While the HCA case is wrapping up, federal investigators are circling Tenet Healthcare Corp., Santa Barbara, Calif., like sharks that sense blood in the water.
Tenet announced that agents from the HHS' inspector general's office and the Internal Revenue Service raided 193-bed Alvarado Hospital Medical Center in San Diego, on Dec. 19. Contrary to some published reports, Tenet said, no FBI agents were part of the search team. The search warrants covered the offices of the hospital's chief executive officer and director of business development, Tenet said. Based on the search warrants, Tenet said, it appeared that the investigators were looking into physician recruitment, relocation and consulting issues. Tenet said it has no information that would suggest the investigation involves patient care or Medicare outlier payment issues.
Tenet also said last week that it remains deadlocked with the Justice Department on terms to resolve a payment dispute dating to the 1990s. In a letter to shareholders, Tenet Chairman and CEO Jeffrey Barbakow said that despite lengthy negotiations in recent days, the two parties "remain far apart on settlement issues" and that the hospital company is "prepared to try this case if necessary."
At issue are allegations that Tenet hospitals overcharged Medicare for inpatient stays related to four conditions-pneumonia, operating room procedures for infectious diseases, septicemia and respiratory system diagnosis with a mechanical ventilator-from September 1992 to December 1998. Tenet contends that it is not fully responsibly because during that period the hospitals were owned by various other companies, including American Medical International, National Medical Enterprises and OrNda HealthCorp.
Several years ago, the Justice Department launched an industrywide investigation into hospitals' coding for laboratory tests and inpatient stays. Tenet settled the laboratory issues in June for $17 million.
The FBI raided Tenet's 188-bed Redding (Calif.) Medical Center in October as part of an investigation of the Medicare billing practices of two physicians who practice at Redding (Nov. 4, p. 5).