Tenet Healthcare Corp., Dallas, agreed to pay $215 million to settle shareholder and derivative lawsuits filed against the company after it disclosed in November 2002 its unusually high level of Medicare outlier payments. As part of the agreement, former Chief Executive Officer Jeffrey Barbakow and former Chief Operating Officer Thomas Mackey will pay $1 million and $500,000, respectively, of the settlement. Tenet said its directors and officers' insurance will cover about $75 million of the total, or about 35%. The accord covers two cases consolidating the various securities lawsuits against the company, one in U.S. District Court, Los Angeles, and the other in California Superior Court, Santa Barbara, where the company's headquarters was formerly located. The federal lawsuits alleged that Tenet executives misled investors with their statements regarding outlier receipts and other matters. The state lawsuits alleged breach of fiduciary duty, mismanagement, unjust enrichment and other causes of legal action. Tenet said the parties to the lawsuits expect that if the state court approves the settlement, the federal lawsuit will be dismissed. -- by Vince Galloro
Tenet agrees to pay $215 million in suits over outliers
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