Tenet Settles FCA Suit Over Needless Pacemakers For $1.4M

Posted February 11th, 2020.

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By Kevin Stawicki

Law360 (February 11, 2020, 3:27 PM EST) — Tenet Healthcare Corp. and one of its California hospitals will pay the federal government $1.4 million to resolve a False Claims Act lawsuit claiming it implanted unnecessary pacemakers into patients and stuck Medicare with the tab, the U.S. Department of Justice announced Tuesday.

The settlement ends a portion of the qui tam lawsuit filed by whistleblower Michael Grace accusing the Texas-based health care company and its Palm Springs hospital Desert Regional Medical Center of running a scheme to defraud the federal government since as early as 2014 to implant cardiac event recorders in patients who didn’t need them.

“Invasive medical procedures, such as implanting heart monitors, are not without risk,” Timothy B. DeFrancesca, special agent in charge for the Office of Inspector General of the U.S. Department of Health and Human Services, said in a statement. “Therefore, when these procedures are medically unnecessary, as contended in this case, people in government health programs are put at needless peril, and taxpayers end up with the bill.”

Vincent McKnight of Sanford Heisler Sharp LLP, who represents the whistleblower, told Law360 on Tuesday that the settlement indicates the government’s support of the allegations raised by Grace, a former Desert Regional employee.

“Not everyone who comes to the emergency room needs a pacemaker or electronic monitoring device for the heart just because they happen to be a certain age,” McKnight said. “The government agreed with us that that was wrong.”

Grace will get $240,789 from the settlement and his attorneys will get $250,000 in fees.

A Tenet representative told Law360 in an email Tuesday that it cooperated with the government to reach the settlement.

“We stand behind the efforts of our team — our hospital and physicians identified and took steps to address this matter prior to the filing of the lawsuit and remain committed to full compliance with all federal health care program requirements,” the representative said.

The lawsuit is still under seal in California federal court because similar claims are pending against another Tenet hospital and a staffing and management services provider.

“There are other things that are still in play,” McNight said. “We’ve got one foot in the door and one foot out of the door.”

Tenet has been embroiled in health care fraud litigation for years.

The company reached a tentative $66 million settlement in November to put to rest whistleblower allegations it was part of a scheme in which doctors received kickbacks for referring patients to an Oklahoma hospital it owns,

In 2016, Tenet and two of its hospitals agreed to pay $513 million and enter guilty pleas to resolve investigations into payments of kickbacks for referrals of pregnant immigrants.

A representative for Tenet did not immediately respond to requests for comment Tuesday.

The whistleblower is represented by H. Vincent McKnight, Ed Chapin, Grant Morris and Christine Dunn of Sanford Heisler Sharp LLP.

The government is represented by Benjamin Young of the U.S. Department of Justice’s Civil Division.

The case is U.S. ex rel. Grace v. Tenet Healthcare Corp. et al., case number 17-cv-1481, in the U.S. District Court for the Central District of California.

–Additional reporting by Jeff Overley and Hailey Konnath. Editing by Stephen Berg.

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