Tenet Healthcare to pay $513M in kickback settlement

Tenet Healthcare and several of its subsidiaries today agreed to pay more than $513 million to resolve criminal charges and civil claims relating to a scheme to pay kickbacks in return for patient referrals.

Specifically, Tenet will pay $368 million to settle civil allegations that Tenet paid kickbacks to Clinica de la Mama, an obstetric clinic serving primarily undocumented Hispanic women, and related entities to induce the referral of those patients to its hospitals for labor and delivery and therefore, submitted false claims to the Georgia Medicaid program. Certain of these patients were eligible for Medicaid while others qualified for Emergency Medical Assistance, a Medicaid program providing coverage for emergency conditions, including childbirth for undocumented immigrants. The hospitals also obtained additional Medicare reimbursement from the United States based on the influx of these low-income patients.

“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,” Georgia’s Attorney General Sam Olens said in a statement. “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,” Olens added.

Georgia will receive over $110 million as its share of the civil settlement. The global resolution also includes criminal forfeiture totaling over $145 million, and the overall civil settlement with the United States, Georgia, and South Carolina totals more than $368 million. 

In addition, two wholly-owned subsidiaries that previously operated Atlanta Medical Center and North Fulton Hospital in Georgia have pleaded guilty to conspiracy to violate the federal Anti-Kickback Statute and to defraud the United States. The plea agreements remain subject to acceptance by the court. Tenet HealthSystem Medical will enter into a non-prosecution agreement and will be required to cooperate with the Department of Justice and retain an independent compliance monitor for three years.

The civil case was the result of a whistleblower lawsuit filed by Ralph Williams in the Middle District of Georgia under the whistleblower provisions of the federal False Claims Act and the Georgia False Medicaid Claims Act, which allow private citizens to bring civil actions on behalf of the government and share in any recovery obtained. 

The State of Georgia was first to intervene in the civil action and filed its complaint in 2013. The United States also intervened in the civil action.  Williams will receive over $12 million from Georgia as his share of the state’s recovery. 

Georgia investigated and litigated the case in coordination with the U.S. Attorney’s Office for the Middle District of Georgia and the Commercial Litigation Branch of the Department of Justice’s Civil Division.  In addition, the state coordinated its investigation with the Department of Health and Human Services Office of Inspector General, the Criminal Fraud Division of the Justice Department, the U.S. Attorney’s Office for the Northern District of Georgia, and the Federal Bureau of Investigation.

Tenet Healthcare provided further details on the settlement in a Form 8-K filed today with the Securities and Exchange Commission.