Tenet Healthcare Corp., Santa Barbara, Calif., is under fire again for high charges. A new report prepared for the California Public Employees Retirement System said Tenet hospitals charged CalPERS beneficiaries 32% more per discharge than other large hospital systems in California and 46% more than the statewide average. The study covered the first 10 months of 2002. The report was prepared by Blue Cross of California, CalPERS' third-party administrator, in preparation for a hearing tomorrow on hospital pricing by a committee of the state Assembly. The report also noted that Tenet's 188-bed Redding (Calif.) Medical Center and 392-bed Doctors Medical Center in Modesto, Calif., had high stop-loss rates -- 23% and 26%, respectively, compared with the 3% average among Blue Cross network hospitals. Stop-loss payments, like Medicare outlier payments, compensate hospitals for unusually expensive cases.
HHS' inspector general's office is auditing Tenet's outlier payments, and federal authorities are investigating whether two Redding physicians performed unnecessary heart procedures. Tenet spokesman Steven Campanini said Tenet is reviewing the CalPERS report. The company also is reviewing its pricing structure, Campanini said. Managed-care plans have their "eyes wide open" in pursuing stop-loss provisions with Tenet and other providers, he said. Tenet will put all reports about the company's pricing practices into perspective at the committee hearing, Campanini said. -- by Vince Galloro