Lawmakers Promise Probe of Other Hospital Chains After Hearing Testimony About Tenet Pricing
Executives from Tenet Healthcare, the nation's second-largest hospital chain, yesterday told Assembly Health Committee members that the company did not reap higher-than-average daily profits from patient care compared to other hospitals in the state, the Sacramento Bee reports. However, CalPERS officials testified that they paid "far more on average" -- $15,213 per patient visit, or 46% more -- for state workers' care at Tenet-owned hospitals than at other hospital chains, the Bee reports (Rapaport, Sacramento Bee, 2/7). Dr. Jeff Kamil, vice president and corporate medical director for Blue Cross of California, which prepared the cost report with CalPERS, said Tenet "abused" the "good-faith relationship" by overcharging, the San Francisco Chronicle reports. In response, Gustavo Valdespino, senior vice president of operations at Tenet, said it is "easy to single out one facility where the charges have been aggressive and maybe excessive, but there are other facilities where the charges may be lower" (Salladay, San Francisco Chronicle, 2/7). The hearing stemmed from allegations that Tenet has overcharged the state for prescription drugs and care. 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, 2/6). In response to the testimony, lawmakers said they plan to investigate other hospital chains in the "dysfunctional" payment system (San Francisco Chronicle, 2/7).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.