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UNITED STATES INTERVENES IN CASE AGAINST TENET HEALTHCARE

WASHINGTON, D.C. -- The Justice Department announced today that it has intervened in Miami, Florida in a lawsuit filed against Tenet Healthcare Corporation under the False Claims Act for paying above fair market value compensation to certain physicians, employed by the company's North Ridge Medical Center, allegedly in order to induce referrals to the hospital.

A suit, filed against the company by a former employee, contends that beginning in 1993, the Ft. Lauderdale, Florida, medical center violated the False Claims Act and the Stark physician self-referral statute. That statute, named after Congressman Pete Stark, prohibits a physician from referring Medicare patients for certain services, including clinical laboratory, inpatient and outpatient hospital services, to an entity with which the doctor has a financial relationship.

According to the statute, a physician, employed by a hospital, is exempt from this prohibition as long as the doctor's compensation is for fair market value and does not take into account the volume or value of any referrals by the employed physician. Under provisions of the statute, the Medicare program should recover all of the revenues received by North Ridge by virtue of referrals from physicians paid in excess of fair market value.

The United States declined to intervene in the complaint's allegations that physicians employed by North Ridge Medical Center upcoded claims for reimbursement from federal health care programs. Upcoding is billing for a more highly reimbursed service or product than the one provided. However, the Department does intend to pursue additional allegations against Tenet involving false cost report claims at North Ridge.

Under the False Claims Act, those who file false claims against the federal government are subject to three times the damages caused and penalties of $5,000-$10,000 per violation.

North Ridge Medical Center, formerly part of the American Medical International (AMI) chain, was included in the merger of AMI and National Medical Enterprises, Inc. in March 1995, which resulted in the Tenet hospital chain.

The case is entitled United States ex rel. Barbera v. Tenet Healthcare Corp., f/k/a Nat'l Medical Enterprises and Am. Medical Int'l, No. 97-6590 (S.D. Fla.)

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