June 29, 2006: Tenet Healthcare Reaches Settlement with Justice Department over Allegations of Defrauding Medicare

Tenet Healthcare Corp., the country’s second largest hospital chain, agrees to a $900 million settlement with the Justice Department over allegations that it defrauded Medicare. In 2003, the company was charged with violating the False Claims Act. The government alleged that Tenet had billed for services not rendered, inflated reimbursable costs, and paid kickbacks to doctors for referrals. The company, which admits no guilt—only that it made billing “mistakes”—will pay $725 million over a four-year period to resolve the billing dispute and will forfeit its right to collect $175 million in Medicare payments for past services. Wall Street analysts had expected the amount to be well over a billion. [Reuters, 6/29/2006; US Department of Justice, 6/29/2006; Tenet Healthcare Corp., 6/29/2006 ]