Tenet Healthcare Inc., a multinational healthcare services conglomerate worth over $18 billion, and two of its subsidiary companies have committed to pay out a total of $513 million to the United States government after it was revealed to be defrauding federal and state government agencies through an egregious scheme where kickback payments were doled out in exchange for patient referrals.

The two subsidiary companies, Atlanta Medical Center Inc. and North Fulton Medical Center Inc., will plead guilty to a healthcare kickback scheme that unnecessarily funneled pregnant patients to Tenet Healthcare facilities for kickback payments, which is in direct violation of the Anti-Kickback Statute, which “prohibits the exchange (or offer to exchange), of anything of value, in an effort to induce (or reward) the referral of federal health care program business.”  Tenet Healthcare Inc. agreed to pay out $368 million to the federal government, the state of Georgia and the state of South Carolina in response to multiple civil court claims brought against them under the authority of the federal False Claims Act and Georgia’s local statute equivalent. The federal government will receive over $244 million of that, Georgia will receive over $122 million, South Carolina will receive $892,125 and Ralph D. Williams, who filed the initial case in Georgia, will receive about $85 million.

“Using their positions of trust, health providers – after receiving payments from Tenet – sent expectant women specifically to Tenet hospitals,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of Inspector General. “Patients were often directed to Tenet facilities miles and miles from their homes and on their journeys passed other hospitals that could have provided needed care.  These women were thereby placed at increased risk during one of the most vulnerable points in their lives.”  The depth and scale of the illicit operation is unprecedented in the area and is amongst the most lucrative of such schemes ever brought to light in the United States. The Attorney General’s office praised collaborative work from local, state and federal litigators in helping shed light on the corruption.

“Our Medicaid system is premised on a patient’s ability to make an informed choice about where to seek care without undue interference from those seeking to make a profit,” said U.S. Attorney John Horn of the Northern District of Georgia.  “Tenet cheated the Medicaid system by paying bribes and kickbacks to a pre-natal clinic to unlawfully refer over 20,000 Medicaid patients to the hospitals.  In so doing, they exploited some of the most vulnerable members of our community and took advantage of a payment system designed to ensure that underprivileged patients have choices in receiving care.”

No company, regardless of size, can toy with its patients’ care for profit

The Tenet case is another sad reminder of how companies of considerable wealth, breadth and success just cannot seem to resist greedy, shady and illegal tactics to earn more patients and secure more profits. This scheme directly put patients second and profit margins for the parent and subsidiary companies first.  This is not Tenet’s first major scandal either. Since the early 1990s, Tenet has been involved in scandals involving hospitalizing and overcharging patients for unnecessary psychiatric care, performing dangerous and unnecessary heart surgeries on over 600 patients, and was caught in another Medicare fraud scandal in 2006. In all of these cases, rather than accept blame or go to court, they settled for hundreds of millions of dollars combined to avoid admitting any fault. Continue reading

Skilled nursing facilities are institutions that provide rehabilitation, medical, and nursing services for patients on a short or long-term basis. Under the Social Security Act, these types of services are covered by Medicare if they are medically necessary. Unfortunately, some skilled nursing facilities and nursing homes put profits above the health and safety of patients and residents. In some cases, they even commit insurance fraud. If you suspect that a skilled nursing facility is committing Medicare fraud, contact a Boston whistleblower law firm today.

$1 Billion Medicare Scam at Miami SNF Chain

In the largest health care fraud case in U.S. history, three Florida health care execs were recently charged by the Justice Department for their part in a $1 billion Medicare scam. Philip Esformes, the owner of a skilled nursing chain with more than 30 Miami-area facilities is charged with fraudulent activity against Medicare. According to the recently released 34-page indictment, Esformes conspired with two other people to provide medically unnecessary services and treatments to patients. The indictment also alleges that the trio received kickbacks for referring patients to other health care providers. To conceal their illegal actions, many of the kickbacks were paid in cash or disguised as charitable donations.

Medically-necessary admission to a skilled nursing facility is generally covered by Medicare and other government health care programs. However, several qualifying circumstances must be present to obtain reimbursement. If these requirements are not met, or the facility bills for treatment that is not medically necessary, the facility may be guilty of Medicare fraud.

RUG Upcoding

There is another common form of Medicare fraud in skilled nursing facilities: RUG upcoding. Using information provided by the facility, Medicare categorizes each patient into one of seven categories using a program called the RUG III Grouper. The assigned category is directly related to the per diem Medicare payment received by the facility. Unfortunately, some facilities falsify reported information so that Medicare places the patient in a high-paying category.

Federal False Claims Act

If you are aware of fraudulent activity in a skilled nursing facility or nursing home, you should report this information to a Boston whistleblower attorney immediately. As this type of fraud is a violation of the False Claims Act, whistleblowers who come forward with information that leads to financial recovery are often rewarded with substantial sums of money. These rewards act as an incentive to encourage individuals to report fraud and abuse against the government. Whistleblower compensation is generally a percentage of the recovered funds. Considering that some fraud cases recover tens of millions of dollars, whistleblower compensation can be quite significant.  Continue reading