Issue link: https://beckershealthcare.uberflip.com/i/759093
24 JOINT VENTURES Here are eight things to know: 1. e volume of mergers and acquisitions in health services grew 8 percent in the second quarter over the first quarter of 2016 and 16 percent year-over-year. 2. ere were 239 deals in the second quarter. is is the seventh quarter where the deal vol- ume was more than 200 transactions. ere were 87 deals in the long-term care subsector. 3. e deal value increased 4 percent in the second quarter compared to the first quarter of 2016 but decreased 39 percent year-over- year. e biggest contributor was the physi- cian medical group subsector, which made up 42 percent of the overall deal value. 4. AmSurg's $6.7 billion merger with Envision Health led the way for the physician medical groups in terms of value. 5. ere were two mega-deals — those ex- ceeding $1 billion — in the second quarter, compared to five over the same time period last year. e value of mega deals was down 13 percent sequentially and 53 percent year- over-year. 6. e breakdown of deal value is: • Physician medical groups: $6.7 billion • Long term care: $2.3 billion • Hospitals: $1.9 billion • Home health: $426 million • Behavioral care: $240 million • Managed care: $159 million 7. e breakdown of deal volume is: • Physician medical groups: 27 • Long-term care: 87 • Hospitals: 22 • Home health care: 12 • Behavioral care: 17 • Managed care: 5 8. e trading multiples trended up for labs and imaging, home health and managed care; the multiples were down for ambulatory care, outsourcing and acute care as well as skilled nursing facilities. e multiples for ambula- tory care went from 16.1 in the second quar- ter last year to 13.8 in the second quarter this year. n Investor Sues Tenet After $514M Kickback Deal: 7 Things to Know By Ayla Ellison A shareholder filed a putative class-action lawsuit against Tenet Healthcare Oct. 7, claiming the Dallas-based for-profit hospital operator made false and misleading statements about its business, which caused shareholders to suffer losses. Here are seven things to know about the lawsuit against Tenet, which is pending in California federal court. 1. Tenet disclosed in June 2015 that it was the subject of a criminal investigation by the Department of Justice. The criminal investigation, which dates back to 2012, arose out of a civil lawsuit filed under the qui tam provi- sion of the False Claims Act. The suit alleges four Tenet hospitals paid illegal kickbacks to clinics that referred undocumented pregnant patients to them for Medicaid- covered deliveries. 2. The criminal investigation centers on the relationship the four Tenet hospitals had with Hispanic Medical Manage- ment. The hospitals contracted with HMM for translation, marketing, management and Medicaid eligibility determi- nation services. 3. In 2014, federal investigators filed criminal charges against two people involved in the kickback scheme, a former owner of HMM and a former employee of a Tenet hospital. On April 10, 2015, the DOJ informed Tenet that four of its hospitals had become targets of the criminal in- vestigation. 4. According to the lawsuit filed Oct. 7 by shareholder Nich- olas Pennington, Tenet violated the Securities Exchange Act by repeatedly failing to disclose the kickback scheme in Securities and Exchange Commission filings from February 2012 through 2015. He alleges Tenet artificially inflated its share price by misleading investors about its Medicaid re- imbursements and making false or misleading statements about its business and operations. 5. On Aug. 1, 2016, Tenet said it believed it had reached an agreement in principle with the government to resolve the criminal investigation and civil litigation for nearly $514 million. According Mr. Pennington's complaint, Te- net's share price fell 4.64 percent after this news, closing at $27.57 on Aug. 2. 6. On Oct. 3, Tenet said the agreement had been finalized. In addition to the $514 million settlement, Tenet agreed to pay $3 million in related fees and expenses. Tenet's share price fell 4.02 percent after the announcement, closing at $21.75 on Oct. 3, according to the investor's lawsuit. "As a result of defendants' wrongful acts and omissions, and the precipitous decline in the market value of the com- pany's securities, plaintiff and other class members have suffered significant losses and damages," the lawsuit states. 7. Two of Tenet's current executives are named as defen- dants in the lawsuit: President and CEO Trevor Fetter and CFO Daniel Cancelmi. Tenet's former CFO Biggs C. Porter is also named as a defendant. n continued from front page