Tenet in $900M Fed Settlement

PHILADELPHIA-Dallas-based Tenet Healthcare Corp. has agreed with the federal government on a $900-million settlement in the wake of a four-year-old investigation into improper Medicare billings. At the same time, the Texas firm is putting 11 of its 68 hospitals on the market, including three in metro Philadelphia. They are Graduate Hospital and Roxborough Memorial Hospital in the city and Warminster Hospital in Bucks County.

That divestiture will leave Tenet with two Philadelphia hospitals, Hahnemann University Hospital and St. Christopher’s Hospital for Children. Even with its downsizing, Tenet officials say they plan to spend $800 million this year in capital improvements at their 57 remaining hospitals.

In a prepared statement, Trevor Fetter, Tenet president and CEO, says the decision to sell the three metro Philadelphia hospitals was made so that the company could focus on improving Hahnemann and St. Christopher’s facilities. Tenet officials anticipate the sale of their three local hospitals may take up to a year to complete. According to industry sources, prospective buyers could include Community Health Systems of Tennessee, which owns five area hospitals; Jefferson Health System; the University of Pennsylvania Health System; and the Temple University Health System. While there is no asking price for the individual hospital dispositions, Fetter said during a conference call, “we anticipate proceeds of $250 million to $275 million in cash…once these sales are completed.”