Tenet Healthcare Corp. Agreed to Pay $5 Million to Settle Miami Whistleblower Lawsuit By Tod Aronovitz | 05/08/14 | 0 Comment

Tenet Healthcare Corp., owner and operator of Miami-Dade’s Coral Gables Hospital, Palmetto General Hospital, Hialeah Hospital and North Shore Medical Center, shelled out $5 million last December to settle a False Claims Act lawsuit that accused the company of paying kickbacks to doctors in return for patient referrals.  In total, Tenet runs 77 hospitals across 14 states.

Tenet, who admitted no wrongdoing in the Miami whistleblower lawsuit, paid $4 million to the federal government and $1 million for legal fees and other costs.  Broward resident Marc Osheroff, the whistleblower who filed the suit in July 2009, collected $1 million.

According to Osheroff, a South Florida entrepreneur and landlord, Tenet also allegedly allowed doctors to lease office space at below-market values.  The physicians who were tenants of the reduced-rate office space referred Medicare and Medicaid patients to Tenet-owned hospitals.  The company, in turn, submitted claims to Medicare and Medicaid based on those referrals.

The Miami whistleblower lawsuit revealed a significant chunk of Tenet’s patients are Medicare and Medicaid beneficiaries.  According to a Miami Herald article on April 30, 31 percent of Tenet’s hospital admissions are Medicare patients and 12 percent are Medicaid patients.  More than 27 percent of the $12 billion the company earned in 2013 stemmed from the government programs, according to published SEC filings. Tenet’s hospitals received net revenues of $2.3 billion from Medicare, and an additional $975 million from Medicaid.

Doctors who had leases with Tenet at buildings in Hialeah, Fort Lauderdale, and in California, Georgia, Texas and Tennessee, profited to the tune of tens of thousands of dollars over the life of the leases, the lawsuit claimed.  Not only did Tenet offer reduced-rate leases, but they also provided money for tenant improvements and under-stated the square footage of the offices. Tenet, consequently, earned more than $11,000 in net revenue for every patient admission, according to the suit.

Ultimately, this arrangement was in violation of the federal Stark Law, which prohibits hospitals from filing Medicare claims based on such referrals.

In a strange twist to this story, Tenet purchased a building co-owned by Osherhoff after the case was closed.  The medical office facility cost $48 million and is located next to Palmetto General. Osheroff operates several South Florida medical office buildings that compete with Tenet for physician-tenants.

The sale was fully disclosed to the U.S. Department of Justice, according to a spokesperson for Osheroff.

How to Report Miami Medicare Fraud

Healthcare professionals or medical billing employees who have knowledge of questionable Medicare billing practices can file a confidential legal claim under the False Claims Act. By acting as a “whistleblower” in what is known as a “qui tam” lawsuit, a private party may collect between 10 to 30 percent of the amount recovered, depending on how the case is prosecuted.

ARONOVITZ LAW: Miami Whistleblower / Qui Tam Law Firm

The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with whistleblowers to document Medicare fraud and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss your case.