Posted on Mon, Jan. 06, 2003
Tenet adopts new Medicare payment guidelinesGARY GENTILE
Associated PressLOS ANGELES - Tenet Healthcare Corp., facing a federal inquiry into its Medicare billing practices, said Monday it will voluntarily adopt new guidelines for determining supplemental Medicare payments.
The new procedures are expected to reduce Tenet's reliance on the so-called "outlier" payments from $65 million per month to $8 million per month, the company said in a statement.
Outlier payments are supplemental Medicare reimbursements for the sickest patients.
Tenet is being audited by federal authorities over its aggressive pricing, which has led to above-average outlier payments.
The new policy mirrors changes the Centers for Medicare and Medicaid Services are expected to make nationwide later this year. The center has become concerned in recent years over how the outlier program has been used and announced last year it would examine the program independent of its probe into Tenet.
A key part of Tenet's announced plan is actually out of its control and must be negotiated with private insurance companies that administer Medicare reimbursement for the government.
That aspect is the "statewide average" method of calculating outlier payments.
Tenet has said the reason it received such large payments over the past two years was a technical fluke. The regulations automatically apply a statewide average for payments when a hospital's ratio of costs to charges falls below that average.
Tenet's ratio fell below the average because of its aggressive policy of raising charges, the company has said.
The company said that if CMS adopts different standards, Tenet would apply it retroactively to Jan 1.
Tenet is the second-largest hospital chain in the nation, operating 114 hospitals.