Sunday, April 24, 2011

Tenet CHS Fight Turns to Hair Pulling

Community Health Systems (CHS) made an unsolicited offer to buy Tenet Healthcare.  The gloves came off almost immediately.  After several months in the acquisition cage, both fighters are bloody, beaten and tired.  With no access to a barber, their locks are now long.  Tenet grabbed a big chunk of Community's teal green hair and yanked with its latest accusation (Courthouse News):

Tenet says CHS increased the revenue of Triad, a hospital operator it acquired in 2007, through "CHS's systematic reduction in the observation rate at the former Triad hospitals - a stunning 52 percent drop in one year following the acquisition."

Tenet says CHS uses "liberal" criteria to decide whether to admit patients or treat them as outpatients, at a lower cost, and claims that "CHS artificially increases inpatient admissions for the purpose of receiving substantially higher and unwarranted payments from Medicare and other sources.

CHS has reaped enormous sums through its admissions practices. Avalere, a leading healthcare advisory firm, estimates that, between 2006 and 2009, CHS received approximately $280 million to $377 million from treating inpatient admitted Medicare patients in CHS hospitals" who could have been treated in observation, the complaint states.

Tenet says Medicare pays as much as $7,000 more per hospitalized patient than it would for outpatient services for the same patient.

Tenet adds that by improperly billing Medicare, CHS has violated the False Claims Act, and may be liable for more than $1 billion in penalties.
It takes one to know one.  Tenet settled with Medicare for unlawful billing practices at a cost of $900 million.  The Justice Department news release stated "the agreement requires Tenet to pay:"
-- more than $788 million to resolve claims arising from Tenet’s receipt of excessive “outlier” payments (payments that are intended to be limited to situations involving extraordinarily costly episodes of care) resulting from the hospitals’ inflating their charges substantially in excess of any increase in the costs associated with patient care and billing for services and supplies not provided to patients;

-- more than $47 million to resolve claims that Tenet paid kickbacks to physicians to get Medicare patients referred to its facilities, and that Tenet billed Medicare for services that were ordered or referred by physicians with whom Tenet had an improper financial relationship; and,

-- more than $46 million to resolve claims that Tenet engaged in “upcoding,” which refers to situations where diagnosis codes that Tenet is unable to support or that were otherwise improper were assigned to patient records in order to increase reimbursement to Tenet hospitals.
Tenet paid a $54 million fine for performing unnecessary cardiac procedures at their Redding, CA facility. In addition they set up a $395 million fund to compensate over 700 victims.

Tenet also settled with the state of Florida for $7 million regarding unethical billing practices under Medicare & Medicaid.  Ex-Florida Governor, John Ellis (Jeb) Bush, landed a spot on Tenet's board in April 2007, after W.'s Justice Department reached the $900 million Medicare settlement.  Tenet lobbied the White House in early 2006.  They addressed two issues, corporate governance and the federal response to Hurricane Katrina where Memorial Medical Center, a Tenet owned facility, lost 35 patients.

Tenet has no credibility on the ethics front.  Pot meet kettle.