Tenet Gets Subpoena for Medicare Documents

Tenet Healthcare Corp., the nation’s second-largest for-profit hospital chain, said late Thursday that it received a subpoena from the Justice Department demanding information on certain Medicare payments.

The Santa Barbara-based company, which previously disclosed that it is being audited by the agency that runs the Medicare program, said the subpoena calls for documents from Tenet and 19 of its hospitals, 15 of them in California. The company runs 114 hospitals nationwide.

Justice Department officials in Los Angeles are focusing on payments made from Jan. 1, 1997, to the present.

Tenet has been under scrutiny since late October when questions were first raised about the high volume of its Medicare “outlier” payments, which are special reimbursements to help hospitals defray the cost of unusually expensive cases.

Tenet has said that it boosted outlier payments by aggressively raising its retail charges at some hospitals -- a policy that the company has since stopped.

“Given the scrutiny and controversy regarding outlier payments, it is not surprising that the Justice Department is interested in reviewing the matter,” said Christi R. Sulzbach, Tenet’s general counsel.

Tenet Healthcare has maintained that it did not break the law regarding the Medicare outlier payments.

Shares of Tenet rose 57 cents to $16.97 in New York Stock Exchange trading.

The stock has declined 57% in the last year, as the company has come under intense scrutiny, including an FBI probe of two doctors at a Tenet hospital in Redding, Calif., who allegedly performed unnecessary heart operations.