Former Tenet executive indicted for alleged role in $400M fraud scheme

A former executive of Dallas-based Tenet Healthcare has been charged with paying kickbacks for patient referrals and misleading federal authorities, according to the Department of Justice

John Holland, 60,  who previously served as senior vice president of operations for Tenet's Southern States Region and as CEO of North Fulton Medical Center in Roswell, Ga., pleaded not guilty Wednesday. In an indictment filed Jan. 24, Mr. Holland is charged with one count of healthcare fraud and two counts of major fraud against the United States, according to the DOJ.

He's specifically accused of causing kickbacks and bribes to be paid to a clinic that referred undocumented pregnant patients to Tenet hospitals for Medicaid-covered deliveries. Undocumented patients are not eligible for regular Medicaid coverage. However, they typically qualify for emergency medical assistance when they deliver their babies.

According to the DOJ, Mr. Holland and his co-conspirators circumvented Tenet's internal accounting controls to pay illegal kickbacks and bribes to the clinic. The illegal scheme helped Tenet bill the Georgia and South Carolina Medicaid program for more than $400 million. 

In October 2016, Tenet agreed to pay approximately $514 million to resolve criminal and civil allegations in the kickback case. The criminal investigation, which dates back to 2012, arose out of a civil lawsuit filed under the qui tam provision of the False Claims Act.

Mr. Holland is also accused of providing HHS with false compliance reports in violation of a corporate integrity agreement Tenet entered into as part of a $900 million settlement it inked in 2006 to resolve allegations it bilked Medicare and other federal healthcare programs. 

Mr. Holland left Tenet in 2013 and began serving as CEO of Plano, Texas-based LHP Hospital Group in October of that year.

In a statement to The Dallas Morning News, Mr. Holland's attorney, Richard H. Deane, said, "We don't believe there is any case here and the company's resolution should have ended the matter. The allegations relate to contracts from more than 10 years ago that were openly reviewed and approved at multiple levels of the company, including by their lawyers, under circumstances in which there was no personal benefit or gain to Mr. Holland. In light of this, we are disappointed that the government has chosen to go forward with these charges. Mr. Holland is not guilty and we now look forward to presenting this case to a jury."

Tenet declined to comment on the case against Mr. Holland.

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