Medicare Compliance & Reimbursement

OIG pursues "death penalty" against Tenet facility.

Exclusion from Medicare: It's one of the harshest and most financially devastating penalties the HHS Office of Inspector General can impose on a hospital.

But if the stakes are perceived to be high enough, the watchdog agency isn't afraid to use it.

Tenet Healthcare Corp. revealed Sept. 4 that the OIG is launching proceedings that could result in the exclusion of Redding Medical Center from Medicare and other federal health care programs. The OIG maintains that, between 1999 and 2002, RMC "furnished cardiology and cardiac services (including several cardiac catheterizations and coronary artery bypass grafts) that were medically unnecessary and failed to meet professionally recognized standards of health care."

RMC's once wildly profitable - and now suspended - cardiology program has already resulted in a $54 million settlement payout by Tenet, although the company did not admit to any wrongdoing. The settlement was the largest ever in a case involving medical necessity fraud.

And now, the OIG is essentially putting RMC in the position of proving why it doesn't deserve to be ousted from Medicare. The agency's notice to RMC gives the facility 35 days to come up with documents and other evidence to show why it should be allowed to remain in Medicare. If, after reviewing the evidence, the OIG decides to exclude RMC, the hospital can appeal the decision via administrative law proceedings.

The case arises out of an ongoing fraud investigation involving cardiologists Dr. Chae Hyun Moon and Dr. Fidel Realyvasquez Jr., two non-Tenet employees who had privileges at Redding. Moon and Realyvasquez no longer practice at RMC. Since the case broke last year, Tenet has put in place enhanced compliance and quality monitoring procedures.