Tenet Faces Fraud Investigation Into Payments Made To Women’s Clinics

TenetA federal investigation into kickbacks allegedly paid by Tenet Healthcare Corp. marks the latest fraud inquiry involving the Dallas-based hospital giant over the last decade.

The disclosure this week comes as Tenet has tried to reshape its image and operations since 2006, when it reached a $900 million settlement, one of the largest ever, with the U.S. Justice Department to resolve fraud accusations.

The new investigation alleges that four Tenet hospitals in Georgia and South Carolina made improper payments in return for patient referrals. Both investigations also were triggered by whistle-blower lawsuits filed under the U.S. False Claims Act, leading federal authorities to intervene as plaintiffs.

The FBI said in its release that the hospitals paid kickbacks to obstetric clinics serving “undocumented Hispanic women.’’ The money was in exchange for providing labor and delivery services to the patients. The hospitals then falsely billed Medicaid for reimbursements tied to the procedures, the statement said.

Anti-kickback laws are designed to prevent financial incentives from interfering with caregivers’ medical judgment.

Tenet officials said in their own statement Thursday that transactions with the clinics were proper. They would “vigorously defend against the allegations,” the statement said.

The agreements with the clinics provided “substantial benefits to women in underserved Hispanic communities,” Tenet said. “By ensuring that pregnant women received prenatal care and appropriate treatment during birth, these programs increased the likelihood of a safe birth and a healthy baby while reducing the overall cost to state Medicaid programs.”

Federal authorities, however, used sharp language to stress the seriousness of the allegations.

“Schemes such as this one corrupt the health care system and take advantage of vulnerable patients,” Stuart F. Delery, assistant attorney general for the Justice Department’s civil division, said in the news release.

“My office has made the investigation of health care fraud a priority,” said Michael J. Moore, the U.S. attorney for the Middle District of Georgia. “In a time when too many people were struggling to get health care for themselves and their children, Tenet and these hospitals plundered a system set up for those truly in need.”

Tenet operates in 12 states. Its North Texas facilities include Doctors Hospital at White Rock Lake in East Dallas, Lake Pointe Medical Center in Rowlett and Centennial Medical Center in Frisco.

Tenet owned Memorial Medical Center of New Orleans in 2005, when 45 bodies were found after the Hurricane Katrina floods. The corporation paid $25 million to settle a suit that accused it of being ill-prepared for the disaster. Tenet denied wrongdoing, saying poor levees and government rescue efforts were to blame.

Other Tenet facilities were investigated in the early 2000s on improper billing. Tenet struck its 2006 deal with the government to settle some of the improper billing allegations as well as kickback accusations.

The corporation’s management ranks have seen several changes in recent years. And the company continues to grow. Last fall it acquired another health care giant, Vanguard Health Systems based in Nashville, Tenn., for $4.3 billion.

The new Tenet investigation is at least the third such federal case involving a major Dallas health care organization in recent years. Parkland Memorial Hospital and its academic partner UT Southwestern Medical Center also faced Justice Department fraud suits stemming from whistle-blower actions. They denied wrongdoing and later paid settlements.


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