Tenet Joint Venture Probed

From Bloomberg News

Tenet Healthcare Corp., the U.S. hospital owner under investigation by at least three government agencies, said Monday that a company that provides services to one of its units received a subpoena from federal prosecutors in New Orleans.

The subpoena doesn’t say what the investigation is about, Santa Barbara-based Tenet said in a statement.

Tenet controls half of the company, called People’s Health Network. The company does billing, claims processing and other management for Tenet Choices Inc., a unit that runs a Medicare health plan in New Orleans.

“Let me be clear: There’s nothing in the subpoena related to Tenet Healthcare Corp. or to Tenet hospitals,” Tenet spokesman Harry Anderson said.


The probe could complicate legal problems faced by Tenet, which disclosed in November that it raised prices to trigger higher payments for some Medicare patients. U.S. prosecutors are investigating whether Tenet’s billing and physician recruiting violated the law, and a company hospital in California may be banned from the Medicare program.

Tenet said prosecutors wanted documents from January 1999 to the present related to several physician practices that shared control of People’s Health, as well as policy manuals and other records.

James Letten, U.S. attorney in New Orleans, declined to comment.

Shares of Tenet rose 25 cents to $15.21 on the New York Stock Exchange. The announcement was made after the markets closed.


Tenet agreed in August to pay $54 million to settle government allegations that two doctors at its Redding, Calif., hospital billed Medicare for unnecessary heart procedures. Last month, a second executive at a Tenet hospital in San Diego was indicted on charges of offering kickbacks to physicians to get Medicare referrals.

Former Chief Executive Jeffrey Barbakow quit in May under pressure from investors after forcing out his chief financial officer and chief operating officer. Last month, Trevor Fetter was named Barbakow’s permanent replacement.