SEC launches formal probe into Tenet's billing

Reuters, 07.09.03, 1:34 PM ET


NEW YORK, July 9 (Reuters) - Tenet Healthcare Corp. (nyse: THC - news - people) on Wednesday said U.S. regulators stepped up their probe of the No. 2 hospital operator's billing practices, intensifying an informal probe launched last year.
Santa Barbara, California-based Tenet said it received a subpoena on Tuesday from the Securities and Exchange Commission requesting documents going back to May 31, 1997.

The requested documents relate to Tenet's billing of Medicare and other financial issues.
The company, which is being sued by the U.S. Justice Department over Medicare fraud allegations, said it will supply the documents and continue to cooperate with the SEC.

Sheryl Skolnick, analyst at Fulcrum Global Partners, said the SEC investigation should cause concern for investors.
If the SEC is examining how Tenet's revenue and cash flow were strengthened by allegedly inflated Medicare reimbursements and that affected how investors valued the company, it could bolster lawsuits against the hospital chain beyond any penalties the agency may levy, Skolnick said.

Shares of Tenet were down 18 cents, or $1.5 percent, at $11.97 in midday trading on the New York Stock Exchange.
The shares were trading as high as $52.50 in October 2002 but the stock fell sharply after a wave of news regarding regulatory actions and investigations against the company.