Tenet Hospitals in California Charge More Than Competing Facilities
Tenet Healthcare, the largest hospital operator in California, charges considerably more on average for medical procedures than do competing hospitals, according to state data, the San Francisco Chronicle reports (Said, San Francisco Chronicle, 11/15). Tenet has come under scrutiny over its billing practices 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 approximately 23% of Tenet's Medicare reimbursements come from outlier payments, compared to 6% on average for other comparable hospitals (California Healthline, 11/7). According to patient discharge data from the Office of Statewide Health Planning and Development, Tenet's three hospitals in Contra Costa County -- Doctors Medical Center facilities in San Pablo and Pinole and San Ramon Regional Medical Center -- charged $51,040 on average for all in-patient stays in 2000, 98% more than the $25,827 average per in-patient stay charged by the county's other six hospitals. In Santa Clara County, Tenet's Community Hospital of Los Gatos charged $40,109 for in-patient stays on average in 2000, 99% higher than the $20,148 the county's other 10 hospitals charged on average.
In Shasta County, Tenet's charges at Redding Medical Center "stand out even more," with heart procedures "more common" and "dramatically more expensive" than at the county's other hospitals, the Chronicle reports (San Francisco Chronicle, 11/15). Tenet officials in late October announced that federal officials were seeking information from Redding Medical Center for an investigation of a cardiologist and a cardiothoracic specialist who might have performed unnecessary surgeries and potentially defrauded Medicare (California Healthline, 11/1). RMC in 2000 performed 532 coronary bypasses charging an average of $228,793, while the county's four other hospitals performed a total of 206 such procedures and charged $80,500 each on average. In addition, RMC performed 604 pacemaker or stent implants in 2000, at an average cost of $89,787 per procedure, while the county's other hospitals performed 264 similar procedures and charged on average $45,500 per procedure. While hospitals do not collect the full amount they charge, the charges are used to calculate Medicare outlier payments and can also raise private insurance reimbursements if the charges cost more than the insurer's set per diem, the Chronicle reports. Tenet Spokesperson Greg Harrison acknowledged that his company's rates are higher than other hospitals', adding, "We're treating more complex cases or sicker patients and more of them. That accounts for some of the disparity." He said the company is reviewing its pricing policies (San Francisco Chronicle, 11/15).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.