Dallas-Based Tenet Healthcare Pays More Than $42 Million to Settle Allegations of Improperly Billing Medicare
Settlement Related to Company’s Inpatient Rehabilitation Facilities

WASHINGTON—Tenet Healthcare Corporation has agreed to pay the United States $42.75 million to settle allegations that it violated the False Claims Act by overbilling the federal Medicare program, the Justice Department announced today.

The settlement resolves allegations pertaining to the various inpatient rehabilitation facilities (IRFs) that Dallas-based Tenet has owned and operated throughout the country. IRFs are designed for patients who need an intense rehabilitation program that requires a multidisciplinary, coordinated team approach to improve their ability to function. Because the patients treated at these facilities require more intensive rehabilitation therapy and closer medical supervision than is provided in other settings, such as acute care hospitals or skilled nursing facilities, Medicare generally pays IRFs at a higher rate for rehabilitation care than it pays for such care in other settings.

The Justice Department alleged that, between May 15, 2005 and December 31, 2007, Tenet improperly billed Medicare for the treatment of patients at its IRFs when, in fact, these patient stays did not meet the standards to qualify for an IRF admission. Today’s settlement is the United States’ single largest recovery pertaining to inappropriate admissions to IRFs.

“The Department of Justice is committed to protecting the Medicare program against all types of overcharging by health care providers,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “As today’s settlement demonstrates, inpatient rehabilitation facilities will not be permitted to bill Medicare for patients who were not qualified for admission.”

“This settlement demonstrates our office’s continued commitment to protect crucial Medicare dollars from fraud and abuse. Inpatient rehabilitation facilities are expensive, and Medicare dollars should be reserved for patients who need the services—not for hospitals seeking to make money through improper billing,” said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia.

“Tenet disclosed this matter to my office as required under its corporate integrity agreement (CIA),” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “Our CIA reporting provisions have resulted in recovery of millions of taxpayer dollars back into the Medicare program.”

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services, in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $6.6 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $8.8 billion.

Acting Assistant Attorney General Delery and U.S. Attorney Yates expressed appreciation to the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Northern District of Georgia, the FBI, and the Department of Health and Human Services’ Office of Inspector General and Centers for Medicare and Medicaid Services for their collaboration in investigating this matter.