Issue link: https://beckershealthcare.uberflip.com/i/717576
47 CFO / FINANCE Tenet Posts $44M Net Loss in Q2, Increases Reserve to Settle Kickback Allegations By Ayla Ellison D allas-based Tenet Healthcare reported a net loss of $44 million in the second quarter of 2016, compared to a $60 million net loss in the same period of 2015. Tenet recorded revenue of $4.2 billion in the second quarter, up 0.6 percent from the same period of the year prior. e financial boost was driven by a 0.5 percent increase in adjusted patient admissions. e hospital operator posted strong results in its ambulatory segment in the second quarter, with revenue attributable to this segment in- creasing 37.3 percent year over year. Tenet said its Conifer Health Solutions and United Surgical Partners International subsidiaries both experienced double-digit revenue growth in the second quarter when compared to the same period of the year prior. However, aer accounting for an increase in operating expenses and litigation reserves, Tenet ended the quarter in the red. e for-profit hospital operator previously disclosed it is the subject of a criminal investigation by the Department of Justice. e criminal lawsuit arose out of a civil lawsuit filed under the qui tam provision of the False Claims Act. e suit alleges four Tenet hospitals paid illegal kickbacks to clinics that referred undocumented pregnant patients to them 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. Tenet believes it has reached an agreement in principle with the gov- ernment to resolve the criminal investigation and civil litigation for $514 million. Based on the agreement, Tenet increased its reserve for the litigation from $407 million to $516 million. e final resolution of the investigation and litigation is subject to the ne- gotiation and execution of definitive agreements, according to Tenet. n Abrupt Physician Departures Take Toll on LifePoint's Bottom Line By Ayla Ellison B rentwood, Tenn.-based LifePoint Health saw revenue increase in the second quar- ter of 2016, while net income dropped. LifePoint reported revenue of $1.6 billion in the second quarter, up 25.3 percent from $1.3 billion in the same period of the year prior. LifePoint said the financial boost was primarily attributable to its recent acquisitions of hospi- tals in Kentucky, Indiana, Wisconsin, North Car- olina, Georgia and South Carolina. Although LifePoint saw revenue rise in the sec- ond quarter, the company said the loss of key physicians at one of its largest hospitals caused expenses to increase. "This resulted in addition- al professional fees, call pay, severance costs and recruiting expenses," said LifePoint. The company also incurred the expense of im- plementing a new physician billing system at one of its recently acquired hospitals. LifePoint ended the second quarter with net in- come of $20.1 million, down 59.6 percent from $49.8 million in the same quarter of the year prior. n BECKER'S CEO + CFO ROUNDTABLE november 7-9, 2016 swissotel, chicago Call 1.800.417.2035 or email registration@ beckershealthcare.com keynotes by dr. ronald dephinho, dr. charles w. sorenson, dr. richard gilfillan, catherine jacobson, warner thomas & jonathan bush