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Recent Industry News

Healthcare Fraud

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The Department of Justice (DOJ) recently charged a former senior executive of Tenet Healthcare Corporation (Tenet).  John Holland was indicted for his alleged role in a scheme to defraud the U.S. Government, Georgia and South Carolina Medicaid Programs, and prospective patients of Tenet hospitals.   Holland formerly served as a Senior Vice President of Operations for Tenet’s Southern States Region.  He also served as Chief Executive Officer of North Fulton Medical Center, Inc. in Roswell, Georgia.

The indictment alleges that between 2000 and 2013, Holland caused the payment of bribes and kickbacks in return for patient referrals to Tenet hospitals and facilities.  Tenet operated an affiliated billing center located in Boca Raton, Florida, that assisted in processing Medicaid billings for these hospitals.  Holland affirmatively concealed the scheme by circumventing internal accounting controls and falsifying Tenet’s books, records and reports.  These kickbacks and bribes helped Tenet bill the Georgia and South Carolina Medicaid Programs for over $400 million.  Tenet obtained more than $149 million in Medicaid and Medicare funds from the resulting patient referrals.

Further, Holland made false and fraudulent statements to the Department of Health and Human Services (HHS) Office of Inspector General (OIG) in connection with Tenet’s 2006 Corporate Integrity Agreement (CIA).  Holland falsely certified that Tenet was in compliance with the Medicare and Medicaid Conditions of Participation and the terms of the CIA.  Holland’s certifications were included in the annual reports that Tenet submitted to the OIG.  During the duration of the CIA, Tenet received over $10 billion in improper payments from federal health care programs.

More recently, on October 19, 2016, North Fulton Medical Center, Inc. and Atlanta Medical Center, Inc. pleaded guilty to conspiring to defraud the U.S. Government and violate the Anti-Kickback Statute (AKS).  Tenet subsidiary Tenet Health System Medical, Inc. (THSM) and its subsidiaries also entered into a non-prosecution agreement (NPA) with the U.S. Government.  Under the terms of the NPA, THSM and Tenet will avoid prosecution if they cooperate with the ongoing investigation and enhance their compliance program, ethics program, and internal controls.  Tenet also agreed to retain an independent compliance monitor to address and prevent further AKS violations.  Tenet and its subsidiaries will pay over $513 million to resolve this matter.

The DOJ Justice News article is available at:

https://www.justice.gov/opa/pr/former-executive-tenet-healthcare-corporation-charged-alleged-role-400-million-scheme-defraud.

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