FOR RELEASE:

PRECEDENT-SETTING CORPORATE GOVERNANCE PLAN ESTABLISHED IN SETTLEMENT OF HCA SHAREHOLDER SUIT

HCA Inc., a healthcare services company, will adopt an unprecedented corporate governance plan that goes well-beyond federal requirements as part of an agreement in principle to settle a shareholder derivative lawsuit in which the New York State Common Retirement Fund was the lead plaintiff, Comptroller Alan G. Hevesi announced today.

"The corporate governance plan being adopted by HCA significantly raises the bar on accountability for all of corporate America. It is tougher than any existing law or regulation, and requires HCA to conduct its business to ensure shareholder interests are protected. For example, it will require a Board of Directors comprised of at least two-thirds truly independent directors and with strong powers to oversee management," Comptroller Hevesi said. "I congratulate former Comptroller H. Carl McCall on achieving this settlement. As the new Comptroller, I intend to aggressively pursue corporate governance reform in settling future suits."

The groundbreaking plan is more comprehensive than the relevant provisions of the Sarbanes-Oxley Act recently signed by President Bush, and the proposed New York Stock Exchange rules now before the U.S. Securities and Exchange Commission for its approval. It will result in a substantially independent board of directors by mandating a higher percentage of independent directors and using a stronger definition of independence. The Board's Audit Committee, comprised solely of independent directors, will have more power than under existing laws and regulations, and the Board is mandated to maintain an Ethics and Compliance committee to monitor corporate ethics and oversee compliance with applicable standards.

The New York State Comptroller, as sole trustee of the nation's second largest public pension fund, valued at about $100 billion, filed a lawsuit against HCA in 1997 seeking relief on behalf of the Corporation which, it was alleged, was damaged by widespread healthcare fraud at HCA. The lawsuit followed the announcement of investigations by the FBI, Internal Revenue Service and the Department of Health and Human Services. The Fund, as lead plaintiff, was represented in this case by Bernstein Litowitz Berger & Grossmann LLP.

The New York State Common Retirement Fund owned 2.2 million shares of HCA stock worth about $95 million as of Dec. 31, 2002.

Comptroller Hevesi indicated that under the sweeping governance plan, the HCA Board of directors will be substantially independent and have increased power to oversee fair and accurate financial reporting and compliance with State and Federal Medicare and Medicaid regulations.

Some of the more significant requirements include:

1. Two-thirds of the Board of Directors must be independent. In addition to not having been employed by the Corporation in the last five years, an independent director must not have performed any significant consulting work for the firm within the last five years. The Independent Directors may retain legal counsel and other consultants to advise them. The entire Board, or appropriate committees consisting entirely of independent directors, will monitor internal control and corporate compliance.
   The NYSE proposal only requires a majority of a company's board to be comprised of independent directors, and does not specifically make the Board responsible for monitoring compliance. Sarbanes-Oxley does not provide for independent board members, and both the NYSE proposal and Sarbanes-Oxley provide the authority to retain consultants only to specific Board committees.
   
2. HCA's Audit Committee will be made up solely of independent directors and have at least two members with accounting or financial experience.. The Audit Committee must also meet with management and the external auditors prior to the filing of each annual report and quarterly report.
   Sarbanes-Oxley and NYSE only require one member of an audit committee to have financial expertise.
3. HCA's external auditing firm must be rotated every seven years unless the Audit Committee affirmatively determines that rotation is not in the Company's best interests. This determination must be made every three years.
   Sarbanes-Oxley only mandates that firms rotate the audit partner, not the entire audit firm, every five years.
4. HCA may not hire any partner or senior manager who has done audit work for the firm within the last two years without the approval of the Audit Committee.
   Sarbanes-Oxley requires no auditing work within one year of being hired. NYSE regulations are less specific, ordering firms to set hiring guidelines.
5. The Audit Committee must pre-approve certain non-audit services by HCA's external auditor. Sarbanes-Oxley permits some exceptions to this rule.
6. HCA is required to have a Senior Vice President of Internal Audit who must report to the Chief Executive Officer and the Chair of the Audit Committee.
   Under the NYSE proposal, companies are only required to have an internal audit function, which may be outsourced.
7. HCA must maintain an Ethics and Compliance Committee separate from the Audit Committee. The NYSE proposal simply requires the company have a Code of Business Conduct.

Apart from the governance plan, the insurance carriers for HCA's directors and officers have agreed to pay the company $14 million as part of the settlement, which is subject to approval by the United States District Court for the Middle District of Tennessee.

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