Tenet beats class-action lawsuit stemming from kickback investigation: 6 things to know

The 11th U.S. Circuit Court of Appeals on April 18 upheld the dismissal of a lawsuit seeking to force Dallas-based Tenet Healthcare to reimburse Hispanic women for travel and medical expenses allegedly incurred as a result of a kickback scheme.

Here are six things to know about the lawsuit.

1. In June 2015, Tenet disclosed it was the subject of a criminal investigation by the Department of Justice. The investigation, which dated back to 2012, arose out of a civil lawsuit filed under the qui tam, or whistle-blower, provisions of the False Claims Act. The suit alleged four Tenet hospitals paid illegal kickbacks to Clinica de la Mama in Norcross, Ga., for referring undocumented pregnant women, who were eligible for emergency Medicaid coverage, to the hospitals to deliver their babies. Clinica offered prenatal care and ancillary services to predominantly uninsured and indigent Hispanic women.

2. Tenet reached an agreement with the federal government to resolve the criminal investigation and civil litigation in October 2016. Tenet agreed to pay approximately $514 million, plus related fees and expenses, to resolve the allegations.

3. In December 2016, a patient who was referred by Clinica to a Tenet hospital to deliver her babies sued Tenet. The patient, who is referred to in legal documents as "S.B.," claims Clinica advised her to enroll in an emergency Medicaid program in 2006, and then assigned her to an obstetrician. Clinica allegedly told S.B. she had to deliver her baby at Atlanta Medical Center, which Tenet owned at the time, to ensure Medicaid covered her prenatal and delivery costs. She delivered her baby at Atlanta Medical Center and incurred expenses that exceeded her Medicaid coverage.

4. In 2009, S.B. returned to Clinica after she conceived twins. She was insured, but Clinica allegedly advised her to enroll in the emergency Medicaid program because her insurance would not cover the cost of her high-risk pregnancy. According to the lawsuit, Clinica referred S.B. to a physician who told her she was required to deliver her twins at Atlanta Medical Center. S.B. once again incurred expenses that exceeded her Medicaid coverage. In 2010, she learned her private insurance would have covered her prenatal care and the delivery of her twins.

5. Tenet asked the district court to dismiss S.B.'s original lawsuit, and she then filed an amended complaint that included several claims against Tenet, including fraud, negligent misrepresentation, breach of contract and unjust enrichment. She filed the lawsuit on behalf of herself and other Hispanic women who incurred expenses as a result of the kickback arrangement.

6. Tenet filed a motion to dismiss S.B.'s amended complaint, which the district court granted. On April 18, the appellate court upheld the dismissal, holding that the lawsuit failed to state a claim for negligent misrepresentation, breach of contract and fraud, and that the unjust enrichment claims were untimely.

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