Tenet Reveals Florida Medicaid Fraud Probe
Tenet Healthcare Corp., beset by several government probes, said Friday that another was underway in Florida, where authorities were investigating the hospital chain for possible Medicaid fraud.
The Florida attorney general’s office in June subpoenaed records dating to 1992 from the firm’s Florida hospitals, Tenet said in a regulatory filing. It said the subpoena sought loan, purchase and sales agreements and records relating to doctors, physician assistants and therapists.
The disclosure came at the end of a week in which Tenet reported a $195-million second-quarter loss -- its worst quarterly performance in six years -- and agreed to pay $54 million to settle allegations that doctors at its Redding Medical Center in Northern California performed unnecessary heart surgeries that were billed to the government.
Tenet owns 16 hospitals in Florida, its second-biggest market behind California. The Santa Barbara company said it was cooperating with the probe.
Since the fall, when federal investigators started investigating the company’s Medicare billing practices, Tenet’s stock has lost nearly 75% of its value. Medicare officials have accused the company of collecting inappropriately large amounts of so-called outlier reimbursements for the sickest patients. A Tenet hospital in San Diego and the hospital’s chief executive have been indicted for alleged violations of federal anti-kickback laws.
Financial analysts have complained that Tenet hasn’t revealed problems in a timely manner. Several said Friday that they felt misled by the company.
“The Medicaid situation might be peanuts,” said Sheryl Skolnick of Fulcrum Global Partners, “but these are necessary sorts of things for them to discuss on conference calls.”
On Thursday, Tenet executives didn’t mention the Florida probe during a conference call, when they discussed the company’s second-quarter loss. Analyst B. Kemp Dolliver of S.G. Cowen Securities Corp. said Tenet executives were “asked in the conference call if there was anything out there to worry about that they knew about and that we didn’t know about, and they said, ‘No.’ We have seen these situations handled better by other companies.”
Tenet spokesman Harry Anderson said that “not every single thing is necessarily discussed in a conference call.” The Securities and Exchange Commission filing was the most appropriate place to disclose the Florida investigation, he said.
Tenet shares fell 18 cents Friday to $14.39 on the New York Stock Exchange.
*
Bloomberg News was used in compiling this report.
