Tenet Healthcare Corp., Santa Barbara, Calif., said it will implement discounts for uninsured patients in light of HHS' recent guidance that Medicare rules and regulations do not prohibit such discounts. The discounting policy should be implemented in all Tenet hospitals by June 30, except in Texas, where state law does not permit such pricing, the company said. Discounts for the uninsured were part of a "Compact with Uninsured Patients" that Tenet announced in January 2003 after coming under heavy criticism from a Latino advocacy group, Consejo de Latinos Unidos, for its billing and collection practices. At the time, Tenet also was reeling from the after effects of the revelation of its unusually high Medicare outlier reimbursements. Tenet said other aspects of the compact were implemented when it was announced. Triad Hospitals, Plano, Texas, said last week that it also is moving forward with a discounting policy for the uninsured.
In other news, Moody's Investors Service downgraded three Tenet debt ratings, two to B1 and the third to Caa3. Moody's cited Tenet's expected cash flow problems, a $148 million judgment in a breach-of-contract case with former executive John Bedrosian and the likelihood that banks will reduce the amount of credit available to the company. Tenet owns or operates 100 hospitals but is divesting 31. -- by Vince Galloro