Feds Join Whistleblower Suit Against Tenet Healthcare

(RTTNews) - Tenet Healthcare (THC) vows to fight allegations that four of its hospitals paid kickbacks to obstetric clinics for referring undocumented women to their facilities for baby deliveries.

The Department of Justice has joined the fraud investigation into payments made to women's clinics in Georgia and South Carolina, the DOJ announced last week.

The government alleges that the kickbacks were disguised as payments for a variety of services allegedly provided by Hispanic Medical Management.

In addition to the four Tenet hospital hospitals, the suit alleges one Health Management Associates facility also offered illegal incentives.

"In a time when too many people were struggling to get healthcare for themselves and their children, Tenet and these hospitals plundered a system set up for those truly in need," U.S. Attorney for the Middle District of Georgia Michael J. Moore said. "This kind of scheme drives up costs for everyone, not just the vulnerable patients and groups like those targeted in this case."

The case is captioned United States ex rel. Williams v. Health Mgmt. Assocs. Inc., Tenet Healthcare, et al., No. 3:09-CV-130 (M.D. Ga.).

The lawsuit was reportedly filed by a former Health Management Associates manager under whistleblower provisions of the False Claims Act.

Tenet argues that the transactions with the clinics were proper, and will "vigorously defend against the allegations."

Tenet says the arrangement gave the underserved Hispanic community access to better health care before and during deliveries.

"By ensuring that pregnant women received prenatal care and appropriate treatment during birth, these programs increased the likelihood of a safe birth and a healthy baby while reducing the overall cost to state Medicaid programs," Tenet said.

Tenet is set to report quarterly earnings after the closing bell on Monday. Shares of the hospital operator closed Friday's session slightly lower at $46.67, but are up 8.7 percent year-to-date.

Earlier today, Tenet and Aetna Inc., (AET) announced a new, expanded two-year agreement providing members of Aetna's and Coventry's commercial and Medicare Advantage health plans with covered health care services at Tenet facilities.