Risk & Compliance

Tenet Settles Kickback Charges for $513M

The hospital chain allegedly obtained $145 million in Medicaid and Medicare funds by paying an operator of prenatal clinics for referrals.
Matthew HellerOctober 4, 2016
Tenet Settles Kickback Charges for $513M

Tenet Healthcare has agreed to pay $513 million to settle charges that its hospitals in Georgia and South Carolina paid kickbacks to an operator of prenatal clinics in return for referrals.

The hospital chain said Monday it had finalized a deal with the U.S. Department of Justice that resolves both criminal charges and a whistleblower lawsuit. A proposed settlement was disclosed in August.

Under the settlement, two Tenet subsidiaries, Atlanta Medical Center and North Fulton Medical Center, agreed to plead guilty to conspiracy to defraud the U.S. and pay health care kickbacks and bribes in violation of the Anti-Kickback Statute, while the parent company will avoid prosecution if it enhances its compliance, ethics program and internal controls.

“The conduct in this matter was unacceptable and failed to live up to our high expectations for integrity,” Tenet CEO Trevor Fetter said in a news release.

According to the government, the owners of the prenatal clinics served primarily undocumented Hispanic women and “were able to control where these women delivered their babies.” The Tenet hospitals billed the Medicaid and Medicare programs for the services provided to the referred patients.

As part of the scheme, the government said, expectant mothers were in some cases told Medicaid would cover the costs associated with their childbirth and the care of their newborn only if they delivered at one of the Tenet hospitals.

“Tenet cheated the Medicaid system by paying bribes and kickbacks to a prenatal clinic to unlawfully refer over 20,000 Medicaid patients to the hospitals,” John Horn, the U.S. Attorney in Atlanta, said. “In so doing, they exploited some of the most vulnerable members of our community and took advantage of a payment system designed to ensure that underprivileged patients have choices in receiving care.”

In the criminal case, Tenet will pay back the $145 million in Medicaid and Medicare funds it allegedly obtained through kickbacks and bribes. In the civil suit, which was originally filed by Ralph Williams, the former CFO of a Tenet hospital in Georgia, it agreed to pay $368 million, of which about $84 million will go to Williams.