A former executive with the giant Tenet hospital chain has been charged in Miami with paying bribes to a clinic for patient referrals in a scheme to bill hundreds of millions of dollars to the U.S. government.
John Holland, a former senior vice president for Tenet Healthcare Corp., is also accused of misleading federal authorities about the company’s amends for unlawful billing practices dating back more than a decade.
Holland, 59, pleaded not guilty Wednesday in Miami federal court to charges of paying $12 million in kickbacks to Clinica de la Mama, which referred expectant mothers to the chain’s hospitals for neonatal services reimbursed by the Medicaid program.
The clinic provided prenatal care to predominantly undocumented Hispanic women before referring them to Tenet’s hospitals in Georgia and South Carolina, according to an indictment. The undocumented immigrants were not eligible for regular Medicaid benefits, but they could qualify for certain types of services, such as “emergency” labor and delivery, at taxpayer expense.
Dallas-based Tenet — which reached a $514 million settlement to resolve criminal and civil claims with the U.S. government and those two states in October — declined to comment about Holland’s prosecution by Justice Department lawyers who specialize in healthcare fraud in Miami. Tenet, the nation’s second-largest hospital chain, operates about a dozen hospitals in Florida.
Holland’s indictment was filed in Miami because Tenet’s southern region submitted at least $400 million in fraudulent charges to Medicaid through a billing center in Boca Raton that was under his authority from 2007 to 2013. Medicaid, a federally subsidized healthcare program run by states for indigent people, paid at least $127 million to Tenet’s hospitals in Georgia and South Carolina.
Holland also is charged with providing false compliance reports to the U.S. Department of Health and Human Services in Miami Lakes — in violation of Tenet’s $900 million civil settlement agreement with the government over inflated charges to the Medicare program in 2006. The purpose of the “Corporate Integrity Agreement” required Tenet to comply with federal healthcare laws for five years.
Holland, indicted last week on healthcare, mail and kickback charges, left Tenet in 2013 and has been working for another hospital group in Dallas. His defense attorney, Richard Deane, and a Justice Department lawyer, Antonio Pozos, reached an agreement on Holland’s bond, set at $3 million and granted by Magistrate Judge Edwin Torres. That allowed Holland to be released late Wednesday.
If convicted, the longtime healthcare executive not only faces a potentially long prison sentence, but U.S. authorities plan to seize his homes in Dallas and Park City, Utah.
Holland’s attorney criticized the Justice Department’s prosecution, saying “the company's resolution should have ended the matter.”
“The allegations relate to [Tenet] 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,” said Deane, with the law firm Jones Day in Atlanta. “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.”
According to the indictment, Holland and other unnamed co-conspirators orchestrated a scheme to have Tenet pay bribes and provide other “unlawful inducements” such as loans to Clinica de la Mama’s operators to refer their patients to the chain’s hospitals in Georgia and South Carolina.
“To justify the outlay of significant monies to Clinica and to conceal the true nature and extent of Tenet Hospitals’ unlawful relationship with Clinica, John Holland and his co-conspirators created and caused to be created pretextual contracts between the Tenet Hospitals and Clinica,” according to the indictment.
“Under these pretextual contracts, the Tenet Hospitals purported to pay Clinica to provide various purported services to the Tenet Hospitals,” but they were “not needed and justifiable” or “not rendered at all,” the indictment said.
Holland and his co-conspirators paid illegal kickbacks to Clinica’s operators by circumventing Tenet’s internal accounting controls required under the chain’s corporate integrity agreement with the U.S. government from more than a decade ago. They “falsified Tenet’s books, records, and reports and made and caused to be made materially false, fraudulent and misleading representations and omissions to the government,” the indictment said.