Tenet Healthcare Corp., Santa Barbara, Calif., lost $195 million, or 42 cents per share, in the second quarter and said the loss resulted from reduced Medicare outlier revenue and several charges, including one encompassing a $54 million civil fraud settlement announced yesterday. By comparison, Tenet earned profits of $242 million, or 48 cents per share, in the year-ago quarter. Total revenue fell 1.5% to just under $3.4 billion for the quarter ended June 30. Outlier revenue was $16 million, compared with $223 million in the year-ago quarter, reflecting Tenet's Jan. 1 adoption of an outlier policy similar to regulations the CMS will implement tomorrow. For the six months ended June 30, Tenet lost $215 million, or 46 cents per share, compared with profits of $520 million, or $1.03 per share, in the year-ago period. Tenet saw a 0.4% increase in revenue to just over $6.8 billion for the six months.
In the second quarter, Tenet took an impairment charge of $198 million to reflect the lower value of some of its 114 hospitals given changes in Tenet's business. Other charges included $77 million for restructuring, covering severance costs for 1,100 employees let go since January, among other costs, and $68 million related to litigation and investigations, including the $54 million settlement announced yesterday. The settlement resolved issues regarding Tenet's role in the alleged performance of medically unnecessary procedures by two nonemployed physicians at Redding (Calif.) Medical Center. -- by Vince Galloro