The U.S. Justice Department formally filed its complaint in a whistleblower case against Tenet Healthcare Corp. and its 391-bed North Ridge Medical Center in Fort Lauderdale, Fla., last week in U.S. District Court in Miami. The government joined the case in March.
The whistleblower, Sal Barbera, was chief executive officer of Tenet Physician Services before he was fired in 1996. He filed suit in 1997 alleging that North Ridge overpaid for physician practices to induce referrals and that the hospital filed false Medicare cost reports.
The complaint filed by the Justice Department under the False Claims Act alleges that North Ridge, Tenet and its predecessor company, American Medical International, violated the 1989 Physician Self-Referral Act beginning in 1993 by signing employment and medical-directorship contracts for greater than fair market value to induce Medicare referrals.
The act, better known as Stark I, bars physicians from referring patients to clinical laboratories in which they have ownership interests. It exempts hospital-employed physicians if their compensation is reasonable and not tied to patient volume.
Tenet has denied the allegations and said it intends to contest the case.