Tenet Proposes $66M Settlement in Oklahoma Whistleblower Case

Tenet Healthcare Corp. has agreed in principle to pay the federal government about $66 million to settle a whistleblower lawsuit alleging it billed public programs for services provided by physicians who had improper financial relationships with an Oklahoma hospital partly owned by Tenet.

The qui tam lawsuit, filed in 2016 and unsealed last year, alleges violations of the False Claims Act, the Anti-Kickback Statute, the Stark law and the Oklahoma False Claims Act.

Tenet disclosed the tentative settlement in its recent quarterly filing with the Securities and Exchange Commission. It said it had established a reserve of $68 million for the matter. It anticipated the agreement could be completed as early as the first quarter of 2020.

The company said it is involved in “continuing efforts to come to a final resolution,” which would remain subject to negotiation and approval by the Justice Department and the HHS Office of the Inspector General.

The lawsuit, originally filed in federal court in Oklahoma in May 2016, alleged unlawful conduct by and a conspiracy among a group of Oklahoma orthopedic surgeons, the surgical hospital they created—the Oklahoma Center for Orthopaedic and Multispecialty Surgery in Oklahoma City—and USPI, a Tenet-owned unit that owns a stake in the hospital along with a healthcare system and physicians.

Clinic administrator Wayne Allison claimed the defendants engaged in kickbacks, unlawful compensation and unearned reimbursements.

Tenet said it learned the health system was a defendant in the suit when the court unsealed the complaint in May 2018 and the Justice Department declined to intervene. Tenet asked a judge to dismiss the case in October 2018 but the court has not yet ruled on those motions.

The company said the case is stayed until next month while the parties work to finalize the settlement.

In 2016, Tenet agreed to pay $514 million to settle a whistleblower case claiming two of its former subsidiaries defrauded Medicaid by using referral contracts for translation services to draw pregnant patients to two hospitals in Georgia.


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