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Tenet hospitals to pay $514 million settlement after admitting to illegal Medicaid kickback scheme

Tenet lawsuit

(NaturalNews) Tenet Healthcare Corp. has agreed to pay more than $514 million to settle a federal lawsuit involving two of the company's hospitals in Atlanta that were found guilty of participating in a Medicaid kickback and bribery scheme.

Two corporate subsidiaries of the Texas-based health system, Atlanta Medical Center and North Fulton Hospital, pleaded guilty to one count each of violating federal anti-kickback laws and defrauding the government's Medicaid and Medicare programs by accepting and paying kickbacks and bribes.

The settlement marked the close of the long-running whistleblower case, which was joined by the Department of Justice in 2014.

From the Daily Report:

"The two subsidiaries that owned the hospitals together will forfeit more than $145 million as part of the plea.

"Tenet Healthcare Corp. negotiated a separate nonprosecution agreement, agreeing to pay $368 million to the government, the state of Georgia and the state of South Carolina to resolve the civil whistleblower case, prosecutors said. Tenet announced Monday that the company also will pay an additional $3 million in related legal fees and expenses, bringing the total settlement to more than $516 million."

Kickback scheme revolved around pregnant illegal immigrants

The lawsuit was filed in 2009 on behalf of whistleblower Ralph Williams, former chief financial officer at a Tenet hospital in Monroe, Georgia. Williams revealed that for more than 10 years Tenet filed Medicaid claims for pregnant undocumented foreign Hispanic females who were referred to Tenet hospitals by two Georgia prenatal clinics, Clinica de la Mama and Clinica del Bebe:

"According to court papers, expectant indigent mothers were directed by the clinics to Tenet hospitals to make them more cost-efficient by boosting the volume of hospital deliveries and were misled into believing their costs associated with childbirth would be covered only at those hospitals."

The hospitals used "sham contracts" to cover kickback payments to the clinics, which referred more than 20,000 patients to the hospitals. The kickbacks were disguised as payments for translation, marketing and Medicaid eligibility determination services.

The clinics allegedly received as much as $20,000 per month from each hospital for the referrals they provided. Federal anti-kickback statutes prohibit hospitals from paying clinics, doctors or other parties for sending patients their way.

U.S. attorney John Horn said that Tenet's scheme "exploited some of the most vulnerable members of our community," and cheated the Medicaid system by taking advantage of a program "designed to ensure that underprivileged patients have choices in receiving care."

Of course, by doing so, Tenet also cheated American taxpayers who cover the cost of the Medicaid and Medicare system.

Whistleblower Williams will receive more than $84 million for his role in uncovering the scheme.

Tenet says it has now revamped its referral policies, and is taking steps to strengthen its auditing and oversight activities. The company must now operate for the next three years under the oversight of a compliance-monitoring program.

The company reported a loss of $59 million in the first quarter of this year, and has sold both Atlanta Medical Center and North Fulton Hospital, which now reportedly have no operating assets.

More evidence of a broken healthcare system

American taxpayers may now be wondering how such a blatantly fraudulent scheme was allowed to continue for over a decade without anyone's taking notice. One might easily suspect that similar kickback and bribery scams might be widespread under a federal system that so obviously failed to detect such a huge and long-running illegal referral racket.

This debacle is further evidence that the American healthcare system is not only broken, but also rife with corruption.

The next administration will face a major challenge if it seriously plans to address the failure of Obamacare and the sorry state of the federal Medicaid and Medicare system.





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