Department of Justice Seal Department of Justice
(202) 514-2007
TDD (202) 514-1888


WASHINGTON, D.C.- Tenet Healthcare Corporation subsidiary Lifemark Hospitals of Florida has paid the United States $29 million to settle allegations that Lifemark, Tenet and various affiliated and predecessor companies violated the False Claims Act in connection with false claims submitted to the Medicare Program, the Justice Department announced today. Lifemark, which does business as Palmetto General Hospital in Hialeah, Fla., was acquired by Tenet in March of 1995.

The settlement agreement resolves allegations by the United States that the hospital's submissions to Medicare from 1994 to 1997 included false claims for home health services purportedly provided by three agencies in Dade, Islamorada and Key West, Florida. The government contended that these submissions included claims that contained or were based on false, fraudulent and misleading statements or omissions regarding the patient's medical condition, history and/or eligibility for coverage by Medicare. In addition, the United States asserted that the hospital's submissions included claims for services that were not reimbursable by Medicare because they were not rendered; were provided by unskilled, unlicensed or uncertified personnel; were based upon insufficient, forged or missing documents; and/or were never ordered by a physician.

The government further contended that certain cost reports Palmetto submitted between 1994 and 1997 improperly maximized its Medicare reimbursements through various means, including the reclassification of the costs of one of the home health agencies to the other two and the misallocation of certain capital related, operating, nursing administration, cafeteria and social service costs. Additionally, the United States contended that the hospital improperly claimed non-reimbursable billing fees paid to a related company; and also failed to disclose the related-party nature of that relationship. Lastly, the United States contended that the hospital improperly classified certain non-reimbursable acquisition costs as reimbursable consulting fees.

The civil settlement includes a full resolution of claims brought against Tenet and one of its home health agencies by a former employee of the defendants, Isabel Ayers, under the qui tam or whistleblower provisions of the False Claims Act. Ms. Ayers filed her suit in the U.S. District Court for the Southern District of Florida in August of 1997. As a result of today's settlement, she will receive approximately $4 million of the total recovery as her statutory award, and her suit will be dismissed. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government reaches a monetary agreement with the defendants.

The case was investigated by the United States Department of Health and Human Services, Office of Inspector General, and the Federal Bureau of Investigation, and was handled by the United States Attorney's Office for the Southern District of Florida and the Civil Division of the Department of Justice.