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Tenet Healthcare Agrees to Settle Qui Tam Lawsuit

Tenet Healthcare Corporation and several of its affiliates have agreed to settle allegations by a whistleblower in a qui tam lawsuit that the entities violated the Stark Law, the Anti-kickback Statute, and the False Claims Act by engaging in improper financial relationships with certain physicians. According to the Settlement Agreement, the Defendants Tenet Healthcare Corporation, Tenet Healthsystem GB, Inc. Tenet South Fulton, Inc., Tenet Hialeah Healthsystem, Inc., Lifemark Hospitals of Florida, Inc., Tenet HealthSystem North Shore, Inc., Tenet Good Samaritan, Inc., Tenet St. Mary’s Inc., Brookwood Center Development Corporation, Eastern Professional Properties, Inc., AMISUB (SFH), Inc., Tenet Hospitals Limited, San Ramon Regional Medical Center, Inc. and Los Alamitos Medical Center (collectively “Tenet”) have agreed to pay $4,000,000 to settle the whistleblower’s allegations.  

The Settlement Agreement reflects that the whistleblower, Marc Osheroff, filed a lawsuit under the qui tam provisions of the federal False Claims Act, as well as the state False Claims Acts of Florida, California, Texas, and Tennessee in July 2009.  The United States, Florida, California, Texas, and Tennessee declined to intervene in the qui tam action.  The whistleblower chose to proceed with the case on his own.

The whistleblower alleged that Tenet engaged in improper financial relationships with numerous physicians in violation of the Stark Law and the Anti-kickback Statute.  Specifically, the whistleblower alleged that, between 2005 and 2013, Tenet entered into medical office building leases with the physicians at rates that were below fair market value.  Tenet then allegedly submitted false claims to Medicare for inpatient and outpatient services referred by those same physicians, in violation of the False Claims Act.

The Tenet hospitals identified in the Settlement Agreement include Atlanta Medical Center, South Fulton Medical Center, Hialeah Hospital, Palmetto General Hospital, North Shore Medical Center, Good Samaritan Medical Center, St. Mary’s Medical Center, Saint Francis Hospital, Doctors Hospital at White Rock Lake and San Ramon Regional Medical Center.

As his reward under the qui tam provisions of the False Claims Act the whistleblower will receive $1,000,000 of the settlement proceeds.  In addition, Tenet will pay an additional $1,000,000 for the whistleblower’s attorneys’ fees and costs.

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