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A Project of The Annenberg Public Policy Center

Florida’s Medicare Fraud Flashback

The Florida Democratic Party implies that Gov. Rick Scott “took the Fifth 75 times” in lawsuits concerning his former company committing Medicare fraud. He didn’t.

In a TV ad released on June 17, a narrator says: “Maybe you’ve heard about what was the largest Medicare fraud in history, committed when Rick Scott was a CEO. Or that Scott’s company paid record fraud fines of $1.7 billion.”

The narrator immediately follows with: “And when Scott was deposed in lawsuits about his company, he took the Fifth 75 times. Meaning, 75 times, Scott refused to answer questions because – if he had – he might admit to committing a crime.”

That’s misleading. Scott didn’t invoke the Fifth Amendment, which protects individuals from self-incrimination, 75 times in response to questions about whether his former hospital company, Columbia/HCA, committed Medicare fraud. In fact, Scott said he was never questioned by federal investigators in the criminal case involving his former company.

Instead, Scott avoided answering questions when being deposed for a 2000 civil case between Columbia/HCA and a communications company, which accused Columbia/HCA of breaching the terms of a contract. Only once did “Columbia’s improper billing practices” come up during the proceedings, according to a transcript of the deposition.

However, the federal investigation of Scott’s company played a role in his decision to invoke the Fifth Amendment, according to his attorney.

This isn’t the first time we’ve written about claims that Scott’s former company committed Medicare fraud. It was a line of attack used against him in the 2010 governor’s race, first by Republican Bill McCollum, Scott’s rival in the GOP primary, and then by Democrat Alex Sink, who Scott defeated in the general election.

The Florida Democratic Party said that it is again making it an issue in the 2014 governor’s race to hold “Rick Scott accountable for breaking trust with Floridians.”

It’s true, as the ad says, that Scott’s company, Columbia/HCA, paid a then-record $1.7 billion in fines to settle a federal Medicare fraud case for improper billing practices that took place while he was its chief executive officer. Scott claimed he had no knowledge of the fraudulent activity and said he would have acted to stop it had he known. In the end, though, Scott was never personally charged with any wrongdoing.

However, the ad gives the impression that Scott avoided answering dozens of questions about his company engaging in Medicare fraud by invoking his Fifth Amendment right not to testify against himself. That’s not what happened.

Scott was deposed on July 27, 2000, not for the federal government’s criminal case against Scott’s company, but for an unrelated civil case between Nevada Communications Corp. and Columbia/HCA. Nevada Communications Corp. filed a claim against Columbia/HCA for violating the terms of a communications contract.

At the beginning of the deposition, after Scott was asked whether he was employed, Scott’s attorney, Steven Steinbach, informed the opposing counsel that his client would be exercising his right not to answer any questions due to other pending cases involving Columbia/HCA.

“Under normal circumstances Mr. Scott would be pleased to answer that question and other questions that you pose today,” Steinbach began.

“Unfortunately because of the pendency of a number of criminal investigations relating to Columbia around the country, he’s going to follow my advice, out of prudence, [and] assert his constitutional privilege against giving testimony against himself.”

Scott proceeded to answer every question after that by saying: “Upon advice of counsel, I respectfully decline to answer the question by asserting my rights and privileges under the Fifth Amendment of the U.S. Constitution.”

Only one question seemingly touched on the subject of Medicare fraud. It came when an opposing lawyer asked Scott about a lawsuit Columbia/HCA filed against another company, Florida Software. Scott was asked: “Do you have any knowledge tending to indicate that Columbia’s claim against Florida Software is or was designed to cover up or obfuscate Columbia’s improper billing practices?”

Scott may not have answered the questions during the deposition because of other pending cases against his company, including the federal investigation, but the TV ad suggests that he used the Fifth Amendment to avoid answering dozens of direct questions about his company’s attempts to defraud the Medicare program. That’s not the case.

— D’Angelo Gore