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Tenet hospital chain to pay $513 million for kickback scheme

Tenet healthcare prenatal kickback scheme

Whistleblowers and their attorneys worked alongside several government agencies to help put an end to this kickback scheme.

Tenet Healthcare’s recent settlement was the latest of several instances in which it has paid millions to settle a lawsuit for defrauding government healthcare programs.

The Dallas-based hospital chain agreed this week to pay over $513 million to settle charges stemming from a whistleblower case alleging two of its former subsidiaries used bribes to funnel undocumented pregnant women to their hospitals.

In 2002, Tenet paid more than $55 million to settle a whistleblower lawsuit alleging a Tenet-owned hospital engaged in a scheme to overbill Medicare. And in 2006, Tenet paid another $900 million to settle allegations of a separate overbilling scheme.

In the recent case, two Tenet subsidiaries, Atlanta Medical Center and North Fulton Medical Center, pleaded guilty to conspiracy to defraud the US and violate the Anti-Kickback Statute by paying bribes to prenatal care clinics serving primarily undocumented women in order to induce referrals to Tenet hospitals for childbirth labor and delivery services. In some cases, referrers told pregnant women that the costs of childbirth and newborn care would be covered by Medicaid only if they delivered at a Tenet hospital.

As a result, women and their pregnancies were put at an increased risk while they traveled far from their homes, sometimes in active labor, in order to deliver at a Tenet hospital.

Under the terms of the settlement, Tenet will pay $368 million to resolve the whistleblower case brought under the False Claims Act. The hospitals also will forfeit over $145 million to the government as a result of the criminal pleadings, representing the amount of Medicaid and Medicare funds Tenet received as a result of its illegal referrals.

The case was the first brought with the assistance of a group the US Department of Justice calls its “corporate healthcare strike force.”

This settlement is another example of how whistleblowers and government agencies – both state and federal – can work together effectively to stop healthcare fraud.

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