Business
Tenet settles shareholder suit
NEWS IN BRIEF — Posted Jan. 30, 2006
Tenet Healthcare Corp. has agreed to pay $215 million to settle two class-action shareholder lawsuits alleging that the hospital chain made false and misleading statements about certain Medicare payments.
If approved, the settlement would resolve lawsuits that are pending in state and federal courts in California. The funds would be distributed to shareholders who qualified under the terms of the agreement. The company did not admit guilt.
Also under the agreement, announced Jan. 12, two former Tenet executives agreed to contribute a total of $1.5 million to the shareholder fund. Former Tenet chief executive and Chair Jeffrey Barbakow agreed to pay $1 million and former chief operating officer Thomas Mackey agreed to pay $500,000, Tenet said.
Shareholders sued in 2002 alleging that Tenet and some of its leaders made false statements about Medicare outlier payments. The company voluntarily changed its outlier billing practices in 2003, a few days before the U.S. Justice Dept. sued, claiming that Tenet had overbilled Medicare. The Securities and Exchange Commission has also launched an investigation into the matter.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2006/01/30/bibf0130.htm.
