Tenet Healthcare Paying $54 Million in Fraud Settlement

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The basis for most surgery in the USA is profit, not the medical necessity of

the patient and it has been that way for a long time..

 

F.

 

http://www.nytimes.com/2003/08/07/business/07CARE.html?th

 

Tenet Healthcare Paying $54 Million in Fraud Settlement

 

August 7, 2003Tenet Healthcare Paying $54 Million in Fraud SettlementBy KURT

EICHENWALD

 

 

The Tenet Healthcare Corporation agreed yesterday to pay $54 million to resolve

government accusations that doctors at a hospital in Northern California

conducted unnecessary heart procedures and operations on hundreds of patients.

 

The settlement is the largest in a case involving what is known as medical

necessity fraud, or billing government health programs for tests and treatments

that the patient's condition did not require.

 

The settlement pre-empts any civil and criminal charges by the Justice

Department against Tenet, its hospital division and the hospital itself, which

did not admit wrongdoing. Nevertheless, in settling, Tenet signaled it would

rather pay a record fine than argue in court that there was a medical reason for

the patients to undergo the procedures or operations.

 

Under the agreement, the Department of Health and Human Services is allowed to

continue its own inquiry to determine whether Tenet and its hospitals should be

barred from federal health programs, including Medicare. Criminal and civil

investigations of individuals are continuing. Moreover, former patients can

proceed with their lawsuits against Tenet, the hospital and the doctors.

 

The existence of the government inquiry into accusations of unnecessary

procedures and operations at the Tenet hospital, which is in Redding, Calif.,

has been known for more than 10 months. But throughout that time, defenders of

the doctors who are at the center of the investigation have treated the case as

simply too outrageous to be believed and repeatedly cited the absence of any

government action as proof.

 

But now, experts in law and health care said, the settlement raises anew the

questions of what was happening at the hospital, the Redding Medical Center.

 

" This is not just a health care fraud that takes dollars out of the system, "

said Neil Getnick, a partner at Getnick & Getnick, which specializes in

antifraud litigation. " This is rank patient abuse. This is as bad as it gets. "

 

Under the terms of the settlement, which covers procedures done at the hospital

from 1997 to 2002, Tenet must cooperate with existing civil and criminal

investigations into individuals who may have participated in billing government

health programs like Medicare for unnecessary procedures. Citing those

inquiries, federal prosecutors declined to provide details of their evidence but

suggested that it was substantial.

 

" The allegations in this case were extremely serious, and we treated them as

such, " said Michael A. Hirst, the assistant United States attorney handling the

case. " Although defendants do not admit liability in the settlement, there are

54 million reasons why we believe our investigation was effective and our

evidence compelling. "

 

Under the settlement, Tenet agreed to a strict compliance program at the Redding

Medical Center to ensure that no unnecessary cardiac procedures are conducted in

the future. That program includes requirements for six random audits of the

cardiology program at the center over the next three years. The results of those

audits must be turned over to the government.

 

Tenet has been battered by a series of financial scandals in the months since

the Redding Medical Center investigation was made public, with a result that

much of its senior management — including Jeffrey C. Barbakow, its longtime

chief executive — have been replaced. Yesterday, the new management team

portrayed the settlement as an effort by Tenet to close a difficult chapter in

its history.

 

" Tenet's new leadership team is pleased that we were able to work cooperatively

with federal and state authorities to bring closure to one of the most serious

matters facing the company, " Trevor Fetter, Tenet's president and acting chief

executive, said in a statement. " We made a strategic business decision to

negotiate a reasonable settlement in a spirit of cooperation in order to put

this matter behind us. "

 

Tenet, based in Santa Barbara, Calif., also faces an investigation by the

Justice Department into whether it artificially increased prices at some

hospitals to inflate the payments it received under a complex formula used by

Medicare.

 

Shares of Tenet fell 11 cents, to $13.05, on the New York Stock Exchange before

trading was halted about 2:30 p.m. in advance of the announcement of the

settlement. However, they rose as high as $14.04 after hours. Tenet shares have

lost almost three-quarters of their value since the scandals at the company

began surfacing last year.

 

The investigation of the Redding Medical Center first emerged last October, when

F.B.I. agents raided the hospital and the offices of Dr. Chae Hyun Moon and Dr.

Fidel Realyvasquez. Dr. Moon was the longtime chief of the center's cardiology

department, while Dr. Realyvasquez was its top cardiac surgeon.

 

In the months since then, Redding's cardiology program was effectively — albeit

temporarily — shut down, while both Dr. Moon and Dr. Realyvasquez suspended

their practices. Recently, Dr. Moon agreed to a suspension of his medical

license pending resolution of the investigation.

 

Lawyers for the two doctors — who have not been charged with any wrongdoing and

who have steadfastly maintained their innocence — said that they were somewhat

heartened by the Tenet settlement, largely because of the government's decision

not to pursue criminal charges against the hospital.

 

" The government willingness to relinquish any criminal allegations against

Redding and Tenet Healthcare as part of a civil compromise indicates that the

criminal investigation has little merit, " said Malcolm Segal, a lawyer for Dr.

Realyvasquez. " The government does not ordinarily accept payment of money in a

civil case when it believes it has a viable criminal charge. "

 

Matthew Jacobs, a lawyer for Dr. Moon, echoed those sentiments. " The government

quite correctly decided not to pursue criminal sanctions against " the Redding

Medical Center, he said, adding, " I would hope that the government would choose

to treat Dr. Moon the same way. "

 

But regardless of the outcome of the criminal case, both doctors still have huge

civil exposure from former patients, as does Tenet and the Redding Medical

Center. Plaintiffs' lawyers handling those cases heralded the settlement

yesterday, adding that the evidence they had seen so far was overwhelming.

 

" We have over 100 clients where we have confirmed that they had unnecessary

cardiac bypass surgery, " said Dugan Barr, a Redding lawyer who represents

numerous former patients of the doctors, who added that he saw the settlement as

a positive development. " I can't imagine that Tenet did this if they were not

looking to get rid of the whole thing. "

 

 

Copyright 2003 The New York Times Company |