United States v. Tenet Healthcare Corp.

MEMORANDUM AND ORDER REGARDING DEFENDANTS’ MOTION TO DISMISS PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(B)(1)

I.

INTRODUCTION

The defendants named in this suit, 26 hospitals and their corporate owners, pro vide healthcare to thousands of patients, including many who are entitled to Medicare coverage for at least a portion of their treatment. To obtain Medicare reimbursement for the treatment of such patients, medical providers, like the defendant hospitals, must submit to the government a claim to which they assign codes that determine the fee the government will pay for the treatment. Treatment for serious illnesses generates a higher reimbursement than treatment for minor, or less serious, conditions.

The variation in fees paid for services rendered creates an opportunity for an unscrupulous healthcare provider to increase its revenue by “upcoding” — assigning codes to a claim that will generate a higher reimbursement to the provider than the patient’s condition would warrant if the reimbursement claim were properly coded. Here the government, asserting jurisdiction under 28 U.S.C. § 1345 , which creates federal subject matter jurisdiction over suits brought by the…