Tenet Healthcare Corporation, and two of its Atlanta-area subsidiaries will pay over $513 million to resolve criminal charges and civil claims relating to a scheme to defraud the United States and to pay kickbacks in exchange for patient referrals.

Two Tenet units — Atlanta Medical Center and North Fulton Medical Center — will plead guilty to conspiracy to defraud the United States and to pay health care kickbacks and bribes in violation of the Anti-Kickback Statute (AKS).

Tenet was represented by Kathryn Ruemmler of Latham & Watkins in Washington, D.C.

Up until April 2016, Atlanta Medical Center Inc. and North Fulton Medical Center Inc.  were owned and operated acute-care hospitals located in the greater Atlanta metropolitan area.

Atlanta Medical Center Inc. and North Fulton Medical Center Inc. were charged in a criminal information with conspiracy to defraud the United States by obstructing the lawful government functions of HHS and to violate the AKS, which, among other things, prohibits payments to induce the referral of patients for services paid for by federal healthcare programs.

The two Tenet subsidiaries have agreed to plead guilty to the charges alleged in the criminal information and will forfeit over $145 million to the United States – which represents the amount paid to Atlanta Medical Center Inc. and North Fulton Medical Center Inc. by the Medicare and Georgia Medicaid programs for services provided to patients referred as part of the scheme.

Tenet HealthSystem Medical Inc. and its subsidiaries entered into a non-prosecution agreement.  

Tenet is the parent company of Atlanta Medical Center Inc., North Fulton Medical Center Inc., Spalding Regional Medical Center Inc. and Hilton Head Hospital, and employed their executives.

Under the terms of the NPA, Tenet HealthSystem will avoid prosecution if they, among other requirements, cooperate with the government’s ongoing investigation and enhance their compliance and ethics program and internal controls.

Tenet has also agreed to retain an independent compliance monitor to address and reduce the risk of any recurrence of violations of the AKS by any entity owned in whole, or in part, by Tenet.

The non prosecution agreement runs for three years, but may be extended for up to one year.

In the civil settlement, Tenet will $368 million to the federal government, the state of Georgia and the state of South Carolina to resolve claims asserted in United States ex rel. Williams v. Health Mgmt. Assocs., Tenet Healthcare, et al., a lawsuit filed by Ralph D. Williams, a Georgia resident, under the federal and Georgia False Claims Acts.

The acts permit whistleblowers to file suit for false claims against the government entities and to share in any recovery.

The federal share of the civil settlement is $244 million the state of Georgia will recover $123 million and the state of South Carolina will recover $892,125.

Williams’ share of the combined civil settlement amount is approximately $84.43 million.

“When pregnant women seek medical advice, they deserve to receive care untainted by bribes and illegal kickbacks,” said Principal Deputy Assistant Attorney General Bitkower.  “The Tenet case is the first brought through the assistance of the Criminal Division’s corporate health care fraud strike force.  This is one of more than a dozen active corporate investigations by the strike force, and we are committed to following evidence of health care fraud wherever it leads – whether it be individual physicians, pharmacy owners or corporate boardrooms.”