Assembly Health Committee To Examine Tenet Billing Practices
The Assembly Health Committee today will examine billing practices at Tenet Healthcare's California hospitals and look into how Tenet charged more than other hospitals for complex care, the Contra Costa Times reports. Witnesses are expected to testify that Tenet "exploited loopholes" to garner higher payments from private insurers (Silber, Contra Costa Times, 2/6). Under standard contracts, private insurers pay hospitals a flat fee for charges until they reach a negotiated stop-loss amount, after which HMOs pay a percentage of the total charges (California Healthline, 2/3). Tenet's billing practices have been under scrutiny since company officials announced in November that the HHS Office of Inspector General would audit the company's hospitals to determine whether Tenet properly billed Medicare for outlier payments, which reimburse for unusually costly care. The Assembly Health Committee in December announced plans to investigate allegations that Tenet hospitals on average charge 63% more for services than other facilities in California and that Tenet increased charges as much as 31% in 1999 and raised prescription drug prices more than elevenfold at some hospitals (California Healthline, 12/5/02). In addition, witnesses are expected to testify that uninsured patients paid more for care at Tenet hospitals than other hospitals in the state because of Tenet's higher charges. The committee is expected to propose regulations that would eliminate the loopholes allowing hospitals to garner higher payments from private insurers and to address possible regulations on fees paid by uninsured patients. The Times reports that Tenet officials have already announced the company will change its policies to lower the fees charged to uninsured patients (Contra Costa Times, 2/6).
Meanwhile, Tenet is expected to present a report to the committee that challenges the allegation that it "gamed" insurers by raising its charges, the AP/Orange County Register reports. An analysis commissioned by Tenet and completed by Henry Zaretsky, former director of the Office of Statewide Health Planning and Development, found that Tenet received approximately $1,672 per patient per day for inpatient services, about $11 less than what other California hospitals received on average. The AP/Register reports that Tenet's analysis conflicts with reports, including one from the California Nurses Association, that concluded Tenet took advantage of higher reimbursement payments by raising charges (Brice, AP/Orange County Register, 2/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.