Tenet Healthcare Named in Whistleblower Lawsuit

Dallas-based Tenet Healthcare and Florida-based Health Management Associates paid kickbacks to clinics that directed pregnant women living in the United States illegally to their hospitals, and filed fraudulent Medicaid claims for those patients, a federal whistleblower lawsuit unsealed Wednesday alleges.

None of the hospitals in question were in Texas; they include Atlanta Medical Center, North Fulton Medical Center, and Spalding Regional Medical Center in Georgia, and Hilton Head Hospital in South Carolina. The suit was first reported by the Associated Press.

“We believe the agreements … were appropriate and provided substantial benefit to women in underserved Hispanic communities served by those hospitals,” Tenet said in a statement. “The services provided under these agreements included translation, determination of Medicaid eligibility, and other services designed to improve the delivery of obstetric care and increase the likelihood of a safe birth and a healthy baby.”

Paying for or accepting money to arrange for medical treatment is prohibited by the Medicare and Medicaid Patient Protection Act. The lawsuit was filed on behalf of the federal government and the state of Georgia by Ralph Williams, a former chief financial officer for HMA. The kickback scheme went on for more than a decade, he alleges. Williams’ supervisor had previously worked for Tenet in South Carolina, and claimed that Tenet used a similar kickback scheme in some of its Georgia and South Carolina hospitals.

“These services are important to addressing the healthcare gaps that affect many Hispanic patients and other minority communities,” Tenet said.

The suit isn’t Tenet’s first run-in with the Justice Department. In April 2012, Tenet paid $42.75 million to settle allegations that it violated the False Claims Act by overbilling Medicare. According to that settlement, Tenet inappropriately billed Medicare for more expensive services than patients needed, moving patients to more costly facilities intended for those who need intensive follow-up treatment after undergoing hospital procedures. The alleged overbilling took place from 2005 to 2007.

“This settlement demonstrates our office’s continued commitment to protect crucial Medicare dollars from fraud and abuse,” U.S. Attorney Sally Quillian Yates said at the time. “Inpatient rehabilitation facilities are expensive, and Medicare dollars should be reserved for patients who need the services–not for hospitals seeking to make money through improper billing.”

Tenet is expect to announce its second-quarter earnings Tuesday. The company reported a first-quarter loss earlier this year, which it attributed to a decline in admissions.

Posted in Hospitals, News.