US govt warns hospitals on Medicare billing abuses

Reuters, 12.04.02, 4:44 PM ET

CHICAGO, Dec 4 (Reuters) - A top U.S. health official on Wednesday warned that hospital groups might be routinely overcharging the government's Medicare program, an issue that is dogging embattled Tenet Healthcare Corp. (nyse: THC - news - people)

Tom Scully, administrator of the U.S. Centers for Medicare and Medicaid Services, told hospital executives in a conference call that "everybody is focusing on Tenet, but there are a number of others," according to a CMS representative.

Santa Barbara, California-based Tenet, which operates 113 hospitals in 16 states, is being investigated by the U.S. government for its pricing policies.

Tenet, the second-biggest U.S. hospital chain, contends it has not broken the law but is reviewing its pricing practices.

Tenet on Tuesday slashed its fiscal 2003 and 2004 profit projections, as Medicare cuts payments to high-cost hospitals.

Scully spoke a day after the CMS warned that it will "clamp down" on unscrupulous billing by hospitals that participate in the government's Medicare program for the elderly.

To detect the offenders, CMS is recruiting its private health insurers that handle all claims-processing for the government, the CMS representative said.

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