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Tenet Receives Another Subpoena

The Justice Department wants billing records from a Tarzana facility and a USC hospital.

October 18, 2003|Jonathan Peterson | Times Staff Writer

WASHINGTON — The Justice Department has issued a second subpoena to Tenet Healthcare Corp. as part of the government's investigation into some of Tenet's billing practices in the Medicare program, the company said Friday.

The subpoena, issued by the U.S. attorney in Los Angeles, seeks medical and billing records dating to 1998 from two Tenet-owned hospitals, Tarzana Regional Medical Center and USC University Hospital. It also seeks information about certain managers at those hospitals and data on the hospitals' charges during the last five years.

"We will continue to cooperate with the Department of Justice regarding this matter," said Gary Hopkins, a spokesman for the Santa Barbara-based company, which owns 112 hospitals.

The U.S. attorney's office in Los Angeles declined to comment.

In August, Tenet agreed to pay $54 million to settle government allegations that two doctors at its Redding Medical Center in Redding conducted unnecessary heart procedures on hundreds of patients.

The latest subpoena is related to the Justice Department's investigation into whether Tenet engaged in improper billing to collect inappropriately large amounts of so-called outlier Medicare reimbursements for the sickest patients. In January, Tenet voluntarily cut back on the amount it charges Medicare, and that has hurt the company's earnings.

Tenet, the nation's second-largest hospital chain, is the subject of numerous other state and federal inquiries, which has led to an overhaul of the company's top management. Tenet's shares closed Friday at $15.75, down 9 cents, on the New York Stock Exchange.

Last month, the Senate Finance Committee issued a sweeping request for Tenet documents, including e-mails and other communications, related to allegations of unnecessary heart procedures and improper Medicare billings. The panel may decide to hold hearings after its investigation has progressed further.

"In the annals of corporate fraud, Tenet ... more than holds its own among the worst corporate wrongdoers," Sen. Charles E. Grassley (R-Iowa), chairman of the Senate Finance Committee, wrote to Tenet Chief Executive Trevor Fetter in September.

The inspector general's office at the Department of Health and Human Services also has been looking into Tenet's Medicare billing strategies and allegations of unnecessary heart procedures. The inspector general last month moved toward excluding Redding Medical Center from federal health-care programs, including Medicare and Medicaid.

Some critics of Tenet's billing practices maintain that inappropriately high pricing by corporate hospital firms, not limited to Tenet, has emerged as an important reason behind rising health-care costs faced by businesses and the general public.

"Part of the untold story is the role of hospital chains who have been aggressively driving up health-care costs through aggressive pricing strategies," said Charles Idelson, spokesman for the California Nurses Assn. "We believe this is a systemic pattern, not just in Tenet but in the corporate hospital industry in general."

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