Becker's Hospital Review

54 CFO / FINANCE Feds launch investigation into Tenet's Detroit Medical Center: 7 things to know By Ayla Ellison T he U.S. Attorney's Office for the East- ern District of Michigan is investigat- ing whether Detroit Medical Center, part of Dallas-based Tenet Healthcare, violat- ed the Anti-Kickback Statute, Stark Law and the False Claims Act, according to a Securi- ties and Exchange Commission filing. Here are seven things to know about the in- vestigation. 1. In September 2016, Tenet and a few of its subsidiaries entered into an agreement with the Department of Justice to resolve a qui tam, or whistle-blower, lawsuit and a crimi- nal investigation. As part of that settlement, Tenet executed a nonprosecution agreement with the DOJ and the U.S. Attorney's Office for the Northern District of Georgia. 2. e NPA requires Tenet to hire an outside law firm to monitor and oversee the compa- ny's compliance with the agreement, and to cooperate with the DOJ and the U.S. Attor- ney's Office in any investigation into the com- pany's conduct during the term of the NPA. e agreement is scheduled to expire Nov. 1, 2020. 3. In its recent SEC filing, Tenet said it could have breached the NPA by failing to report allegations of actual or potential violations of the Anti-Kickback Statute to the DOJ. 4. Specifically, the DOJ claims Tenet failed to report Crain's Detroit Business published an article in August 2017 alleging DMC laid off 14 nurse practitioners and physician as- sistants due, in part, to Tenet's concerns the providers' prior employment did not comply with the Anti-Kickback Statute, Stark Law and the False Claims Act. 5. Additionally, Tenet did not promptly re- port receiving a document request from the U.S. Attorney's Office for the Eastern District of Michigan and the Civil Division of the DOJ, according to the SEC filing. e U.S. At- torney's Office asked Tenet to provide docu- ments related to a civil investigation of DMC for potential violations of the Anti-Kickback Statute, Stark Law and the False Claims Act. e document request was related to the alle- gations in the Crain's article. 6. e NPA required Tenet to hire an out- side law firm to monitor and oversee the company's compliance with the agreement. at law firm is performing a retrospective review of Tenet's compliance with reporting obligations. 7. In the first quarter of 2018, the DOJ told Tenet it will wait until the retrospective re- view is complete before making a decision on the appropriate remedy for the breach of the NPA. Tenet anticipates the review and discus- sions with the DOJ to continue into the sec- ond quarter of 2018. n UHS Q4 earnings jump to $220M: 4 things to know By Ayla Ellison K ing of Prussia, Pa.-based Universal Health Services saw revenues increase in the fourth quarter of 2017, and ended the period with higher net income than in the same quarter of 2016. Here are four things to know about UHS' financial results. 1. UHS said revenues climbed 6.7 percent year over year to $2.6 billion in the fourth quarter of 2017. 2. The revenue increase was partially attributable to patient volume growth. On a same-facility basis, admissions when adjusted for outpatient activity were up 7.3 percent compared to the same period of 2016. On the behavioral health side, adjusted admissions increased 2.5 percent year over year. 3. UHS saw expenses rise to $2.3 billion in the fourth quarter of 2017, up from $2.2 billion in the same period of the year prior. 4. UHS ended the fourth quarter of 2017 with net income of $219.6 million, up from $174.2 million in the same period of 2016. n Cleveland Clinic's operating income rebounds to $330M By Ayla Ellison C leveland Clinic ended 2017 with operating income of $330.6 million, up nearly 36 percent from $243.2 million in 2016, according to bondholder documents. Cleveland Clinic's revenues increased to $8.4 billion in 2017, up from $8 billion in the year prior. The boost was partially attribut- able to a 7 percent year-over-year increase in patient visits. In 2017, Cleveland Clinic's expenses totaled $7.4 billion, up from $7.2 billion in 2016. After factoring in nonoperating gains, the system recorded a net income of $1.2 billion in 2017, compared to $513.5 million in the year prior. Cleveland Clinic President and CEO Tom Mihaljevic, MD, high- lighted the system's financial results in a State of the Clinic pre- sentation in February. He said the system's success was largely due to the hard work of his predecessor, Toby Cosgrove, MD. "The achievements of 2017 reflect the legacy of Dr. Toby Cos- grove," Dr. Mihaljevic said. "He served Cleveland Clinic for more than 40 years — as cardiac surgeon, department chair, and CEO and president. He transformed Cleveland Clinic in more ways than we can count. He leaves us well-positioned for future growth." n

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