- Tenet Healthcare said Monday that two former hospitals will plead guilty and it will pay $514 million.
- Atlanta Medical Center and North Fulton Hospital in Atlanta, which Tenet sold in March, agreed to plead guilty to one count each of conspiring to violate federal anti-kickback statutes. Also involved in the scheme were Spalding Regional Hospital in Griffin, GA, and Hilton Health Hospital in South Carolina.
- The Department of Justice joined a whistleblower lawsuit in 2014 that accused the Tenet hospitals of paying the Clinica de la Mama for referring undocumented pregnant women to them for deliveries that were paid by Medicaid, in violation of the False Claims Act.
The $514 million payout is more than twice the $238 million that Tenet proposed back in February to settle the kickback allegations. The case is the first brought with the aid of the DOJ Criminal Division's corporate healthcare fraud strike force, according to Principal Deputy Assistant Attorney General Bitkower.
“Tenet cheated the Medicaid system by paying bribes and kickbacks to a prenatal clinic to unlawfully refer over 20,000 Medicaid patients to the hospitals," U.S. Attorney John Horn said in a news release. “In so doing, they exploited some of the most vulnerable members of our community and took advantage of a payment system designed to ensure that underprivileged patients have choices in receiving care.”
The company said it has revised its referral policies and is ramping up its standards on vendor selection, audit and oversight activities and employee training to prevent future misconduct. The settlement with the DOJ also requires Tenet to have an outside compliance monitor its referral source arrangements for three years.
Tenet has weathered a rollercoaster of financial results in recent years. The hospital chain’s $32 million loss in the first period of 2014 turned around for a $47 million profit a year later. But the uptick was short-lived: Tenet finished 2015 with a $140 million loss. The firm posted a loss again — $59 million — in the first quarter of 2016.
In April, the S&P 500 gave Tenet the boot, saying it was better suited for the S&P MidCap 400.
Contributing to the losses were a rise in uninsured patients and unresolved debt at its hospitals, though hospitals in states that expanded Medicaid under the ACA saw a decrease in uninsured admissions.