Washington

The Department of Justice has joined a whistle-blower lawsuit in Tampa, Fla., against accounting firm KPMG Peat Marwick (now called KPMG) for allegedly helping Columbia/HCA Healthcare (now called HCA - the Healthcare Co.) defraud the Medicare program.

Legal experts note that the case marks the first lawsuit in which the federal government is using the False Claims Act to hold an outside accounting firm liable for aiding and facilitating its client's fraudulent claims. Among other claims, the DOJ lawsuit alleges that KPMG prepared "reserve cost reports" identifying the falsely claimed costs so that HCA could set aside funds to repay the government "in the event the unallowable costs were eventually discovered."

HCA also reached an $840 million settlement agreement with the DOJ to settle all federal criminal charges and civil claims against the company for defrauding the Medicare program.

In other news, the DOJ has joined a qui tam lawsuit against bankrupt Integrated Health Services, alleging that the Sparks, Md.-based health care company defrauded Medicare through some of its long-term care facilities.

IHS officials could not be reached for comment.

IHS, which also provides home respiratory care and durable medical equipment, and most of its subsidiaries filed for Chapter 11 bankruptcy protection in February 2000.