Judge Approves Nationwide Settlement Of Allegations Tenet Overcharged Uninsured
A California judge Aug. 5 approved a settlement of a nationwide class-action lawsuit brought against Tenet Healthcare Corp. over prices that uninsured and some underinsured patients were charged for prescription drugs and other medical products and services at hospitals owned and operated by the company and its subsidiaries (Tenet Healthcare Cases II, Cal. Super. Ct., No. J.C.C.P. 4289, settlement approved 8/5/05).
The settlement, which was approved by Wendell Mortimer Jr. of the California Superior Court for Los Angeles County, directly resolves 13 cases that all involved disputes over amounts charged to uninsured patients, regardless of whether they were indigent, and that were coordinated for trial there.
The settlement, according to the court’s approval order, resolves a nationwide class action applying to all existing and after-filed claims pending against Tenet in other states. It also calls for the payment of $11 million in attorneys’ fees.
In March, when the agreement was proposed, Tenet lauded the proposal as a opportunity for settlement of all the state court litigation brought by uninsured patients currently pending against Tenet.
Consumer Protection Laws
The cases were brought primarily on behalf of uninsured patients, who were billed at the hospitals’ undiscounted gross charge rates, according to Tenet’s recent 10-K filing with the Securities and Exchange Commission. While the specific allegations and relief sought vary from case to case, the plaintiffs generally allege violations of state consumer protection statutes, breach of contract, and other state law claims, Tenet said in March (14 HLR 353, 3/17/05).
In recent years, Tenet has faced many lawsuits, some focusing on allegations of fraud and unnecessary surgery. In addition, litigation is pending in a federal district court in California over federal government charges that a Tenet hospital in San Diego paid certain physicians kickbacks, disguised as relocation payments, to bring in business. The company has also undergone major management changes and has sold some of its hospitals.
Text of the court’s order approving the settlement is available at http://op.bna.com/hl.nsf/r?Open=psts-6f4n3t.
Text of the settlement is available at http://op.bna.com/hl.nsf/r?Open=psts-6agrfn.
More information about the lawsuits involved also is included in Tenet’s most recent annual report, which can be found at http://www.sec.gov/Archives/edgar/data/70318/000104746905005606/a2152529z10-k.htm#dc1062_item_3._legal_proceedings.