Consumer Fraud

Tenet Hospitals Pay $513 Million To Settle Whistleblower Suit Alleging Kickbacks, Medicaid Fraud

Pills Stethascope on Money 435x289 Tenet Hospitals Pay $513 Million To Settle Whistleblower Suit Alleging Kickbacks, Medicaid FraudTenet Healthcare Corporation and two of its Atlanta-area subsidiaries have agreed to pay the U.S. government $513 million to settle criminal and civil allegations that they entered into illegal kickback and bribery schemes designed to boost the volume of low-income patients on Medicaid.

Under the settlement, Atlanta Medical Center Inc. and North Fulton Medical Center Inc. agree to plead guilty to conspiracy to defraud the U.S government and violate federal anti-kickback laws by providing kickbacks and bribes to prenatal clinics in exchange for obstetric referrals.

The Tenet hospitals set their sights on prenatal clinics serving mostly low-income, undocumented Hispanic women who would be covered by Medicaid for labor and delivery medical services. Medicaid coverage for obstetric services made these women a valuable commodity to the hospitals, which paid the owners and operators of prenatal clinics kickbacks and bribes for referring the low-income Hispanic women to them, according to the Justice Department.

Federal prosecutors alleged that the hospitals conspired to defraud the Medicaid and Medicare programs and made illegal kickbacks while Tenet was bound to a September 2006 Corporate Integrity Agreement as a result of previous violations. The Tenet hospitals concealed the unlawful payments from federal regulators, falsely certifying their compliance with the agreement.

According to the government’s complaint, the kickbacks and bribes helped Tenet obtain more than $145 million in Medicaid funds.

In the civil settlement, Tenet agreed to pay $368 million to the federal government, the state of Georgia, and the state of South Carolina to resolve allegations contained in a whistleblower lawsuit filed by Georgia accountant Ralph Williams under the federal and Georgia False Claims Acts.

The federal share of the civil settlement is $244.23 million, Georgia will recover $122.88 million, and South Carolina will recover $892.12 million.

Mr. Williams will receive more than $84.43 million of the total recovery as a whistleblower award for exposing the extensive fraud.

“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,” said Georgia Attorney General Olens. “Through this scheme, Tenet defrauded the Georgia Medicaid program, and reaped hundreds of millions of dollars.  This is an unprecedented settlement for the state of Georgia, and reflects my office’s commitment to protecting Georgia taxpayers by uncovering Medicaid fraud and abuse.”

Source: U.S. Department of Justice