Corporate Compliance

Dallas hospital files Medicare fraud suit against a hostile takeover bidder

Compliance Monitor, April 20, 2011

Dallas-based Tenet Healthcare Corp. filed a Medicare fraud lawsuit that accuses Community Health Systems Inc. (CHS) of overbilling Medicare for unnecessary inpatient admissions, according to an April 11 article in The Dallas Morning News.

Tenet estimates that CHS, based in Franklin, TN, has received more than $1 billion in inappropriate reimbursement for  inpatient admissions. Tenet bases the claim on Community Health’s 5.1% observation rate, which is less than half the 12.6% industry average.

CHS is attempting a hostile takeover of Tenet, and refuted the allegations in an April 11 press release. In the release, CHS stated, “Tenet’s allegations are completely without merit and we intend to vigorously defend ourselves against these unfounded and irresponsible claims.”

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