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Billing Companies Being Held Accountable for Facilitating Their Clients’ Fraud

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at February 2, 2017

We had previously reported that, on Oct. 19, 2016, North Fulton Medical Center Inc. and Atlanta Medical Center Inc. pleaded guilty to conspiring to defraud the United States and to violate the Anti-Kickback Statute.  Tenet subsidiary Tenet HealthSystem Medical Inc. and its subsidiaries (THSM) also entered into a non-prosecution agreement (NPA) with the government at that time.  Under the terms of the NPA, THSM and Tenet will avoid prosecution if they, among other requirements, cooperate with the government’s ongoing investigation and enhance their compliance and ethics program and internal controls.  Tenet also agreed to retain an independent compliance monitor to address and reduce the risk of any recurrence of violations of the AKS by any entity owned in whole, or in part, by Tenet.  Tenet and its subsidiaries also agreed to pay over $513 million to resolve the criminal charges and civil claims arising from the matter.

However, corporations can’t go to jail. Only people can.

According to a press release issued by the Department of Justice yesterday, John Holland, a former executive for Tenet Healthcare Corp., is now personally facing numerous criminal charges for orchestrating the health care fraud scheme that may have cost the federal government hundreds of millions of dollars. Holland, 60, of Dallas, was charged in an indictment filed on Jan. 24 in the Southern District of Florida with one count of mail fraud, one count of health care fraud and two counts of major fraud against the United States.

According to the indictment, Holland formerly served as a senior vice president of operations for Tenet Healthcare Corporation’s Southern States Region and as chief executive officer of North Fulton Medical Center Inc. in Roswell, Georgia.  The indictment alleges that from approximately 2000 through 2013, Holland engaged in a scheme to defraud the United States, and the Georgia and South Carolina Medicaid Programs, by causing the payment of bribes and kickbacks in return for the referral of patients to North Fulton Medical Center Inc. and other Tenet hospitals in the Southern States Region, including Atlanta Medical Center Inc., Spalding Regional Medical Center Inc. and Hilton Head Hospital.  From approximately 2007 through 2013, Tenet maintained and operated an affiliated billing center located in Boca Raton, Florida, that assisted in processing, for payment, Medicaid billings for these hospitals.  Holland took affirmative steps to conceal the scheme including by circumventing internal accounting controls and falsifying Tenet’s books, records and reports.  These kickbacks and bribes helped Tenet bill the Georgia and South Carolina Medicaid Programs over $400 million, and Tenet obtained more than $149 million in Medicaid and Medicare funds based on the resulting patient referrals, the indictment alleges.

According to the allegations, to effectuate the scheme, Holland, among other things, made false and fraudulent statements to HHS-OIG in connection with Tenet’s 2006 Corporate Integrity Agreement (the CIA), in which he falsely certified to HHS-OIG that Tenet was in compliance with the terms of participation in the Medicare and Medicaid Programs, and the terms of the CIA, when in fact he knew that Tenet was paying for illegal patient referrals.  Holland’s certifications were included as part of Tenet’s yearly annual reports that were mailed to the HHS-OIG monitor located in Miami Lakes, Florida.  During the duration of the CIA from 2007 through 2011, Tenet received over $10 billion in payments from federal health care programs – monies that Tenet would not have received had the company been excluded from participation in federal health care programs, the indictment alleges.

“Health care companies and their executives must bill taxpayer-funded health programs honestly,” Special Agent in Charge Jackson of the HHS Office of Inspector General.  “Working with our law enforcement partners, our office will continue to pursue those who attempt to defraud Medicare and Medicaid, as alleged in this indictment.”

EDITOR’S NOTE: So, it’s clearly unacceptable to steal from taxpayer-funded health programs.  But so long as we are going to base our healthcare systems, including behavioral healthcare, upon a private pay system, should law enforcement be less interested if it undermines and compromises the ENTIRE economic model that ensures our collective health? Maybe instead of “repeal and replace,” our law making representatives in that cesspool known as Washington, D.C., should broaden healthcare fraud enforcement across the board, rather than place an unfunded mandate upon local law enforcement agencies.

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