A class action has been filed against healthcare services company Columbia/HCA Healthcare Corporation (formerly NYSE: COL) and certain of its officers and directors by stockholders who purchased the company's common stock between April 8, 1994, and March 19, 1997. The company is now known simply as HCA Inc. (NYSE: HCA). The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

The stockholders allege that, beginning as early as April 1990, the defendants engaged in a massive fraud to inflate Columbia/HCA's revenues and earnings by fraudulently obtaining from the United States and other third-party insurers hundreds of millions of dollars for counseling, therapy, medication, and other therapeutic procedures that were never rendered, unnecessary, inappropriate, billed at inflated rates, or otherwise improper, and for medical devices that were unnecessary or never provided. One of the means by which the defendants allegedly defrauded Medicare was through the practice of upcoding, in which hospitals receive larger payments from Medicare by inflating the seriousness of illnesses they treat.

The "derivative" actions brought by the stockholders (actions brought on behalf of HCA itself against the allegedly liable corporate officers) have been consolidated in a separate case, under case number 3:97cv838. On June 3, 2003, the court approved the parties' $14 million settlement in that case.