Feds launch investigation into Tenet's Detroit Medical Center: 7 things to know

The U.S. Attorney's Office for the Eastern District of Michigan is investigating whether Detroit Medical Center, part of Dallas-based Tenet Healthcare, violated the Anti-Kickback Statute, Stark Law and the False Claims Act, according to a recent Securities and Exchange Commission filing.

Here are seven things to know about the investigation.

1. In September 2016, Tenet and a few of its subsidiaries entered into an agreement with the Department of Justice to resolve a qui tam, or whistle-blower, lawsuit and a criminal investigation. As part of that settlement, Tenet executed a nonprosecution agreement with the DOJ and the U.S. Attorney's Office for the Northern District of Georgia.

2. The NPA requires Tenet to hire an outside law firm to monitor and oversee the company's compliance with the agreement, and to cooperate with the DOJ and the U.S. Attorney's Office in any investigation into the company's conduct during the term of the NPA. The agreement is scheduled to expire Nov. 1, 2020.

3. In its recent SEC filing, Tenet said it could have breached the NPA by failing to report allegations of actual or potential violations of the Anti-Kickback Statute to the DOJ.

4. Specifically, the DOJ claims Tenet failed to report that Crain's Detroit Business published an article in August 2017 alleging DMC laid off 14 nurse practitioners and physician assistants due, in part, to Tenet's concerns that the providers' prior employment did not comply with the Anti-Kickback Statute, Stark Law and the False Claims Act.

5. Additionally, Tenet did not promptly report receiving a document request from the U.S. Attorney's Office for the Eastern District of Michigan and the Civil Division of the DOJ, according to the SEC filing. The U.S. Attorney's Office asked Tenet to provide documents related to a civil investigation of DMC for potential violations of the Anti-Kickback Statute, Stark Law and the False Claims Act. The document request was related to the allegations in the Crain's article.  

6. The NPA required Tenet to hire an outside law firm to monitor and oversee the company's compliance with the agreement. That law firm is performing a retrospective review of Tenet's compliance with reporting obligations.

7. In the first quarter of 2018, the DOJ told Tenet it will wait until the retrospective review is complete before making a decision on the appropriate remedy for the breach of the NPA. Tenet anticipates the review and discussions with the DOJ to continue into the second quarter of 2018.

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