Executive Fraud Blog

Tenet Healthcare Corp. recently settled a civil penalty to the Securities and Exchange Commission (SEC) of $10 million. The investigation originated in response to allegations of Medicare fraud that Tenet had inflated the costs of providing care for sick Medicare patients.

In the midst of this fraud was an investigation into an accounting scandal related to managed care contractual reserves. The former CFO has settle a personal investigation for $150k and the CAO has settle a civil penalty as well of $240k.

Looks like they are just paying to get this to go away. I think the SEC should come down harder on them if they truly want to discourage healthcare fraud. The individuals received a slap on the wrist when compared to their incomes as executives.

Recently federal prosecutors have filed criminal proceedings for a Miami healthcare fraud that is seeking to recover over $30 million from several medical clinics and durable medical equipment companies. The fraud scheme involved kickbacks to the defendants for sending patients to their respective pharmacies. Patients were also discovered to have sold their Medicare information in order to file bogus prescriptions from crooked doctors that would then be filled by these pharmacies.

Testimony in court revealed that patients were paid $100-150 per month in order to commit Medicare fraud. By compounding their own non-FDA approved drugs they were able to bill Medicare for over priced drugs then pay their patients to return again for a similar kickback deal. Medicare fraud has a significant impact on the quality of care that can ultimately be provided to those seniors and disable members that actually need these resources.