HCA-The Healthcare Co. profit falls on special charges

Wednesday, Feb. 7, 2001 | 11:23 a.m.

SUN STAFF AND WIRE REPORTS

NASHVILLE, Tenn. -- HCA-The Healthcare Co., the nation's largest for-profit hospital chain and a big operator in Las Vegas, said its fourth-quarter profit fell 77 percent because of special charges including costs for settling investigations into its Medicare billing practices.

Its profit fell to $21 million or 4 cents per share in the quarter from $91 million or 16 cents in the year-ago quarter.

But the company reported Tuesday a nearly 25 percent increase in operating earnings, citing its focus over the past three years on its hospitals and selling non-core businesses.

On an operating basis, HCA earned $198 million, or 35 cents per share, compared to $159 million, or 28 cents per share for the same period a year ago.

The company beat the expectations of Wall Street analysts by a penny, according to First Call/Thomson Financial.

Revenues were $4.2 billion, up 5.9 percent from $3.9 billion in the fourth quarter of 1999.

"HCA's success in 2000 and, in fact, over the past three years, is the result of putting in place solid operational strategies and focusing on our local hospitals," said Jack O. Bovender, Jr., who was named president and chief executive officer last month.

Bovender added that the company will pay the fine in its criminal settlement with the federal government in the first quarter of 2001, and a civil settlement in the first quarter or early in the second quarter.

In December, HCA announced it would pay more than $840 million in criminal fines and civil penalties in the largest governmental fraud settlement in history. More than half the settlement grew out of charges the hospital chain for years inflated the seriousness of pneumonia diagnoses to increase payments from government health care programs.

The rest of the case related to charges of cost report fraud, fraudulent Medicare billing for people working at home health agencies and wound care centers, paying kickbacks in the sale of home health agencies and fraudulent billing of Medicare for fees paid to manage those agencies.

Bovender, brought out of retirement three years ago by HCA co-founder Thomas Frist to help turn around the company, has said HCA is working to establish 12 regional offices for its hospitals, new quality control programs involving patient medication and retention incentives aimed at nurses, therapists and other caregivers.

In New York Stock Exchange trading late Tuesday, shares of HCA rose $1.40, or 3.7 percent, to $39.00.

The Nashville-based company earned $913 million, or $1.61 cents a share, for all of 2000, compared with $767 million, or $1.30 a share, the previous year.

Revenues rose to $16.67 billion from $16.66 billion.