Tenet Healthcare to pay $513 million in kickback case

The Tenet Healthcare chain and two of its subsidiaries -- Atlanta Medical Center Inc. and North Fulton Medical Center Inc.  -- will pay over $513 million to resolve criminal charges and a civil case that accused the hospitals of paying kickbacks to get patient referrals.

In a settlement announced Monday, Atlanta Medical Center Inc. and North Fulton Medical Center Inc. "have agreed to plead guilty to conspiracy to defraud the United States and to pay health care kickbacks and bribes in violation of the Anti-Kickback Statute," according to a news release from the U.S. Department of Justice.

Atlanta Medical Center

Credit: Carrie Teegardin

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Credit: Carrie Teegardin

The two Tenet subsidiaries previously operated Atlanta Medical Center and North Fulton Hospital. WellStar Health System bought the two hospitals in a deal that was finalized this spring.

The two subsidiaries that used to operate the hospitals agreed to plead guilty to the criminal charges and forfeit $145 million, according to the announcement. Tenet will pay $368 million to settle the civil case, which accused Tenet of paying kickbacks to Clinica de la Mama, which served undocumented Hispanic women. The kickbacks were paid in exchange for referring patients to the hospitals for labor and delivery services that were paid for by Medicaid.

“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," said U.S. Attorney John Horn of the Northern District of Georgia. "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.”

Georgia will get more than $110 million as its share of the civil settlement, according to Georgia Attorney General Sam Olens.

“Tenet took advantage of vulnerable pregnant women in clear violation of the law by paying kickbacks in order to bring their referrals to Tenet hospitals," Olens said in a statement Monday. "Through this scheme, Tenet defrauded the Georgia Medicaid program by hundreds of millions of dollars. This is an unprecedented settlement for the State of Georgia and reflects my office’s continued commitment to protecting the interests of Georgia patients and taxpayers by investigating allegations of Medicaid fraud and abuse.”

According to the criminal information, the clinic told pregnant women they could only deliver at a Tenet hospital, which was false.  Tenet acknowledged that it acted improperly in its own statement about the settlement.

“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 on Monday.

Spalding Regional Medical Center Inc. and Hilton Head Hospital were also accused of being part of the scheme.

The case began when Georgia resident Ralph D. Williams filed a whistle-blower claim exposing the scheme. Whistle-blowers are entitled to a share of the money recovered in such cases. Williams’ share of the civil settlement amount is $84 million, according to the announcement.

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