Within one month, a local health care agency has faced an audit by the Dept. of Health and Human Services, the resignation of two top executives and a federal investigation at one of its hospitals where doctors may have performed numerous unnecessary heart surgeries aimed at defrauding the Medicare system.
Tenet Healthcare Corp., based out of Santa Barbara, received a notice of audit on Nov. 5, due to the unusually high number of outlier payments the company’s hospitals requested.
“An outlier [payment] is given when [the hospital] performs a surgery more complex than the guidelines set out by Medicare. [The hospital] files with the government, and they decide whether or not [to give the] outlier payment,” said Greg Harrison, Tenet’s director of corporate communications.
Since Tenet hospitals have made a higher than normal amount of these outlier payments, the Office of Inspector General at the Dept. of Health and Human Services issued a notice of audit.
“[The auditors will be] looking at outlier payments to see if they were done properly with regard to Medicare policy,” said Katherine Harris, a spokeswoman for the Office of Inspector General.
Tenet is still unaware of which hospitals will be involved and when the audit will take place, and an audit of this sort may take months to complete, Harrison said.
Tenet Healthcare announced the departure of two of its top executives after they were informed they would be audited. David L. Dennis, Tenet’s vice chairman and chief financial officer, resigned, and Thomas Mackey, Tenet’s chief operating officer, retired.
“The reason they resigned was a matter of failure of management communication. [Dennis and Mackey] were responsible for financial operations and strategy at Tenet, and the CEO discovered the extent to which they were pursuing this aggressive pricing strategy. He had not been properly informed and no longer trusted them,” Harris said.
Government officials have also investigated two doctors working at the Tenet-owned Redding Medical Center who have been accused of allegedly performing a number of unnecessary heart surgeries.
Agents from both the FBI and the Dept. of Health and Human Services raided the facility and the offices of Drs. Chae Hyun Moon and Fidel Realyvasquez, Jr. on Oct. 30. Steven Campanini, spokesman for Tenet, said the investigation concerns the doctors and not Tenet.
“The doctors are not employees of [Redding Medical Center]. They are independent practitioners and bill for their own services,” Campanini said.
Campanini said the allegations against the doctors have not been proven, and that actions to stop the doctors from practicing have failed.
“The temporary restraining order to prevent [the doctors] from practicing was denied, and the supporting FBI affidavit that was used to support the temporary restraining order was ruled inadmissible,” Campanini said.
Harrison said the audit is in no way related to the investigation of these doctors, and that Tenet is taking the proper precautions to make sure that the doctor’s performances will be closely monitored during the investigation. In addition to the existing peer review and quality assurance programs, Harrison said the hospital has begun a concurrent review of the two doctors.
“[The hospital] started a review of any case the two doctors were considering doing. Highly trained professionals are brought in to review each case … to make sure heart procedures are necessary,” Harrison said.
Tenet is confident that the results of the audit will show that they have complied with Medicare’s rules.
“We see [the audit] as an opportunity to demonstrate that our hospitals comply with government programs,” Harris said.