A federal judge in Florida put an end to a lawsuit alleging Tenet Healthcare Corp. deprived thousands of hospitals of their fair share of Medicare outlier payments through a scheme to boost its own take by more than $1 billion.
The ruling follows a June decision in New Jersey rejecting a nearly identical racketeering claim against St. Barnabas Health System. Both lawsuits sought class-action status.
In the complaints, the plaintiffs argued that Dallas-based Tenet and St. Barnabas, a seven-hospital system based in West Orange, N.J., raised their charges in conspiracies to yield better returns from the outlier program, which is supposed to help hospitals cover the cost of unusually expensive cases.
The CMS, they argued, attempted to hold the pool of outlier payments to a fixed percentage of each years total DRG payments, so when Tenet and St. Barnabas allegedly took more than they deserved, everyone else got less.
Tenets conduct is too remote and attenuated from Bocas alleged injury, Judge Patricia Seitz wrote in a 29-page opinion, referring to 380-bed Boca Raton (Fla.) Community Hospital, which was the plaintiff.
Both Tenet and St. Barnabas, without conceding that they had done anything illegal, settled with the Justice Department with Tenet agreeing to pay $788 million and St. Barnabas paying $265 million. Tenet also agreed to a $7 million settlement with Floridas attorney general, who made a similar racketeering claim on behalf of 13 public hospitals.
Hal Hirsch, a lawyer with Greenberg Traurig in New York who is leading both class-action lawsuits, has appealed the New Jersey defeat and says he will do the same in Florida. -- by Gregg Blesch
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