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Former Tenet Healthcare Corporation Exec Charged for Allegedly Attempting to Defraud the Government of $400 Million

The government, in its pursuit of fraudulent activities committed by private institutions, often encounters executives who are alleged to have violated not just the False Claims Act but also other laws as well. This was shown to be the case when last week the Department announced that a former senior executive of Tenet Healthcare Corporation had been indicted for his alleged role in scheming to defraud the government of $400 million. The Department alleges that the scheme targeted not only the U.S. government but the Georgia and South Carolina Medicaid Programs and prospective patients of Tenet hospitals. The executive – John Holland – was charged in an indictment filed on January 24, 2017 with one count of mail fraud, one count of health care fraud and two counts of major fraud against the United States. His initial appearance on the charges was on Feb 1 before a judge in the Southern District of Florida.

The indictment alleges that from 2000 through 2013, Holland engaged in a plan to defraud the US government and the Georgia and South Carolina Medicaid Programs by causing the payment of bribes and kickbacks to be made in exchange for patient referrals to several Tenet owned facilities. From approximately 2007 through 2013, Tenet maintained billing several centers located in Boca Raton, Florida. These centers processed Medicaid billings for Tenet hospitals. Holland – it is alleged – attempted to conceal the scheme by circumventing internal account controls and by falsifying Tenet’s books, records and reports. As a result of his scheme, Tenet was able to bill Georgia and South Carolina Medicaid Programs over $400 million. Moreover, the indictment alleges that Tenet obtained more than $149 million in Medicare funds based on the patient referrals that came about as a result of kickbacks and bribes.

The indictment also alleges that Holland made false statements to the HHS-OIG in connection with a 2006 Corporate Integrity Agreement (CIA) that Tenet entered into in 2006. The government says that Holland falsely stated that they were in compliance with the CIA when in fact he knew that Tenet was paying for illegal patient referrals. Finally, the indictment alleges that from 2007 through 2011, Tenet received over $10 billion in payment from federal health care programs. These monies would not have been received by Tenet had they been excluded from participation in federal health care programs. “Medicaid patients have the right to seek healthcare without fearing that care is tainted by bribes and illegal kickbacks,” said Special Agent in Charge for FBI’s Atlanta Division LeValley. “Not only did patients suffer because of these alleged actions, but this kind of alleged abuse threatens to drive up the cost of healthcare for everyone.  The FBI is committed to ensuring that federal laws related to the healthcare industry are enforced, and this case is an example of that commitment.”

 

In late 2016, North Fulton Medical Center Inc. and Atlanta Medical Center Inc. both pleaded guilty to conspiring to defraud the United States in violation of the Anti-Kickback Statute. Tenet and its subsidiary Tenet HealthSystem Medical Inc (THSM) entered into a non-prosecution agreement (NPA) with the government at that time. Under the terms of the agreement, THSM and Tenet will avoid prosecution if they cooperate with the government’s investigation and enhance their compliance with an ethics program and certain internal controls. Tenet agreed to have an independent compliance monitor address and to reduce any reoccurrence of the incidences that are alleged to have occurred in the indictment. Tenet has also agreed to pay over $513 million to resolve the criminal charges and civil claims arising from the matter

Since its inception in March 2007, the Medicare Fraud Strike Force now operates in nine locations across the country. The Strike Force has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. If you know of abuse that has been committed against the government or one of its agencies you are encouraged to report it and to contact a False Claims Act lawyer. A False Claims Act attorney can advise you in such matters and will work to protect your rights under the law.