Tenet Healthcare to pay $514M to resolve kickback allegations

More than three years after federal agents began investigating Tenet Healthcare for an alleged kickback scheme, the health system says it has reached an agreement to pay $514 million in civil and criminal penalties, according to a quarterly financial filing.

Shortly after the federal government sent subpoenas to the health system regarding its relationship with an Atlanta-based clinic that served undocumented Hispanic women, the former CFO of Tenet parent company Health Management Associates filed a whistleblower lawsuit alleging the system paid kickbacks to the clinic to boost Medicaid revenue. Last year, Tenet revealed it was facing a parallel criminal probe into payments designed to send pregnant Hispanic women to Tenet-owned hospitals.

Earlier this year, Tenet said it had set aside $407 million to resolve the fraud allegations, but the recent filing suggests the company “believes it has reached an agreement in principle” with the Department of Justice. If the agreement is finalized, Tenet would pay $368 million in civil penalties and $145.8 million in criminal penalties.

The settlement would also require Tenet to enter into a corporate integrity agreement with the government and have a federally appointed corporate monitor assess compliance for the next three years.

Last month, the DOJ announced a proposal that would double civil penalties for those that violate the False Claims Act and Anti-Kickback Statue. Its proposal would take effect this month.

- here’s Tenet’s financial filing