                     2901 N 4th Street                75605   LONGVIEW              TX        05/11/99
MEDICAL ARTS HOSP - TEXARKANA                  2501 College Dr.                 75501   TEXARKANA             TX        12/31/97
KATY MEDICAL CENTER                            5602 Medical Center Drive        77494   KATY                  TX        10/01/99
RIO GRANDE REGIONAL HOSPITAL                   101 East Ridge Road              78503   MCALLEN               TX
ST.  DAVID'S SOUTH HOSPITAL                    901 West Ben White Blvd          78704   AUSTIN                TX
MEDICAL CENTER - LANCASTER                     2600 W Pleasant Run Rd           75146   LANCASTER             TX
FORT BEND MEDICAL CENTER                       3803 F M 1092 at HWY 6           77459   MISSOURI CITY         TX        10/01/99
ST. DAVID'S HOSP ROUND ROCK                    2400 Round Rock Ave              78681   ROUND ROCK            TX
MANSFIELD HOSPITAL                             1802 Highway 157 North           76063   MANSFIELD             TX        12/21/89
WOMENS & CHILDREN'S HOSPITAL                   8109 Fredericksburg Road         78229   SAN ANTONIO           TX        01/01/97
NORTHEAST METHODIST HOSPITAL                   12412 Judson Road                78233   SAN ANTONIO           TX
DENTON COMMUNITY                               207 N Bonnie Brae                76201   DENTON                TX        11/13/96
TOPS SURGICAL SPECIALTY HOSPITAL               17080 Red Oak Dr Box 73409       77090   HOUSTON               TX        07/01/99
KINGWOOD MEDICAL CENTER                        22999 US HWY 59 North            77339   KINGWOOD              TX
METHODIST AMBULATORY SURGICAL                  9150 Huebner Rd Suite 900        78240   SAN ANTONIO           TX
SURGICARE SPECIALTY HOSPITAL                   718 Elizabeth St                 78404   CORPUS CHRISTI        TX
BAY AREA MEDICAL CENTER                        7101 S. Padre Island Drive       78412   CORPUS CHRISTI        TX        05/01/99
PANHANDLE SURGICAL HOSPITAL                    7100 West 9th Ave                79106   AMARILLO              TX        05/11/99
TEXAS ORTHOPEDIC HOSPITAL                      7401 S Main                      77030   HOUSTON               TX
AUSTIN DIAGNOSTIC MEDICAL CTR                  12221 Mopac Expressway North     78758   AUSTIN                TX
MEDICAL CENTER - LAS COLINAS                   6800 N. MacArthur Blvd           75039   Irving                TX

SPECIALTY HOSPITAL OF HOUSTON                  5556 Gasmer                      77035   HOUSTON               TX        04/05/95

SPECIALTY HOSP OF MEDICAL ARTS                 6161 Harry Hines Blvd            75235   DALLAS                TX        03/13/98
REHABILITATION HOSPITAL SOUTH TX               6226 Saratoga Blvd               78414   CORPUS CHRISTI        TX
ST. DAVID'S REHABILITATION                     1005 E 32nd St                   78705   AUSTIN                TX
SPECIALTY HOSPITAL OF AUSTIN                   4207 Burnet Road                 78756   AUSTIN                TX        03/01/95
CHAMPIONS TREATMENT CENTER                     14320 Walters Road               77014   HOUSTON               TX        06/15/97
BEAUMONT MEDICAL & SURGICAL                    3250 Fannin St.                  77701   BEAUMONT              TX        01/01/95
BELLE PARK HOSPITAL                            4427 Belle Park Dr.              77072   HOUSTON               TX        08/27/93
GREENLEAF PSYCHIATRIC                          2000 Greens Prarie Rd            77845   COLLEGE STATION       TX        04/19/93
RED RIVER HOSPITAL                             1505 8th St                      76301   WICHITA FALLS         TX        10/01/93
HOUSTON INTERNATIONAL HOSPITAL                 6441 Main St.                    77030   HOUSTON               TX        11/30/90
SUN VALLEY REGIONAL HOSPITAL                   1155 Idaho St.                   79902   EL PASO               TX        08/30/92
SHOAL CREEK HOSPITAL                           3501 Mills Avenue                78731   Austin                TX        07/01/93
BRAZOS CENTER FOR PSYCHIATRY                   301 Londonberry Dr               76702   WACO                  TX        12/21/92
BAYVIEW PSYCHIATRIC CENTER                     6226 Saratoga Blvd               78414   CORPUS CHRISTI        TX        05/01/99
GULF PINES PSYCHIATRIC HOSPITAL                205 Hollow Tree Lane             77090   HOUSTON               TX        10/01/93
HILL COUNTRY HOSPITAL                          8205 Palisades Dr.               78233   SAN ANTONIO           TX        03/01/92
RICHLAND HOSPITAL                              7501 Glenview Dr.                76180   NORTH RICHLAND HILLS  TX        07/01/93
ST. DAVID'S PAVILION                           919 East 32nd Street             78765   AUSTIN                TX
DEER PARK HOSPITAL                             4525 Glenwood                    77536   DEER PARK             TX        02/12/93
Willow Creek Hosptial                          7000 Highway 287 S at Eden Rd    76017   ARLINGTON             TX        08/17/93
Hearthstone Home Health, Inc.                  2900 North Loop West, suite 580  77092   Houston               TX        10/16/98
Lifeway Home Health Care                       2028 East Ben White Blvd.,
                                                 Suite 450                      78741   Austin                TX
SALT LAKE REGIONAL                             1050 East South Temple           84102   SALT LAKE CITY        UT        04/30/95
OGDEN REGIONAL MEDICAL CENTER                  5475 South 500 East              84405   OGDEN                 UT
PIONEER VALLEY HOSPITAL                        3460 S. Pioneer Parkway          84120   WEST VALLEY CITY      UT        05/17/96
CASTLEVIEW HOSPITAL                            300 N Hospital Drive             84501   PRICE                 UT        05/11/99
MOUNTAIN VIEW HOSPITAL                         1000 East Highway 6              84651   PAYSON                UT
BRIGHAM CITY COMMUNITY                         900 South 500 West               84302   BRIGHAM CITY          UT
ASHLEY VALLEY MED CENTER                       151 W. 200 N                     84078   VERNAL                UT        05/11/99
DAVIS MEDICAL CENTER                           1600 West Antelope Drive         84041   LAYTON                UT        05/17/96



                                                                               8

ATTACHMENT ONE

                             HCA HOSPITALS TO WHICH
                                COST REPORTING,
                             PHYSICIAN KICKBACK AND
                                  PPS TRANSFER
                                 RELEASES APPLY
                         (RELEASED LIABILITY RUNS ONLY
                       THROUGH HCA SALE OR CLOSURE DATE)



                                   MEDICARE
                                   PROVIDER                                                                             DATE OF HCA
FACILITY                           NUMBER                                                                               SALE OR
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE     CLOSURE
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
LAKEVIEW HOSPITAL                              630 E. Medical Drive             84010   BOUNTIFUL             UT
ST. MARKS HOSPITAL                             1200 East 3900 South             84124   SALT LAKE CITY        UT
JORDAN VALLEY                                  3580 West 9000 South             84088   WEST JORDAN           UT        03/01/96
PENTAGON CITY HOSPITAL                         2455 Army-Navy Drive             22206   ARLINGTON             VA        09/02/99
HUMANA HOSPITAL - RICHMOND                     7700 Parham Rd                   23294   RICHMOND              VA        12/10/91
JOHN RANDOLPH MEDICAL CENTER                   411 West Randolph Road           23860   HOPEWELL              VA
JOHNSTON-WILLIS HOSPITAL                       1401 Johnston-Willis Drive       23235   RICHMOND              VA        01/01/96
LEWIS-GALE MEDICAL CENTER                      1900 Electric Road               24153   SALEM                 VA
ARLINGTON HOSPITAL                             1701 N George Mason Drive        22205   ARLINGTON             VA        09/30/99
CLINCH VALLEY MEDICAL CENTER                   2949 West Front Street           24641   RICHLANDS             VA
RETREAT HOSPITAL                               2621 Grove Avenue                23220   RICHMOND              VA
NORTHERN VIRGINIA DOCTORS                      601 S. Carlin Springs Road       22204   ARLINGTON             VA        05/17/95
RESTON HOSPITAL CENTER                         1850 Town Center Pkwy
                                                 PO Box 3220                    22090   RESTON                VA
MONTGOMERY REGIONAL                            3700 South Main Street           24060   BLACKSBURG            VA
CHIPPENHAM MEDICAL CENTER                      7101 Jahnke Road                 23225   RICHMOND              VA
PULASKI COMMUNITY HOSPITAL                     2400 Lee Highway                 24301   PULASKI               VA
HENRICO DOCTORS HOSPITAL                       1602 Skipwith Road               23229   RICHMOND              VA
HUMANA HOSPITAL - BAYSIDE                      800 Independence Blvd            23455   VIRGINIA BEACH        VA        07/31/91
ALLEGHANY REGIONAL HOSPITAL                    1 ARH Lane                       24457   LOWMOOR               VA
PENINSULA PSYCHIATRIC HOSPITAL                 2244 Executive Drive             23666   HAMPTON               VA
LEWIS-GALE PSYCHIATRIC HOSPITAL                1902 Braeburn Dr.                24153   SALEM                 VA        04/01/96
POPLAR SPRINGS HOSPITAL                        350 Poplar Drive  PO Box 3060    23805   PETERSBURG            VA        02/15/97
DOMINION HOSPITAL                              2960 Sleepy Hollow Rd            22044   FALLS CHURCH          VA
LAKEVIEW HOSPITAL                              S. 19th St. And Union Sts.       98405   TACOMA                WA        08/31/89
CAPITAL MEDICAL CENTER                         3900 Capitol Mall Drive SW       98502   OLYMPIC               WA
GREENBRIER VALLEY MED CTR                      202 Maplewood Avenue             24970   RONCEVERTE            WV        11/19/98
ST FRANCIS HOSPITAL                            333 Laidley                      25301   CHARLESTON            WV
ST. JOSEPH HOSPITAL                            1824 Murdock Ave                 26101   PARKERSBURG           WV
BECKLEY HOSPITAL                               1007 South Oakwood Avenue        25801   BECKLEY               WV        07/09/97
ST. LUKE'S HOSPITAL                            1333 Southview Drive             24701   BLUFIELD              WV        01/31/99
RALEIGH GENERAL HOSPITAL                       1710 Harper Road                 25801   BECKLEY               WV
PUTMAN GENERAL HOSPITAL                        1400 Hospital Drive              25526   HURRICANE             WV
RIVER PARK HOSPITAL
                                               1230 Sixth Avenue                25701   HUNTINGTON            WV
PARKWAY REGIONAL                               6001 Research Park Blvd.         53719   MADISON               WI        12/15/93
RIVERTON MEMORIAL                              2100 W. Sunset Drive             82501   RIVERTON              WY        05/11/99
SPALDING - CHEYENNE REHAB                      2600 East 18th Street            82001   CHEYENNE              WY        05/31/99



                                                                               9

ATTACHMENT TWO

                             HCA HOSPITALS TO WHICH
                            WOUND CARE RELEASES APPLY
                         (RELEASED LIABILITY RUNS ONLY
                       THROUGH HCA SALE OR CLOSURE DATE)



                                   MEDICARE
                                   PROVIDER                                                                             DATE OF HCA
FACILITY                           NUMBER                                                                               SALE OR
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE     CLOSURE
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
MONTGOMERY REGIONAL MED CTR                    301 South Ripley Street          36104   MONTGOMERY            AL         09/01/98
MEDICAL  CENTER - PHOENIX                      1947 East Thomas Rd              85016   PHOENIX               AZ         05/11/99
SAN LEANDRO HOSPITAL                           13855 E. 14th Street             94578   SAN LEANDRO           CA         05/11/99
MISSION BAY HOSPITAL                           3030 Bunker Hill Street          92109   SAN DIEGO             CA         05/11/99
PRESBYTERIAN ST LUKES MED CTR                  1719 E 19th Ave                  80218   DENVER                CO
MIAMI HEART INSTITUTE SOUTH                    4701 N. Meridan Avenue           33140   MIAMI                 FL
JFK MEDICAL CENTER                             5301 South Congress Avenue       33462   ATLANTIS              FL
MEDICAL CENTER OF OSCEOLA                      700 West Oak Street              34742   KISSIMMEE             FL
BARTOW MEMORIAL                                1239 E Main St                   33830   BARTOW                FL         05/11/99
AVENTURA HOSPITAL & MEDICAL CTR                20900 Biscayne Boulevard         33180   AVENTURA              FL
MEDICAL CENTER OF SANFORD                      1401 W Seminole Blvd             32771   SANFORD               FL
SARASOTA DOCTORS HOSPITAL                      5731 Bee Ridge Road              34233   SARASOTA              FL
CLEARWATER COMMUNITY                           1521 East Druid Road             34616   CLEARWATER            FL         02/08/99
MEMORIAL HOSP. OF  JACKSONVILLE                3625 University Blvd South       32216   JACKSONVILLE          FL
ST. PETERSBURG MEDICAL CENTER                  6500 38 Ave N                    33710   ST PETERSBURG         FL
NORTHWEST REGIONAL HOSPITAL                    2801 North State Road # 7        33063   MARGATE               FL
NORTH FLORIDA REGIONAL MED CTR                 6500 Newberry Road               32605   GAINESVILLE           FL
DEERING HOSPITAL                               9333 S.W. 152nd Street           33157   MIAMI                 FL
KENDALL REGIONAL MEDICAL CTR                   11750 Bird Road                  33175   MIAMI                 FL
OCALA REGIONAL MEDICAL CENTER                  1431 SW First Street             32671   OCALA                 FL
SOUTHWEST FLORIDA REG CTR                      2727 Winkler Avenue              33901   FORT MYERS            FL
PARK MEDICAL CENTER                            818 S Main Lane                  32801   ORLANDO               FL         07/01/99
UNIVERSITY HOSPITAL                            7201 N. University Drive         33321   TAMARAC               FL
ORANGE PARK MEDICAL CENTER                     2001 Kingsley Avenue             32073   ORANGE PARK           FL
WESTSIDE REGIONAL MED CTR                      8201 W. Broward                  33324   PLANTATION            FL
MEDICAL CENTER OF DAYTONA                      400 North Clyde Morris
                                                 Boulevard                      32114   DAYTONA BEACH         FL         11/12/99
WEST FLORIDA REGIONAL MED CTR                  8383 North Davis Highway         32523   PENSACOLA             FL
PALM BEACH - HOSPITAL                          2201 45th Street                 33407   WEST PALM BEACH       FL
FAWCETT MEMORIAL                               21298 Olean Blvd.                33952   PORT CHARLOTTE        FL
GULF COAST COMMUNITY HOSPITAL                  449 West 23 Street               32405   PANAMA CITY           FL
BRANDON REGIONAL MED CTR                       119 Oakfield Drive               33511   BRANDON               FL
TALLAHASSEE COMMUNITY HOSPITAL                 2626 Capital Medical Boulevard   32308   TALLAHASSEE           FL
REG MED CTR AT BAYONET POINT                   14000 Fivay Road                 34667   HUDSON                FL
MED CTR PORT ST. LUCIE                         1800 SE Tiffany Avenue           34952   PORT SAINT LUCIE      FL
ENGLEWOOD COMMUNITY                            700 Medical Boulevard            34223   ENGLEWOOD             FL         02/10/99
WEST PACES MEDICAL CENTER                      3200 Howell Mill Road NW         30327   ATLANTA               GA
EASTSIDE MEDICAL CENTER                        1700 Medical Way                 30078   SNELLVILLE            GA         12/04/98
BETHANY MEDICAL CENTER                         51 North 12th Street             66102   KANSAS CITY           KS
COLUMBIA HOSPITAL LEXINGTON                    310 Limestone Street             40508   LEXINGTON             KY         05/11/99
PINE LAKE REGIONAL                             1099 Medical Center Circle       42066   MAYFIELD              KY         09/01/98
SUBURBAN MEDICAL CENTER                        4001 Dutchmans Lane              40207   LOUISVILLE            KY
GREENVIEW REGIONAL HOSPITAL                    1801 Ashley Circle               42104   BOWLING GREEN         KY
PARKLAND MEDICAL CENTER                        One Parkland Drive               03038   DERRY                 NH
PORTSMOUTH REGIONAL HOSPITAL                   333 Borthwick Avenue             03801   PORTSMOUTH            NH         11/01/98
CAPE FEAR MEMORIAL                             5301 Wrightsville Avenue         28403   WILMINGTON            NC         11/19/98
DAVIS MEDICAL CENTER                           218 Old Mocksville Road          28625   STATESVILLE           NC         08/01/98
PRESBYTERIAN ORTHOPEDIC HOSP                   1901 Randolph Road               28207   CHARLOTTE             NC
PROVIDENCE HOSPITAL                            2435 Forrest Drive               29204   COLUMBIA              SC
GRAND STRAND REGIONAL MED CTR                  809 82nd Parkway                 29572   MYRTLE BEACH          SC
MEDICAL CENTER -  WEST                         1801 North Oregon                79902   EL PASO               TX         07/01/94
SAM HOUSTON MEMORIAL                           1615 Hillendahl                  77055   HOUSTON               TX
SOUTHWEST TEXAS METHODIST HOSPITAL             7700 Floyd Curl Drive            78229   SAN ANTONIO
SPRING BRANCH MEDICAL CENTER                   8850 Long Point Road             77055   HOUSTON               TX         05/11/99
MEDICAL CENTER - EAST                          10301 Gateway West               79925   EL PASO               TX
BEAUMONT MEDICAL CENTER                        3080 College Street              77701   BEAUMONT              TX
LAKEVIEW HOSPITAL                              630 E. Medical Drive             84010   BOUNTIFUL             UT



1

ATTACHMENT THREE

                             HCA HOSPITALS TO WHICH
                              CEDARS MEDICAL CENTER
                         COST SHIFTING RELEASES APPLIES



                                   MEDICARE
                                   PROVIDER
FACILITY                              #
NAME                               (REDACTED)  STREET                           ZIP     CITY                  STATE
- -------------------------------------------------------------------------------------------------------------------------
                                                                                               
CEDARS MEDICAL CENTER                          1400 NW 12th Avenue              33136   MIAMI                 FL
MIAMI HEART INSTITUTE SOUTH                    4701 N. Meridan Avenue           33140   MIAMI                 FL
JFK MEDICAL CENTER                             5301 South Congress Avenue       33462   ATLANTIS              FL
AVENTURA HOSPITAL & MEDICAL CTR                20900 Biscayne Boulevard         33180   AVENTURA              FL
NORTHWEST REGIONAL HOSPITAL                    2801 North State Road #7         33063   MARGATE               FL
KENDALL REGIONAL MEDICAL CTR                   11750 Bird Road                  33175   MIAMI                 FL
UNIVERSITY HOSPITAL & MED CTR                  7201 N. University Drive         33321   TAMARAC               FL
WESTSIDE REGIONAL MED CTR                      8201 W. Broward                  33324   PLANTATION            FL
COLUMBIA - PALM BEACH - HOSPITAL               2201 45th Street                 33407   WEST PALM BEACH       FL

EX-12

                                                                      EXHIBIT 12

                                    HCA INC.

               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
             FOR THE QUARTERS AND SIX MONTHS JUNE 30, 2003 AND 2002
                             (DOLLARS IN MILLIONS)



                                                                QUARTER       SIX MONTHS
                                                              -----------   ---------------
                                                              2003   2002    2003     2002
                                                              ----   ----   ------   ------
                                                                         
EARNINGS:
Income before minority interests and income taxes...........  $437   $623   $1,241   $1,284
Fixed charges, excluding capitalized interest...............   153    137      296      286
                                                              ----   ----   ------   ------
                                                              $590   $760   $1,537   $1,570
                                                              ====   ====   ======   ======
FIXED CHARGES:
Interest charged to expense.................................  $123   $108   $  237   $  229
Interest portion of rental expense and amortization of
  deferred loan costs.......................................    30     29       59       57
                                                              ----   ----   ------   ------
Fixed charges, excluding capitalized interest...............   153    137      296      286
Capitalized interest........................................    13     10       25       13
                                                              ----   ----   ------   ------
                                                              $166   $147   $  321   $  299
                                                              ====   ====   ======   ======
Ratio of earnings to fixed charges..........................  3.55   5.17     4.79     5.25

EX-31.1

                                                                    EXHIBIT 31.1

                                 CERTIFICATION

I, Jack O. Bovender, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of HCA Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
   material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this quarterly report, fairly present in all material
   respects the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

      a) designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision, to
   ensure that material information relating to the registrant, including its
   consolidated subsidiaries, is made known to us by others within those
   entities, particularly during the period in which this report is being
   prepared;

      b) evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end of the
   period covered by this report based on such evaluation; and

      c) disclosed in this report any change in the registrant's internal
   control over financial reporting that occurred during the registrant's most
   recent fiscal quarter that has materially affected, or is reasonably likely
   to materially affect, the registrant's internal control over financial
   reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our
   most recent evaluation of internal control over financial reporting, to the
   registrant's auditors and the audit committee of registrant's board of
   directors (or persons performing the equivalent functions):

      a) all significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are reasonably
   likely to adversely affect the registrant's ability to record, process,
   summarize and report financial information; and

      b) any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal control
   over financial reporting.

Date: August 11, 2003

                                          By:   /s/ JACK O. BOVENDER, JR.
                                            ------------------------------------
                                                   Jack O. Bovender, Jr.
                                              Chairman of the Board and Chief
                                                     Executive Officer

EX-31.2

                                                                    EXHIBIT 31.2

                                 CERTIFICATION

I, R. Milton Johnson, certify that:

1. I have reviewed this quarterly report of Form 10-Q of HCA Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
   material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this quarterly report, fairly present in all material
   respects the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

      a) designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision, to
   ensure that material information relating to the registrant, including its
   consolidated subsidiaries, is made known to us by others within those
   entities, particularly during the period in which this report is being
   prepared;

      b) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end of the
   period covered by this report based on such evaluation; and

      c) Disclosed in this report any change in the registrant's internal
   control over financial reporting that occurred during the registrant's most
   recent fiscal quarter that has materially affected, or is reasonably likely
   to materially affect, the registrant's internal control over financial
   reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our
   most recent evaluation of internal control over financial reporting, to the
   registrant's auditors and the audit committee of registrant's board of
   directors (or persons performing the equivalent functions):

      a) all significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are reasonably
   likely to adversely affect the registrant's ability to record, process,
   summarize and report financial information; and

      b) any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal control
   over financial reporting.

Date: August 11, 2003

                                          By:     /s/ R. MILTON JOHNSON
                                            ------------------------------------
                                                     R. Milton Johnson
                                            Senior Vice President and Controller
                                               (Principal Financial Officer)

EX-32.1

                                                                    EXHIBIT 32.1

                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of HCA Inc. (the "Company") on Form
10-Q for the quarter ended June 30, 2003, as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), each of the undersigned
certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the requirements of section 13(a)
     or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all
     material respects, the financial condition and results of operations of the
     Company.

                                          By:   /s/ JACK O. BOVENDER, JR.
                                            ------------------------------------
                                                   Jack O. Bovender, Jr.
                                              Chairman of the Board and Chief
                                                     Executive Officer
                                                      August 11, 2003

                                          By:     /s/ R. MILTON JOHNSON
                                            ------------------------------------
                                                     R. Milton Johnson
                                            Senior Vice President and Controller
                                               (Principal Financial Officer)
                                                      August 11, 2003