Rick Scott's decision to attack Sen. Bill Nelson with one of the governor's greatest vulnerabilities — Medicare fraud — marks a shift in tactics for Scott. | Getty Democrats: Medicare fraud is 'fungus' Scott will never get rid of

TALLAHASSEE — Gov. Rick Scott is used to being attacked for the historic $1.7 billion Medicare fraud fine slapped on his former hospital company. But in a new twist, he’s trying to turn his weakness into a strength by accusing his opponent of “stealing money from Medicare.”

In a state with one of the nation’s largest populations of seniors, those are fighting words. And they’re also false words.


Scott’s claim, leveled in a TV ad that recently played in heavy rotation, inaccurately states that Sen. Bill Nelson (D-Fla.) stole from Medicare simply because the Democrat’s campaign hired consultants instead of full-time staff and therefore did not pay payroll taxes that fund Medicare and Social Security. The arrangement is perfectly legal and isn’t stealing.



The Republican governor’s decision to attack Nelson with one of Scott’s greatest vulnerabilities — Medicare fraud — marks a shift in tactics for Scott, who in 2010 felt the need to go so far as to run TV ads saying he took responsibility for the wrongdoing at Columbia/HCA Healthcare Corp. 20 years ago. This year, Scott says “I refuse to apologize for my success.”

But that success was marred by fraud.

The legacy of Scott’s leadership of Columbia/HCA — once the nation’s largest for-profit hospital chain before it ousted Scott and settled the largest health care fraud fine in history at the time — underpins his political identity. The company is the origin of his fabulous wealth, which has allowed him to pump $106.5 million of his own money into his campaigns, $20.6 million of which he has dropped so far on his Senate bid against Nelson. Some of his donors this year are old friends from Columbia/HCA. And Democrats aren’t letting the issue go, either.

“Columbia/HCA is like a fungus he’ll never get rid of,” said John Anzalone, a Democratic pollster for the Senate Majority PAC, which supports Nelson. For voters, he said, Scott’s role in the fraud scheme is “a character thing. They believe he’s a sketchy guy who got rich defrauding people.”

In focus groups the PAC conducted in August in Orlando and Tampa — the major urban areas of the swing state’s I-4 Corridor swing area — undecided voters know about Scott’s Medicare fraud past and just don’t trust him as a result, Anzalone said.

But Columbia/HCA isn’t a kill shot. Tens of millions of dollars were spent attacking Scott over the issue in his 2010 GOP gubernatorial primary, his 2010 general election campaign and his 2014 reelection campaign. Scott survived. And Democrats say they’ve learned a lesson: Don’t make Columbia/HCA a core issue, but instead use it as a “catalyst” to discuss Scott’s trustworthiness and his record, especially on health care, a top issue for voters, Anzalone said.

After eight years in office, Scott’s post-HCA health care record also includes several measures Democrats see as a vulnerability: opposing Medicaid expansion, privatizing most of the state’s Medicaid program, proposing to cut nearly $1 billion in Medicaid spending in his 2017 budget, opposing the Affordable Care Act and refusing to weigh in on a Donald Trump-backed lawsuit in which Florida is participating that seeks to do gut the landmark health care law, including its measure to protect people with pre-existing health conditions.

As Scott entered the Senate race, Democrats started with Columbia/HCA as jumping-off point.

In a 30-second digital ad in March, the Democratic Senatorial Campaign Committee used the issue to discuss Scott’s honesty concerning his finances and his decision to delete voicemails from a troubled nursing home where seniors died last year after Hurricane Irma knocked out its power. A month later, the Senate Majority PAC followed up with its own 30-second digital ad that began with Columbia/HCA and then pivoted to Scott’s education, health and tax record. Another digital ad from the group compares his term as governor with his past leadership of the hospital company.

Tellingly, though, one of Senate Majority PAC’s first paid TV ads didn’t mention Columbia/HCA and instead focused on Scott’s decision to veto health care money and refuse Medicaid expansion.

For Scott’s campaign, Democrats’ decision not to put real money behind Columbia/HCA is a sign that the issue has been litigated — and won — by Scott.

"We look forward to seeing their baseless attack ads on an old, tried and tired attack. And, as we can see from both races, the people of Florida have rejected this attack each time,” said Scott campaign spokeswoman Lauren Schenone, who declined to answer questions about Scott’s time at the company.

While it’s true that Scott has survived two general elections and a primary campaign that focused on the Medicare fraud in his past, Scott was damaged. He has never received 49 percent or more of the vote — even in the general elections during blood-red Republican wave years.

This year, there’s more talk of a blue wave for Democrats. Scott is holding a small lead over Nelson in the polls, partly because Scott and his supporters are outspending Nelson by nearly 3-to-1 on television. Scott’s supporters say voters are also rewarding the governor for presiding over a booming economy and for keeping his promises rather than punishing him for a decades-old scandal.

“When people look back on his governorship, I think where they will give him credit is how he handled Florida’s crises," Bill Rubin, a longtime Scott friend and adviser as well as his lead lobbyist in Florida when Scott ran Columbia/HCA, told POLITICO in an interview.

While the company eventually pleaded guilty to 14 felonies, Scott was never charged with any crime, and he has maintained his innocence for years. There’s no record Scott was even interviewed by federal agents in their probe of HCA. While Scott did say in 2010 that he “took responsibility" for what happened, he denied knowing about any fraud.

“I feel like he’s a very honest, upstanding person in all aspects of his life. I think even with what happened, it was really a crazy period where lots of hospitals got asked stuff,” Rubin said.

Rubin is one of eight HCA executives and lobbyists — former and current — who worked under Scott and have so far contributed a combined $66,400 to his campaign directly or to the super PAC supporting him. The company also contributed $10,000 through its political committee, the HCA Inc. Good Government Fund, to bring the total to $76,400. Rubin chipped in $5,400. Scott’s largest contributor from that crew, David T. Vandewater, and his wife gave nearly $36,000.

Vandewater, who couldn’t be reached for comment, was Scott’s top lieutenant at Columbia/HCA, resigning with him in 1997, about four months after the federal government made its probe of the company public by raiding the company’s hospitals in El Paso. In the aftermath, the company shed the name “Columbia” — Scott’s hospital company before it merged with HCA.

When the investigation first became public, Scott denied any wrongdoing. At times, he has also blamed the Clinton White House for exacting political revenge on him for his opposition to then-first lady Hillary Clinton’s health care initiative, a claim that the Health and Human Services secretary at the time, Donna Shalala — a Democrat who’s now a congressional candidate in Miami — said wasn’t true.

A New York Times report at the time said investigators had gone through records from at least 50 Columbia hospitals, targeting Medicare charges, doctor-recruitment practices, referrals to home health agencies and blood lab work. At the time of the raid, Columbia/HCA owned more than 500 home health centers and about 340 hospitals as the country’s largest for-profit hospital chain.

Scott was reluctant to cooperate with federal investigators, not responding to repeated requests for an interview with federal investigators in 1995 regarding accusations against the company, and he remained CEO and chairman of Columbia/HCA’s board.

But by July 1997, the hospital company had serious legal problems. The federal government issued 35 warrants to search hospitals that were owned previously or at the time by Columbia/HCA and two companies doing business with the chain in seven states — Florida, Texas, Tennessee, North Carolina, Utah, Oklahoma and Georgia.

Scott was forced to resign later that month, receiving at least $10 million in cash — including $5 million under a consulting agreement — and $300 million in stock and options. At the time, Columbia/HCA was taking in $18.8 billion in revenue across 336 hospitals in 32 states and three foreign countries, according to a federal regulatory filing. After Scott left, HCA abruptly ended the practice of doctor partnerships in its hospitals and began cooperating with federal investigators.

By 2003, the company completed what was then the largest health care fraud settlement with the federal government, ponying up $1.7 billion for a range of fraud settlements including cost report fraud and kickback payment to physicians. It also pleaded guilty to 14 corporate felonies.

For whistleblower John Schilling, a Republican former employee who helped expose the fraud in Florida, Scott’s election represents a threat to Medicare because of his company’s systemic Medicare fraud practices when he ran it.

“I would be concerned that if elected, he may have an agenda to change the Medicare program in a way that would enrich the hospital systems on behalf of the American taxpayer," Schilling said. “I would also be concerned that his agenda could include eliminating or altering the Federal False Claims Act," which protects whistleblowers like Schilling.

Longtime Scott ally Alan Levine, who worked for Columbia/HCA under Scott and has run private hospitals and government agencies overseeing hospitals in Florida and Louisiana, said he didn’t know about the company’s Medicare fraud practices at the time and would be surprised if Scott knew about the wrongdoing at the hospital chain. More broadly, Levine said, the controversy had the unfortunate effect of obscuring Scott’s good legacy concerning health care.

Scott had not only the vision, but also the discipline to merge hospitals, make them more efficient and measure their performance and health outcomes in a meaningful way, said Levine, calling him a “change agent.”

“I learned from this,” Levine said. “And when I was secretary of [the state Agency for Health Care Administration] in Florida, Florida was the first state in the country to require hospitals to measure outcomes publicly."

Levine has remained close with Scott throughout his governorship and has twice been appointed by him to the board overseeing the entire state university system.

As he did at Columbia/HCA, Scott made sure the board established a system of metrics, in this case performance-based funding for universities. Last year, the University of Florida — a university that receives additional state money for meeting certain standards — was the first state school to break into U.S. News and World Report’s top 10 for best public universities.

Scott has also pushed a similar program for cancer centers in the state, tying funding to specific criteria.

“Rick Scott believes that if you measure, you will succeed, and if you don’t measure, you will fail,” Levine said. “I saw it work at Columbia/HCA. And it worked in Florida.”