Tenet Healthcare to Pay $514 Million Gets Non Prosecution Agreement, Two Units with No Assets to Plead Guilty

Tenet Healthcare will pay $513 million and enter into a non prosecution agreement to settle a False Claims Act case.

tenet

The company said that it will pay a $368 million civil monetary payment and a $146 million criminal payment to settle the case.

The company said that “two indirect, wholly owned subsidiaries that previously operated Atlanta Medical Center and North Fulton Hospital, and which currently have no operating assets, will agree to plead guilty to a single count of conspiracy to violate the federal anti-kickback statute and defraud the United States.”

Under the agreement, the Department of Justice will appoint a monitor for three years.

Tenet is being represented by William Jordan of Alston & Bird in Atlanta and Roger Goldman of Latham & Watkins in Los Angeles.

A whistleblower, represented by Marlan Wilbanks of Atlanta, filed a lawsuit alleging that four Tenet hospitals, Atlanta Medical Center, North Fulton Regional Hospital, Spalding Regional Hospital and Hilton Head Hospital in South Carolina, and one HMA facility, Walton Regional Medical Center (since renamed Clearview Regional Medical Center), paid kickbacks to Hispanic Medical Management d/b/a Clinica de la Mama (Clinica) and related entities in return for Clinica’s agreement to send pregnant women to their facilities for deliveries paid for by Medicaid, in violation of the federal Medicare and Medicaid Anti-Kickback Statute.

The kickbacks were disguised as payments for a variety of services allegedly provided by Clinica.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs. The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.

Patrick Burns of Taxpayers Against Fraud told Corporate Crime Reporter that the case was a good example of why state False Claims Act laws are important.

“Georgia took the lead, and the feds followed, with the criminal folks at the Justice Department showing up after that,” Burns said. “Without a whistleblower, a tenacious private lawyer, and state intervention, it’s not clear the federal government would have had taken the time to fully understand the scope of this fraud.”

“Tenet has a very bad track record in the fraud arena. This is a hospital company that was nailed for such a massive fine under the False Claims Act that it changed its name to Tenet Healthcare to reflect its new ethical ‘tenets’.  The company then went ahead and designed the largest hospital fraud in history for which they paid $900 million after ripping off the government more than $2 billion. Now Tenet has been nailed for another $500 million and tagged with a criminal charge as well.”

“Which begs the question. At what point are bonuses and stock options going to be clawed back?  At what point are key managers going to be excluded?  At what point will a Corporate Integrity Agreement mandate that this company’s failed compliance program be replaced with something that actually works?  If none of this is done, what does a criminal charge really mean?”

 

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