Tenet Health Care
Pays $22.5 Million
The Tenet Healthcare hospital chain has settled a False Claims Act case for $22.5 million, and agreed to pay an additional $8.25 million to settle charges that it submitted bills to get inflated payments for Medicare patients.

This settlement is the largest False Claims Act recovery obtained from a single hospital for violations of the Stark Statute which prohibits hospitals from billing Medicare for services rendered to patients by doctors with whom the hospital has a financial relationship. The government alleged that the North Ridge Medical Center in Ft. Lauderdale, Florida , owned by Tenet, had entered into a number of prohibited financial relationships with North Ridge physicians in 1993 and 1994 and had billed Medicare for referrals from these doctors through the late 1990's. The government also alleged that these Stark Statute violations gave rise to the defendants' violations of the False Claims Act.

Tenet has been nailed for False Claims violations in the past, and the hospital chain still faces a government investigation over Medicare billing for very sick patients, as well as two lawsuits accusing two doctors at a Tenet hospital in California of performing unnecessary surgeries. Andrew Heyward, a securities analyst at Ragen Mackenzie, says he expects "many settlements" to come.

In January, Tenet announced that it would sell 27 hospitals in order to become a smaller but leaner company. The American Medical News reports that of April 2004 Tenet was $4 billion in debt, with a dwindling cash position and massive potential legal liability from government investigations and lawsuits.