A former senior executive of Tenet Healthcare Corp has been indicted on charges that he participated in a scheme to pay bribes for patient referrals, enabling the U.S. hospital chain to fraudulently bill state Medicaid programs for $400 million.
John Holland, a former senior vice president, was charged in an indictment filed in federal court in Miami with four counts of mail fraud, health care fraud and major fraud against the United States, the U.S. Justice Department said on Wednesday.
The charges came after Dallas-based Tenet and two of its Atlanta-area units reached a settlement with the Justice Department and agreed to pay more than $513 million to resolve criminal charges and civil claims in a related settlement.
"These charges underscore our continued commitment to holding both individuals and corporations accountable for their fraudulent conduct," said Acting Assistant Attorney General Kenneth Blanco said in a statement.
Holland, 60, of Dallas, pleaded not guilty during a court hearing in Miami. Richard Deane, his lawyer, said he believed "the company's resolution should have ended the matter."
"Mr. Holland is not guilty and we now look forward to presenting this case to a jury," Deane said in a statement.
Prosecutors said Holland beginning in 2000 was chief executive of Tenet-owned North Fulton Medical Center Inc in Roswell, Georgia, and served as senior vice president of operations for Tenet's southern states region from 2006 to 2013.
The indictment said that from 2000 to 2013, Holland and others engaged in a scheme to pay over $12 million in bribes and other illegal inducements to the owners and operators of a firm that operated clinics in Georgia and South Carolina.
In exchange, the clinics, which provided prenatal care to mostly undocumented Hispanic women, referred patients to Tenet hospitals and arranged for services to be provided to patients and their newborns at Tenet hospitals.
Prosecutors said Holland sought to conceal the scheme by circumventing internal accounting controls and falsifying records.
Prosecutors said the scheme enabled Tenet hospitals to fraudulently bill the Georgia and South Carolina Medicaid Programs for over $400 million, and allowed Tenet to obtain more than $149 million in Medicaid and Medicare funds.
The indictment said Holland also made false statements to the U.S. Department of Health and Human Services' Office of Inspector General about its compliance with the terms of a 2006 agreement reached as part of an earlier settlement.
The case is U.S. v. Holland, U.S. District Court, Southern District of Florida, No. 17-cr-20054.
(Reporting by Nate Raymond in New York; additonal reporting by Eric Beech in Washington; Editing by Bernard Orr)