Tenet Healthcare is in the news again. And the news isn’t very good. Yesterday’s headline in the Atlanta Business Chronicle was “Tenet Healthcare Agrees to Plead Guilty in Atlanta Kickback Scheme.” Today’s Dallas Morning News says, “Investors Warned of Tenet Healthcare’s Legal Payouts, Streak of Losses.” Both stories are about a tentative deal between prosecutors and Tenet Healthcare over allegations that the company gave kickbacks to local companies essentially to buy referrals of thousands of undocumented pregnant Hispanic women. The proposed civil settlement alone is $513,000,000.
The latest story about Tenet’s despicable attempts to rip off the American public is worth telling. So is the history of the company, a shameless company that has paid billions of dollars in fines, pleaded guilty to multiple felonies, paid millions to families of patients who suffered horrible deaths at a Tenet facility in New Orleans, and paid tens of millions more to settle charges it underpaid workers. With the exception of the criminal cases, Tenet is often able to settle with no admission of wrongdoing.
As I began writing this story, I realized that over the last few years we have written many other stories about Tenet Healthcare… more than any other corporate wrongdoer except Bank of America (and in these times, that says a lot). When will it end?
It may sooner than you think. With more and more healthcare workers willing to blow the whistle, Tenet’s days may be numbered. Are we worried about the company’s 130,000 workers? We think that if and when the government finally shuts them down, plenty of other healthcare companies will snap up Tenet’s many hospitals and their great workforce. Our problem isn’t with Tenet’s healthcare professionals, it is with the company’s management.
We have acquired so much information about Tenet from our own investigations and court records that we have decided to break this post into chapters. This chapter deals with Tenet’s latest shenanigans and its ham fisted attempt to pay illegal kickbacks in return for referrals of pregnant Hispanics, many of them undocumented.
The next chapter will contain a history of Tenet Healthcare and how it became one of the largest (and most corrupt) healthcare companies in the United States.
Tenet Healthcare & Hispanic Medical Management
This story begins in 2009 with a whistleblower. Like so many other successful Medicare fraud prosecutions, most big frauds are exposed only because a brave whistleblower gets tired of watching greed and fraud and decides to blow the whistle.
Our hero in this case is Ralph Williams. An accountant by profession, Williams had over 30 years experience in the healthcare field. His career path led to a job at Health Management Associates or “HMA.” Like Tenet, HMA is a for-profit healthcare company. According to court records, HMA operates over 70 hospitals in the United States. Three of those hospitals are in Georgia.
After 30 years of honest, hard work, Williams reached the pinnacle of his career. He became the Chief Financial Officer at an HMA hospital located in Monroe, Georgia. It didn’t take Williams long to figure out that his company and Tenet were up to no good.
Based on his own knowledge from seeing all the hospital’s bills and invoices, Williams figured out that HMA and Tenet were paying a company called Hispanic Medical Management for patient referrals. Hispanic Medical Management operates under the names Clinica de la Mama and is sometimes called Clinica de la Bebe. For this post, we will simply call them Clinica.
William’s complaint says “Defendant Clinica recruits pregnant, undocumented Hispanic women to its prenatal clinics with the well-publicized slogan, ‘we care about your health, not your immigration status.’
“Clinica directs this vulnerable and malleable population of patients who will be Medicaid
beneficiaries when they deliver their babies, from its clinics to the HMA and Tenet Hospitals who pay for the referrals.”
Tenet then intentionally pays illegal kickbacks for Clinica Medicaid patient referrals and submit false or fraudulent claims for payment to Medicaid for obstetric services provided to Clinica patients. Everyone makes money, except taxpayers of course who are footing the bills.
Even though undocumented aliens are not eligible for regular Medicaid coverage, the
Medicaid program includes Emergency Medical Assistance that will pay for emergency services provided to eligible undocumented aliens. Childbirth is considered one such emergency service.
Medicaid Fraud and Illegal Kickbacks
Paying or accepting bribes or kickbacks for patients is illegal. Under the federal Anti Kickback Statute, it is also a crime. Congress and Medicare regulators believe that healthcare decisions should be based on medical need and the best interest of the patient, not on who pays the highest bribe or kickback. In making the practice a crime, Congress declared that making payments to entities who can steer or
direct patients, such as Clinica, could influence healthcare decisions and result medically unnecessary services or in services that are of poor quality, or even harmful to a vulnerable patient population.
To hide the illegal bribes, Williams discovered that Clinica was billing for “interpreter services.” Although called interpreter services, Williams quickly figured out the contract was hoax. In the words of Williams, “With the Clinica kickback scheme, the hospital buying the referred Medicaid
beneficiaries obtains increased revenue from the Medicaid-covered deliveries.”
Like most whistleblowers we know, Williams first tried to correct the problem in house. As he investigated more, he learned from a senior HMA official that they “cloned” their kickback model from Tenet for one primary reason, it worked. Soon it became apparent that both HMA and Tenet were engaged in this illegal scheme at multiple hospitals.
After voicing his concerns, Williams was fired. He was given no reason for his termination.
It has taken 7 long years for Williams whistleblower claims to be resolved. Today we can happily report that Tenet Healthcare will pay $513 million to settle its portion of the lawsuit.
False Claims Act and Whistleblower Awards
Williams filed his claim under the federal and Georgia False Claims Acts. These laws allow a whistleblower with inside information of fraud involving Medicare or Medicaid to collect up to 30% of whatever the government collects. For Williams, that could be a check between $77 and $153 million.
If you have information about healthcare fraud, be careful how you report your suspicions. Call a Medicare fraud hotline and you may get just $1000 and not the tens of millions that Williams will receive. Tell your boss and you may get fired just like Williams. Tell your friends and there may be a public disclosure which could later prevent you from getting an award.
So what should you do? The only way to earn a large percentage award is by filing a complaint under the False Claims Act.
Need help? Worried about costs or legal fees? Don’t be. That’s our job.
MahanyLaw – America’s Whistleblower Lawyers
Want more info on Tenet Healthcare?
Our main story can be found in the link above. You can also read these stories:
Tenet kickbacks and questionable real estate arrangements
Two whistleblowers receive $5 million
Dallas Morning News article