Former Tenet Healthcare Corp. Executive Indicted for Alleged Role in $400 Million Fraud Scheme

A former executive of Dallas-based Tenet Healthcare has been indicted for allegedly paying kickbacks for patient referrals and intentionally misleading federal authorities.

According to the Department of Justice, the indictment alleges from 2000 through 2013 the executive played a role in an over-$400 million scheme to defraud, victimizing the U.S. government, the Georgia and South Carolina Medicaid programs, and prospective patients of Tenet hospitals.

John Holland, 60, was charged on Jan. 24 in the Southern District of Florida with one count of mail fraud, one count of healthcare fraud, and two counts of major fraud against the U.S. Holland previously served as vice president of operations for Tenet’s Southern states region and as CEO of North Fulton Medical Center in Roswell, Ga. Holland left Tenet in 2013 and served as CEO of Plano-based LHP Hospital Group in October of that same year.

Holland is accused of causing kickbacks and bribes to be paid to a clinic in the southern region that referred undocumented pregnant patients to North Fulton Medical Center Inc. and other Tenet hospitals for Medicaid-covered deliveries. While undocumented patients are not eligible for standard Medicaid coverage, they typically qualify during emergency medical assistance for delivery.

The DOJ reported Holland and his co-conspirators “circumvented Tenet’s internal accounting controls” to pay illegal kickbacks and bribes to the clinic. The scheme helped Tenet bill the Georgia and South Carolina Medicaid program for more than $400 million. The indictment also alleges Tenet obtained more than $149 million in Medicaid and Medicare funds based on the resulting patient referrals.

Tenet paid approximately $514 million to resolve criminal and civil allegations in the kickback case in October 2016.

Holland is also accused of providing the U.S. Department of Health and Human Services with false compliance reports and violating a corporate integrity agreement Tenet entered in 2006 to resolve allegations it bilked Medicare and other federal healthcare programs.

The allegations claim Holland made false and fraudulent statements to the HHS Office of Inspector General in connection with Tenet’s 2006 CIA. He falsely stated Tenet was in compliance with the terms of participation in the healthcare programs and the CIA, when he knew Tenet was paying for illegal patient referrals.

During the CIA’s duration from 2007 through 2011, Tenet received over $10 billion from federal healthcare programs. These payments would not have been given to Tenet if the company had opted out of participating in federal healthcare programs, according to the indictment.

David J. LeValley, Special Agent in Charge for the FBI’s Atlanta Division, says medicaid patients have the right to seek healthcare without fearing that care is tainted by bribes and illegal kickbacks.

“Not only did patients suffer because of these alleged actions, but this kind of alleged abuse threatens to drive up the cost of healthcare for everyone,” LeValley said in a statement. “The FBI is committed to ensuring that federal laws related to the healthcare industry are enforced, and this case is an example of that commitment.”

Holland’s attorney, Richard H. Dean, told The Dallas Morning News, “We don’t believe there is any case here, and the company’s resolution should have ended the matter. The allegations relate to contracts from more than 10 years ago that were openly reviewed and approved at multiple levels of the company, including by their lawyers, under circumstances in which there was no personal benefit or gain to Mr. Holland. In light of this, we are disappointed that the government has chosen to go forward with these charges. Mr. Holland is not guilty and we now look forward to presenting this case to a jury.”

Holland pleaded not guilty on Feb. 1 before U.S. Magistrate Judge Edwin G. Torres of the Southern District of Florida.

Contacted by D CEO Healthcare, Tenet declined to comment.


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