The taint of past scandal has revisited Tenet Healthcare Corp., which agreed to pay about $100 million to about 700 former patients to settle claims of abuse and false imprisonment at psychiatric hospitals during the late 1980s and early 1990s, Tenet executives and legal sources confirmed Wednesday.
The settlements were reached over the last several weeks as Santa Barbara-based Tenet pursued merger talks with rival Columbia/HCA Healthcare Corp., which is reeling from a major scandal of its own. Earlier this week, those talks were put on hold by Columbia/HCA after a major management shake-up at the firm.
Tenet, the nation's second-largest for-profit hospital chain after Columbia, is expected to disclose some details of the agreement today when it reports financial results for its fiscal year ended May 31, sources said.
The patient lawsuits represent about 70% of roughly 1,000 claims that were pending against Tenet as a result of a scandal that rocked the company in the early 1990s.
Sources said Tenet paid about $83 million to settle about 650 cases filed in Conroe, Texas, and about $13 million to settle about 60 lawsuits filed in Fort Worth. They said a group of Dallas doctors, mostly psychiatrists, agreed to pay about $17 million in compensation to their former patients.
The settlement included strict confidentiality terms sought by Tenet and the doctors, Tenet executives said. The settlement was first reported Wednesday by the New York Times.
In 1994, Tenet, then called National Medical Enterprises, pleaded guilty to federal conspiracy charges for paying kickbacks and bribes to doctors in the late 1980s through 1991. The company paid about $375 million in fines and penalties--the largest health fraud settlement in U.S. history to date.
Tenet was forced to sell its psychiatric hospital division, Psychiatric Institutes of America, as a condition of its federal settlement.
Sources said there was no admission of wrongdoing by Tenet or the doctors in the settlement.
Among its past settlements of hundreds of patient lawsuits alleging physical mistreatment, kidnapping and abuse, Tenet is known to have admitted responsibility for any wrongdoing in only one instance. That came in a 1994 settlement reached with the parents of a 13-year-old San Diego girl, Christy Scheck, who killed herself at a National Medical psychiatric facility in Chula Vista.
