Charges Sink Tenet Healthcare Earnings

Wednesday May 14, 9:06 am ET

NEW YORK (Reuters) - Tenet Healthcare Corp. (NYSE:THC - News), the No. 2 U.S. hospital operator, reported on Wednesday a first-quarter loss after it changed its policy for billing the government for the sickest patients and took charges for restructuring and other items.

Tenet reported a loss of $20 million, or 4 cents per share, compared with a profit of $278 million, or 55 cents per share, a year ago.
After a government investigation into the hospital chain's reimbursement practices, the Santa Barbara, California company adopted a new policy for billing for "outlier payments," which are special Medicare payments made to health care providers for patients that incur unusually high costs.
The company said in March it would sell or consolidate 14 hospitals in a bid to cut costs and increase profit margins.

"Reported results for the quarter were impacted by a number of factors, including our voluntary reduction in Medicare outlier payments and pending hospital sales that must be accounted for as discontinued operations," said Jeffrey Barbakow, chairman and chief executive officer of Tenet.
Barbakow in April agreed to drop the chairman title as it seeks an independent chairman.
Excluding charges and discontinued operations, the company earned 34 cents per share. On that basis, analysts on average were expecting Tenet to earn 32 cents per share, according to tracking firm Thomson First Call (News - Websites).
Revenue rose to $3.45 billion from $3.38 billion a year ago.