CalPERS Begins Investigation Into Tenet Healthcare Billing Practices
CalPERS officials have asked Blue Cross of California to investigate whether the pension fund paid "too much" for certain services or unnecessary surgeries at several Tenet Healthcare hospitals statewide, the Sacramento Bee reports. CalPERS requested that officials from Blue Cross, which handles claims for 25% of the pension fund's 1.2 million members, review bills paid to Tenet hospitals in Redding, Modesto, San Luis Obispo and Los Angeles (Rapaport, Sacramento Bee, 12/14). In November, Service Employees International Union officials asked CalPERS to investigate the prices and medical practices of Tenet, the state's largest for-profit hospital chain. Officials from SEIU said that Tenet's average charge for a hospital stay in the 10 California counties in which the company operates was $33,547, more than 60% higher than at other local hospitals, according to an SEIU analysis of data from the Office of Statewide Health Planning and Development (California Healthline, 11/20). Tenet's billing practices have come under scrutiny after company officials announced earlier this month that the HHS Office of Inspector General will audit the company's hospitals to determine whether Tenet properly billed Medicare for outlier payments, which reimburse for unusually costly care. Tenet hospitals have been receiving an "extraordinarily high share" of these payments, according to government officials. Ken Weakley, an analyst for UBS Warburg, estimated that about 23% of Tenet's Medicare reimbursements come from outlier payments, compared to 6% on average for other comparable hospitals (California Healthline, 11/15).
According to the Bee, CalPERS officials also are considering whether to halt payments to Tenet's Redding Medical Center or to the two doctors who are accused of performing unnecessary surgeries at the facility. The investigation into Tenet hospitals is currently in a "fact-finding phase," according to CalPERS spokesperson Clark McKinley. CalPERS officials plan to elaborate on the investigation at a public meeting tomorrow. "We're not defining actions that might be taken, only asking Blue Cross advice about what might be warranted and prudent in the Tenet case," McKinley said. CalPERS officials hope to complete the investigation by mid-January. Pending the outcome of the investigation, CalPERS could take action against Tenet as early as February, the Bee reports (Sacramento Bee, 12/14).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.