Justice Department Launches Investigation into Tenet’s Medicare Outlier Payments
The Justice Department yesterday served Tenet Healthcare, the nation's second largest for-profit hospital chain, with an administrative subpoena seeking documents related to its Medicare outlier reimbursements, the New York Times reports. The move marks the third Justice Department investigation of Tenet in recent months and comes as HHS also is looking into the company's outlier payments, which reimburse for unusually costly care (Pollack, New York Times, 1/3). In November, the HHS Office of Inspector General began to audit the company's hospitals in an attempt to determine whether Tenet properly billed Medicare; government officials say the company has been receiving an "extraordinarily high share" of outlier payments (California Healthline, 11/13/02). The new Justice Department investigation marks the first time the DOJ is looking into outlier payments, meaning that Tenet could face civil or criminal charges, the Times reports. Tenet has acknowledged that its policy of raising hospital charges -- which are used to calculate outlier payments -- resulted in "unusually high" reimbursements, contributing significantly to its profit growth in recent years. The Justice Department has requested documents from Tenet and 19 of its 113 hospitals for a period from Jan. 1, 1997, to the present. Fifteen of the hospitals are in California, with the rest in Texas, Pennsylvania and Louisiana (New York Times, 1/3).
Tenet officials did not disclose what documents were requested, stating only that they relate to Medicare payments (Buchanan, San Francisco Chronicle, 1/3). "Given the scrutiny and controversy regarding outlier payments, it is not surprising that the Justice Department is interested in reviewing the matter," Christi Sulzbach, Tenet's general counsel, said (Friedland, Wall Street Journal, 1/3). The other Justice Department investigations focus on a Tenet hospital in Redding where a cardiologist and heart surgeon performed unnecessary surgeries, and on a hospital in San Diego that may have offered "improper incentives" to doctors for referring patients to Tenet facilities (New York Times, 1/3).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.