Tenet Agrees To Settle Allegations of Medicare Fraud
Tenet Healthcare has agreed to pay a $10 million civil penalty to settle allegations by Securities and Exchange Commission that the company inflated earnings through Medicare fraud, the Los Angeles Times reports. Tenet in 2006 agreed to pay $900 million to settle allegations of Medicare fraud by the Department of Justice.
The SEC allegations relate to the effect of the Medicare fraud on Tenet shareholders (Yi, Los Angeles Times, 4/3). According to SEC, Tenet from 1999 to 2002 inflated the gross charges for individual procedures reported to CMS to increase Medicare reimbursements.
Tenet officials neither admitted nor denied the allegations and said the company has made revisions to operations, financial safeguards, governance and compliance.
Peter Urbanowicz, general counsel for Tenet, said, "With this SEC settlement, we have now concluded all the investigations and litigation that arose after the outlier and other matters first surfaced in late October 2002" (Hughes, Wall Street Journal, 4/3).
SEC also has alleged that four Tenet officials committed fraud.
Former Tenet CFO David Dennis and former Chief Accounting Officer Raymond Mathiasen have agreed to settle the allegations for $150,000 and $240,000 respectively. Mathiasen also cannot serve on the board of a publicly traded company for five years.
The cases against former Tenet Chief Operating Officer Thomas Mackey and Christi Sulzbach, a former general counsel and chief compliance officer, will continue, SEC officials said (Los Angeles Times, 4/3).