Inside Baseball at HCA

Over the years, HCA (HCA) insiders have shown a real knack for well-timed stock sales.

Their efforts haven't always drawn the kind of spotlight now beating down on the Nashville, Tenn., hospital chain. But then, the insiders weren't often selling just ahead of a profit warning that would send the stock into a tailspin. Nor were they usually selling alongside a member of the founding family and a high-ranking politician, Sen. Bill Frist.

The government is now investigating the well-timed sales of HCA stock by the Tennessee Republican. Frist denies wrongdoing, saying the sales were part of an effort to eliminate even the appearance of a potential conflict of interest.

But Frist's critics point out that the Senate majority leader plays a major role in shaping health-care policies that could impact the giant for-profit hospital chain that his family built. And even some who called for Frist to sell his HCA stock question why he finally decided to do so now.

"If there is a conflict now, why wasn't there a conflict when he came into office or when he became Senate majority leader?" asks Bill Allison, a spokesman for the nonpartisan government ethics watchdog group known as the Center for Public Integrity. "And with his family still involved with HCA, I don't know that selling the stock even ends the conflict of interest. ... The timing of this doesn't quite make sense."

Or, Allison goes on to suggest, maybe it does. After all, he notes, Frist decided to sell his stock at the same time that another powerful Republican senator -- Finance Chairman Chuck Grassley of Iowa -- was crafting a bill that could bring sweeping changes to the Medicare reimbursement system. Under that proposal, recommended by the Centers for Medicare and Medicaid Services (CMS), Medicare would start paying hospitals based on their costs for treating patients instead of the amount the hospitals actually charge.