Tenet Healthcare Corp.'s strategy of rapidly raising its gross charges has brought more trouble for the Santa Barbara, Calif.-based company -- this time a lawsuit in South Carolina. A class-action lawsuit on behalf of patients was filed yesterday against Tenet's 276-bed Piedmont Healthcare System, Rock Hill, S.C., in York County Court of Common Pleas. The hospital was owned by York County until it was sold in 1980 to American Medical International, Dallas, which was purchased by Tenet in 1995. The lawsuit quotes a 1996 amendment to the sales agreement that requires Piedmont to price its services "at reasonable competitive levels" compared with nine other hospitals in the region. The lawsuit contends that as of Jan. 1, 1997, Piedmont's prices were the highest among the hospitals and that Piedmont failed to notify York County of the fact. The plaintiffs seek monetary damages for all amounts charged above the level at the hospital with the second-highest charges, plus interest. They also asked the court to prohibit Piedmont from charging such high prices in the future.
A Piedmont spokeswoman did not return a telephone call. Meanwhile, Tenet has no comment on the lawsuit, spokesman Steven Campanini said. He added that Piedmont agreed with York County officials to freeze the hospital's gross charges for the past two years to ensure compliance with the contract. Hospital officials are continuing to work with the county to clear up what Tenet sees as largely an accounting matter, Campanini said. Tenet has pointed to its rapidly increasing gross charges as the main factor behind its much higher-than-normal Medicare outlier reimbursements, which helped trigger a new federal policy on outlier payments. -- by Vince Galloro