US Department of Justice v. Tenet Healthcare Corporation
Analysis Group was hired by the US Department of Justice to provide quantitative analysis related to allegations of questionable billing practices by Tenet Healthcare Corp., operator of the country's second-largest hospital chain. In an outcome covered widely in the press, Tenet settled the claims of fraud without admitting wrongdoing, agreeing to pay the US more than $900 million -- one of the largest settlements ever paid in association with health fraud.
Analysis Group affiliate Howard Birnbaum and Principal Mark Gustafson worked with Laura Peterson of the Harvard School of Public Health and our academic affiliate, Professor Arnold Barnett of MIT's Sloan School of Management, to review, analyze, and classify detailed bills for hospital stays. In question was the issue of inappropriate "outlier payments" -- payments that are associated with very sick, expensive-to treat-patients, where the treatment costs fall outside of prescribed parameters. The DOJ contended that Tenet hospitals inflated charges in excess of any increase in costs of patient treatment, and billed for services that were not provided.