Tenet Arrives at Settlement on Fla. and Transfer Discharge Inquiries

March 25, 2004

Tenet Healthcare Corporation announced that Tenet and certain of its subsidiaries signed a definitive settlement agreement with the U.S. Department of Justice and other parties that ends an investigation of certain physician employment matters at one Tenet hospital in Florida as well as a federal transfer-discharge inquiry that involved substantially all Tenet hospitals. The settlement agreement includes a total payment by Tenet of $30.75 million.

“The resolution of these two matters is an important step forward as Tenet works to rebuild its business and its reputation,” said Peter Urbanowicz, Tenet’s general counsel. “Our resolution of this case should serve as a clear demonstration of our desire to establish a more cooperative and collaborative tone with our federal health program partners.”

The Florida investigation, which Tenet has previously disclosed, involved certain physician employment contracts, practice acquisitions and coding practices at North Ridge Medical Center in Ft. Lauderdale. It arose from a qui tam lawsuit filed seven years ago by a former employee. The settling parties, in addition to the Department of Justice, include the Office of the Inspector General in the U.S. Department of Health and Human Services and the plaintiff in the whistleblower lawsuit.

In addition to Tenet’s payment of $22.5 million to resolve this matter, the settlement includes a corporate integrity agreement for North Ridge Medical Center to ensure compliance with applicable health care laws and regulations.

In the transfer-discharge case, the settlement resolves all civil claims against substantially all Tenet hospitals with respect to the payment of claims submitted to Medicare for transfers of Medicare patients.

The Department of Justice had been investigating certain hospital billings to Medicare for inpatient stays reimbursed under the diagnosis-related group system from Jan. 1, 1992 to Dec. 31, 2000. Under the settlement, a payment of $8.25 million will be made to resolve this matter.

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