Tenet Healthcare to Pay Up Over Medicaid Fraud Charges

October 10th 2016
Lauren Santye, Assistant Editor
Lauren Santye, Assistant Editor

Tenet is expected to pay hundreds of millions to resolve criminal charges and civil claims related to alleged fraud.

Tenet Healthcare Corp will pay more than $513 million to resolve criminal charges and civil claims related to fraud charges, according toReuters.

This fraud scheme primarily involved undocumented pregnant women who were told at prenatal care clinics that Medicaid would cover their costs if they gave birth at a Tenet hospital.

The clinics allegedly received kickbacks and bribes from the hospitals, with approximately 20,000 women involved who received Medicaid benefits, according to the Justice Department. In August, Tenet disclosed they reached an agreement in principle on the matter, reportedReuters.

Two of Tenet’s subsidiaries, Atlanta Medical Center Inc and North Fulton Medical Center Inc, agreed to plead guilty to conspiracy to defraud the United States, and to pay the health care kickbacks and bribes in plea agreements, according toReuters.

In total, Tenet will pay $244 million to the federal government, $122 million to Georgia, and $892,125 to South Carolina. Whistleblower Ralph Williams, who filed a suit against Tenet, will receive $84 million of the civil settlement.

“The conduct in this matter was unacceptable and failed to live up to our high expectations for integrity,” said Trevor Fetter, chairman and CEO of Tenet, in a press release. “The relationships between the 4 hospitals and Clinica de la Mama violated the explicit requirements at our compliance program and were inconsistent with the strong culture of compliance we’ve worked hard to establish at Tenet. We take seriously our responsibility to operate our business in accordance with the highest ethical standards, every day and in every interaction.”

The company expects that the payments will be paid during the fourth quarter using available liquidity, which included borrowings and cash under Tenet’s revolving credit facility, reportedBusinessWire.

As part of the settlement, Tenet will be subject to a 3-year non-prosecution agreement (NPA) with the Department of Justice (DOJ). Under the NPA, Tenet and the DOJ will choose a compliance monitor for a 3-year period to oversee Tenet’s compliance with the Federal Anti-Kickback Statues, as well as Stark laws relating to referral source arrangements, according to theWire.

The resolution documents will be filed in a Form 8-K with the Securities and Exchange Commission. Additionally, the final resolution is subject to court approval of the plea agreements,Reutersreported.

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