Business
Tenet to restate earnings
NEWS IN BRIEF — Posted Feb. 6, 2006
Hospital operator Tenet Healthcare Corp. said it will have to restate earnings during a five-year period after an investigation into managed care contracts at three of its California hospitals uncovered problems.
The Dallas-based company announced Jan. 19 that an audit initiated in July 2005 at the request of the Securities and Exchange Commission found that adjustments would be needed for its financial results for fiscal years 2000, 2001 and 2002, the seven months that ended Dec. 31, 2002, and the full year of 2003. As a result, Tenet said it also would revise earnings from 2004 to take a charge of $47 million.
The adjustments were deemed necessary because some contractual allowances and other reserves lacked adequate supporting documentation or were "otherwise inappropriate," the company said. Tenet added certain revenue and expenses should have been recorded earlier.
The company estimated the adjustments would affect net income or losses by 3% to 9%.
Tenet, the subject of several civil and criminal investigations in recent years, said no widespread problems were uncovered by the audit. Trevor Fetter, Tenet's president and chief executive, said the adjustments were part of the company's continued efforts to "address the legacy of mistakes made by this company."
Note: This item originally appeared at http://www.ama-assn.org/amednews/2006/02/06/bibf0206.htm.