Tenet Settles For $ 900 Million With US

DALLAS: The Tenet Healthcare Corporation has agreed to a $ 900 million settlement with federal officials to end investigations into accusations of overbilling Medicare. In addition, the company plans to sell about a dozen hospitals in an effort to regain its financial footing.

The settlement,valued at about one-fourth of Tenet's stock market value will be paid over four years and ends all federal investigations by the Department of Justice and several United States attorneys.

The deal means that there will be no finding that Tenet broke the law, but the company's chief executive, Trevor Fetter, said Tenet "made mistakes" before 2003, when the company came under investigation.

The settlement ends investigations by federal prosecutors in Los Angeles, San Francisco, St. Louis, New Orleans, Memphis and El Paso.

Tenet is suppose to pay $ 725 million plus interest to settle accusations that it overbilled Medicare for the most costly cases, made illegal kickbacks to doctors to refer Medicare patients to its hospitals and used improper billing codes to bilk the program.

The company would also pay $ 450 million plus $ 20 million interest immediately and pay off the balance by mid-2010. However, the company agreed not to seek an additional $ 175 million that it argued it was owed by Medicare.

Mr. Fetter, who became chief executive in 2003, said, "Some of this company's past actions did not measure up to the high standards that we have imposed on ourselves."

Also, the investors responded tepidly to the deal. Tenet shares fell 13 cents, to $ 7.10, on a day when the Dow Jones industrial average rose more than 200 points.

However, the settlement did not end a Securities and Exchange Commission investigation into the company's disclosure of Medicare and managed care payments.

It has also been planned to sell about a dozen hospitals by mid-2007. Four are in New Orleans, including Memorial Medical Center, where more than 40 bodies were discovered after Hurricane Katrina last year.