Part Three - Tenet Shareholder Committee

Greed, Scandal & Wrongful Deaths
at Tenet Healthcare Corp.

A multi part series from the Tenet Shareholder Committee

As the Tenet Shareholder Committee finishes its fifth year, we have prepared a summary of what, from our point of view, went wrong at Tenet and a history of our longstanding effort to reform this company. We are publishing this multi part series on our web site.

Today (02/23/2005):
Part 3 – Enforcement Failures Point to Needed System Reforms
Find below a brief description of each section in Part 3.
Click here to see Part 3 in full

Failure of CMS and HHS OIG to Prevent Abuse of the System

CMS

How the outlier payment formula worked and how Tenet gouged Medicare
CMS Administrator Tom Scully’s evolving position on Tenet’s abuse of the system.
How could Scully have not known that annually test .5 to billion was being ripped off from Medicare?

HHS OIG

In a case filed in federal district court in Los Angeles, the federal government has charged Tenet with, among other things, knowingly violating the 1994 Corporate Integrity Agreement (CIA)
The 1994 CIA gave the HHS OIG authority to examine NME/Tenet records in detail, to insure compliance. Instead, HHS OIG relied on a convicted felon to self report its fraud and abuse. Would J. Edgar Hoover have relied on Willie Sutton to tell him which bank he intended to rob next?
Given Tenet’s felonious history, HHS OIG had a responsibility to exercise greater scrutiny in monitoring the compliance of Tenet after the CIA was put in place. Had it done so, we believe a significant amount of Tenet’s unlawful behavior would have been discovered earlier and considerable damage to patients, shareholders and taxpayers could and would have been prevented.

JCAHO – Reliable Ratings or Misleading Recommendations?

Tenet’s Palm Beach Gardens hospital was fully accredited by JCAHO when CMS came within one day of a shut down of the hospital down due to serious infection control problems.
JCAHO accredited Redding Medical Center during the years that hospital was allegedly performing unnecessary invasive cardiac procedures.
“The Joint Commission never identified the systemic problems at Redding.”
How can a Tenet Board member serving as a JCAHO commissioner be anything other than a conflict of interest?

Needed: Real Oversight and Enforcement by Those Charged with Ensuring the Integrity of Our Healthcare System

In the last 10 years, there have been 8 government settlements, with Tenet writing large checks to the government.
“Check book” justice has failed to prevent a recurrence of scandals
Tenet senior executives and Board members, as well as the company, should be held responsible for unjust enrichment at the expense of patients, shareholders and taxpayers.
Complicit individuals should be terminated and banned from future participation in government healthcare programs.
Pay incentives for hospital CEO’s should be based on measured and verified delivery of quality healthcare, not individual hospital profitability.
There should be full public disclosure of records turned over to the government as part of investigations that end in settlements. Required reporting under Corporate Integrity Agreements should also be publicly disclosed. Patient privacy can be protected with redactions as necessary.
The government should seek a full recovery of funds misappropriated, “gamed” or cheated from government healthcare programs. A return of pennies on the dollar serves only to reward wrong doing and encourages even more fraud and abuse.

Healthcare Provider Incentives Should Be Linked to Demonstrable Measures of Improved Quality of Care

Compensation incentives linked to financial performance can create a conflict between patients and providers.
Incentives based on revenue enhancement lead to a situation like that uncovered at Redding – medically unnecessary, expensive, and invasive coronary procedures.
Cost cutting incentives can result in services and resources being cut to the bone, which can lead to bad patient outcomes.
What is needed is a series of incentives, financial and otherwise, designed to improve quality of care.
There are a number of models, such as quality bonuses; placing compensation at risk based on performance on quality measures; fee schedules linked to performance, and other concepts worthy of consideration.

Medicare Reform

Medicare faces a trillion unfunded liability.
By comparison the Social Security shortfall is an estimated
trillion.
The Committee believes many of the proposals originating with the National Bipartisan Commission on the Future of Medicare are worthy of consideration.
We earnestly hope that the truth about Tenet Healthcare Corp., as described in our report, will serve as a stark reminder of what can happen if those who abuse the Medicare system are not adequately punished and those who are charged with the responsibility of ensuring Medicare compliance don’t to their job. The damage done by Tenet to patients, shareholders and taxpayers will be, at least partially offset, if the sorry story and sad state of this company serves as a catalyst for change.