The hospital chain operator Tenet Healthcare has dished out hundreds of millions of dollars to settle investigations and litigation related to allegations that it manipulated the Medicare billing system before 2003. Among the recipients of these payments have been the Department of Justice, the Securities and Exchange Commission and Tenet shareholders. But one group of plaintiffs that have not received any money is a collection of several thousand competing hospitals. And after the 11th Circuit’s decision on Sept. 4 (pdf) that affirmed a summary judgment in favor of Tenet, it looks more doubtful that they will ever get any money.
The litigation was over so-called outlier payments to hospitals, which Medicare sets aside for extraordinarily costly care. Five years ago, Boca Raton Community Hospital, represented by Greenberg Traurig, filed a class action under RICO and California’s unfair competition law alleging that Tenet was getting more than its fair share of outlier payments and essentially stealing from other hospitals by manipulating the Medicare billing process. Boca was seeking treble damages of nearly $2 billion for the class of more than 3,500 hospitals nationwide.
