Tenet fraud probe sig­nals feds’ grow­ing in­ter­est in crim­i­nal cases

Modern Healthcare - - NEWS - By Lisa Schencker

“You have to have some level of se­nior man­age­ment in­volved and some sort of pat­tern that ... this was part of a strat­egy or pol­icy or in­tent of the or­ga­ni­za­tion to bill in this way.” Sh­eryl Skol­nick Direc­tor of re­search and health­care an­a­lyst Mizuho Se­cu­ri­ties USA

The Jus­tice Depart­ment has launched a crim­i­nal in­ves­ti­ga­tion into pre­vi­ously dis­closed al­le­ga­tions that Tenet Health­care Corp. hos­pi­tals paid kick­backs for ma­ter­nity re­fer­rals. The probe re­flects a grow­ing ap­petite among pros­e­cu­tors to pur­sue crim­i­nal charges in cor­po­rate health­care fraud cases.

In a fil­ing to the Se­cu­ri­ties and Ex­change Com­mis­sion this month, Tenet said four of its hos­pi­tals in Ge­or­gia and South Carolina are un­der crim­i­nal in­ves­ti­ga­tion re­lated to a whistle­blower law­suit filed in 2009. Tenet spokesman Donn Walker de­clined to com­ment fur­ther.

Mean­while, the Jus­tice Depart­ment has adopted a pro­ce­dure to make sure its civil di­vi­sion shares all new whis­tle- blower com­plaints with its crim­i­nal di­vi­sion to al­low the depart­ment to con­duct par­al­lel in­ves­ti­ga­tions.

In the Tenet case, the civil com­plaint al­leges that the hos­pi­tals paid kick­backs to a com­pany called His­panic Med­i­cal Man­age­ment to send preg­nant women from the com­pany’s pre­na­tal clin­ics to Tenet hos­pi­tals to de­liver their ba­bies. Those pa­tients— most of whom were in the coun­try il­le­gally—would then be el­i­gi­ble for emer­gency Med­i­caid cov­er­age. The gov­ern­ment also al­leged the hos­pi­tals in­cluded those im­prop­erly re­ferred pa­tients when seek­ing sup­ple­men­tal Medi­care fund­ing for treat­ing unin­sured and low-in­come pa­tients.

Tenet has coun­tered in court doc­u­ments that its hos­pi­tals’ con­tracts with His­panic Med­i­cal Man­age­ment were meant to “cre­ate a cul­tur­ally sen­si­tive and at­trac­tive pre­na­tal en­vi­ron­ment for women.” The man­age­ment com­pany has pro­vided trans­la­tors and com­mu­nity out­reach, help­ing fam­i­lies ap­ply for Med­i­caid cov­er­age, ac­cord­ing to Tenet, which called the ef­forts an “at­trac­tive so­lu­tion” for han­dling an un­der­served pop­u­la­tion.

A for­mer His­panic Med­i­cal Man­age­ment owner and a for­mer Tenet em­ployee have been crim­i­nally charged in the mat­ter. The civil suit has been put on hold pending fur­ther crim­i­nal pro­ceed­ings, ac­cord­ing to Tenet’s SEC fil­ing.

Tenet of­fi­cials said the Jus­tice Depart­ment in­formed the com­pany on April 10 that the four hospi- tals named in the civil suit are also un­der crim­i­nal in­ves­ti­ga­tion. Those hos­pi­tals are: At­lanta Med­i­cal Cen­ter; Hil­ton Head (S.C.) Hos­pi­tal; North Ful­ton Hos­pi­tal, Roswell, Ga.; and Spald­ing Re­gional Med­i­cal Cen­ter, Grif­fin, Ga.

Crim­i­nal in­ves­ti­ga­tions and charges in big health­care fraud cases are be­com­ing more com­mon, said Sh­eryl Skol­nick, direc­tor of re­search at Mizuho Se­cu­ri­ties USA, even though it’s more dif­fi­cult to bring crim­i­nal than civil charges be­cause there must be proof of in­tent.

“You have to have some level of se­nior man­age­ment in­volved and some sort of pat­tern that … this was part of a strat­egy or pol­icy or in­tent of the or­ga­ni­za­tion to bill in this way,” Skol­nick said.

Last week, Les­lie Cald­well, the Jus­tice Depart­ment’s as­sis­tant at­tor­ney gen­eral for its crim­i­nal di­vi­sion, stressed her di­vi­sion’s com­mit­ment to fraud pros­e­cu­tions dur­ing re­marks at an Amer­i­can Bar As­so­ci­a­tion con­fer­ence on health­care fraud. Un­der the Jus­tice Depart­ment’s new pol­icy, she said, all new whis­tle-blower com­plaints in the civil di­vi­sion are shared with her di­vi­sion. “Par­al­lel in­ves­ti­ga­tions max­i­mize the depart­ment’s abil­ity to se­cure the ap­pro­pri­ate out­come in each mat­ter— whether it be fi­nan­cial penal­ties, resti­tu­tion, fed­eral pro­gram ex­clu­sion or crim­i­nal pros­e­cu­tion of both cor­po­ra­tions and in­di­vid­u­als,” Cald­well said.

Pa­trick Burns, co-direc­tor of the Tax­pay­ers Against Fraud Ed­u­ca­tion Fund, a not-for-profit partly funded by whis­tle-blow­ers and law firms rep­re­sent­ing them, said pros­e­cu­tors are seek­ing to max­i­mize fi­nan­cial re­turns for the gov­ern­ment in large cases, es­pe­cially as the re­cov­ery amounts climb.

In a sep­a­rate mat­ter, Tenet also dis­closed this month that it is in dis­cus­sions with the Jus­tice Depart­ment over a po­ten­tial set­tle­ment in­volv­ing the cor­po­ra­tion’s use of im­plantable de­fib­ril­la­tors at 56 hos­pi­tals from 2002 to 2010.

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