Tenet Settles Medicare Payment Suit
Tenet Healthcare on Thursday said it has agreed to pay $725 million to settle several federal investigations into whether the company overbilled Medicare, the AP/San Francisco Chronicle reports (AP/San Francisco Chronicle, 6/29). The settlement covers a Department of Justice investigation into inflated outliers, payments hospitals receive from Medicare for treating the sickest patients, that were first questioned in October 2002.
Outlier payments -- which were implemented to encourage hospitals to accept very sick patients -- are based on a hospital's "chargemaster," or list of prices that most patients do not pay fully. Tenet raised chargemaster prices "sharply," bringing the company "big supplemental payments from its managed care customers," the Wall Street Journal reports.
The settlement also resolves a DOJ civil suit that accused Tenet of improper Medicare coding, as well as allegations from U.S. attorneys of improper physician recruitment in El Paso, Texas; Los Angeles; Memphis, Tenn.; New Orleans; St. Louis; and San Francisco (Rundle, Wall Street Journal, 6/29).
Tenet will pay $725 million over four years and also will waive its claim on $175 million in past Medicare payments. The settlement does not include any findings that Tenet broke the law (AP/San Francisco Chronicle, 6/29).