Corporate Compliance

FL suit alleges Tenet took $1 billion in improper reimbursement

Compliance Monitor, March 9, 2005

The state of Florida on March 2 filed a lawsuit against Tenet Healthcare Corp. charging the nation's second-largest for-profit hospital operator with racketeering while alleging a scheme that brought in $1 billion in improper Medicare payments, Reuters reported.

According to the lawsuit, filed in the Miami-based U.S. District Court for the Southern District of Florida, Tenet ran a billing scheme that not only benefitted its operations, but also prevented public hospitals from obtaining millions of Medicare dollars.

Tenet billing practices have been under government scrutiny since 2002, Reuters reported, a fact that a company spokesperson says influenced the suit. "This appears to be a lawsuit motivated by a number of our Florida competitors and critics," Tenet spokesperson Steven Campanini said. "It is specious and unwarranted. We will vigorously defend ourselves against these charges."

The suit claims that Tenet inflated its bills to the extent that it raised the threshold at which hospitals could make claims from Medicare's Outlier Pool. This process kept other facilities from getting their just reimbursement, the state alleges.

"The evidence will show that Tenet gamed the system to enhance its profit margin at the expense of public hospitals," Florida Attorney General Charlie Crist said in a statement. Thirteen Florida hospitals joined the state in filing this suit. The plaintiffs will be seeking damages in the millions of dollars, Crist said, which could be tripled under racketeering statutes, Reuters reported.

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