October 3, 2016 / 3:36 PM / 3 years ago

Tenet Healthcare to pay more than $513 million over fraud scheme: Justice Department

WASHINGTON (Reuters) - U.S. hospital chain Tenet Healthcare Corp and two of its Atlanta-area units will pay more than $513 million to resolve criminal charges and civil claims relating to a scheme to defraud the United States and pay kickbacks in exchange for patient referrals, the Justice Department said on Monday.

Tenet had disclosed in August that it had reached an agreement in principle on the matter. Tenet shares fell 5 percent, or $1.26, to $21.40 in Monday trading.

The scheme involved primarily undocumented, expectant mothers who were told at prenatal care clinics that Medicaid would cover their costs if they gave birth at one of the Tenet hospitals. The clinics received bribes and kickbacks from the hospitals and involved about 20,000 women who received Medicaid benefits, the Justice Department said.

Tenet said in a statement that the conduct in the matter was “unacceptable” and that it has amended and expanding policies around referral source arrangements.

Tenet subsidiaries Atlanta Medical Center Inc and North Fulton Medical Center Inc agreed to plead guilty to conspiracy to defraud the United States and to pay those healthcare kickbacks and bribes in plea agreements that remain subject to court approvals, the department said in a statement.

Tenet agreed to pay $244 million to the federal government, $122 million to Georgia and $892,125 to South Carolina to resolve claims. Ralph Williams, a Georgia resident who filed a whistleblower suit against Tenet, will receive $84 million of the civil settlement.

Reporting by Eric Walsh and Caroline Humer; Editing by Bill Trott and Alan Crosby

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