Birmingham Business Journal
14:42 EST Monday, Jan 6, 2003
Tenet makes Medicare policy change

Tenet Healthcare Corp., parent company of Brookwood Medical Center, has adopted a new Medicare billing policy in the face of a government probe.

The policy would, according to Tenet's Web site, reimburse hospitals in accordance with pending government changes. Tenet president Trevor Fetter says the policy would ensure that cost-to-cost outlier payment charges would be based on the most recent reports available and that the use of "statewide averaging" would be eliminated.

Tenet says monthly reimbursements could drop to $8 million per month from $65 million, citing its 2003 and 2004 forecasts. The policy change was included in a letter by Fetter to Tom Scully, the administrator of the Centers for Medicare and Medicaid Services (CMS).

CMS is probing Tenet's billing to Medicare, specifically allegations of overcharging. On Jan. 2, the U.S. Department of Justice subpoenaed Tenet for Medicare-related documents involving 19 of its subsidiary hospitals in California, Pennsylvania and Louisiana.

No Alabama locations were mentioned in connection with the inquiry, according to the Web site. Until recently, Tenet co-operated St. Clair Regional Hospital.

The company denies any wrongdoing. Rather, Tenet says it wants "to be part of CMS' solution to the outlier issue and we support across-the-board modifications." The company says it is surprised at the payments some of its hospitals have received.

Tenet also is being probed by the Department of Health and Human Services over the billing.