• Est Fines of $675-$845 million – Data Exposes Tenet’s Suspiciously High Outlier Payments from Medicare … Again
• Formers Employees & Experts Described Multiple Medicaid & Medicare Abuse Schemes
  • Undocumented Immigrants Used to Boost Medicaid Profits via “Million-Dollar Babies” 
  • Lawsuit Alleged Illegal Medicaid Upcoding
• “Manipulating” Costs to Game Reimbursement; Experts Call THC’s Cost Allocations Suspicious 
  • Private Jet Usage Billed to Taxpayers
• Undisclosed SEC Investigation Confirmed

“Tenet is notorious. This is not a new game for them … 

Tenet is notorious for upcoding. 

Tenet is notorious for extravagant cost to charge ratios. 

Tenet is notorious for giving themselves raises.

Tenet is notorious for pretty much doing anything they can — tweaking anything they can — to try to score a higher reimbursement. Even today…Everybody knows it.”

~ Healthcare Reimbursement Expert

We are short Tenet Healthcare (THC). We analyzed >20,000 documents from the Centers for Medicare & Medicaid Services (CMS). We analyzed thousands of California HCAI cost reports and chargemaster files. The data indicates that it is the same old Tenet, and they are at it again. 

• Our analysis shows Tenet investors should expect Medicare outlier fines of $675-$845 million.
  • Analysis indicates Medicare paid THC excess outlier payments of >$167 million.
  • Excess outlier payments drop directly to the bottom line; they are pure profit.
    • “You lose those outlier payments; it goes straight to the bottom line … it’s pure margin.” ~Former Hospital CEO
  • Data shows Tenet accelerated its outlier gaming activities immediately after the sunset of its 5-year Corporate Integrity Agreement, which it agreed to as part of a previous $900M settlement for outlier fraud.
• Tenet’s revenue is likely overstated– our CMS data analysis shows significant cost report irregularities compared to its regional peers.
  • We hired experts to review our analysis & Tenet’s hospital cost report data – they said it “makes no sense” and Tenet was likely “inflating indirect costs.” 
  • Data from Tenet’s hospitals show bloated indirect costs in revenue-producing departments.
    • 97% more indirect costs per-patient-day vs peers in Drugs Charged to Patients in Texas
    • 70% more on CT Scans in California
    • 294% higher in Electro cardiology in Florida.
  • Underlying cost allocations that defy logic: Costs allocated to “Medical Records” are 5-10x higher than peers.
    • Does anyone believe that McKinsey execs pay higher costs for books & records?
    • “I would put my money on it’s intentionally overstated… there are some things that have the ability to wiggle, and medical records is one of them, because they can’t prove really that you overstated that.” ~Healthcare Reimbursement Expert
• Management’s Private Jet charged to the government – A former THC reimbursement executive told us that costs for Tenet’s Private Jet were reimbursed through Medicaid & Medicare.
  • We tracked Tenet’s Private Jet and discovered it being used for ridiculous trips. Commutes across the San Francisco Bay Area? Avoiding traffic in SoCal? Does mgmt not own a car?
• Former employees said Tenet used undocumented migrants’ newborns to get extra Medicaid money.
  • Executives called the immigrant newborns “Million-Dollar Babies” and said the babies contributed “tens of millions in additional reimbursement.”
    • No, this isn’t the 2016 Atlanta case (a $544 million fine). 
    • This happened in Texas AFTER that settlement.
  • We believe it’s still happening – We uncovered multiple “birth tourism” companies currently advertising to immigrants. They told us they refer to a Tenet El Paso Hospital.
• Allegations of Illegal Upcoding – Doctors exposed patients being billed to Medicare and Medicaid with higher reimbursement codes than the actual treatment.
  • Patients listed as getting ICU inpatient care when they actually were left in an ER hallway.
• Allegations that Tenet illegally “dumped uninsured patients” on a non-profit hospital.
• Tenet Executives Got Paid >$200 million – meanwhile Tenet Hospitals got an avg D+ safety rating.
• The consultants behind the consultants – Why would ex-McKinsey execs who run Tenet hire a lesser-known consulting firm to maximize reimbursement?
  • We think we uncovered why – those lesser consultants were accused of being the “original masterminds” behind “fraudulent schemes” to “defraud the federal government of Medicaid funds.”
  • A former reimbursement executive at Tenet said the consultants “made [Tenet] so much money” and was “so on top of scrubbing the data for us”
• We believe Tenet could be the next United Healthcare –50% after a Medicare fraud probe.
• Medicaid is on the chopping block, and Tenet could feel the impact.
  • Recent White House memo on is the canary in the coal mine for Medicaid – the admin is hunting down all waste, fraud and abuse of Medicaid. We think their focus on fraud will devastate Tenet’s P&L and Balance Sheet.
• Tenet has a history of paying major fines with a rap sheet spanning >20 years and >$2.5bn worth of fines.
  • We analyzed >50 qui tam lawsuits, and found that Tenet has repeatedly settled cases that alleged Medicare and Medicaid fraud and kickbacks.
  • Formers told us Tenet’s corporate Ethos is still “bend the rules and pay the fines later”

The most shocking thing was that every time we spoke to a former Tenet employee, they described a different maximization strategy. Each region and each Tenet hospital was gaming the system to maximize government reimbursement in a different way. We also had multiple formers who told us to be careful, to stop digging, and twice we were even told to just “let sleeping dogs lie.”

Those who cannot remember the past are condemned to repeat it … and get stuck paying a large fine.

• So … is Tenet the next United Healthcare (UNH) -50%? 
• Or is it the next Valeant (-95%)? 
• Or is Tenet really just the next Tenet (fell >70% post 2002)? 

Sell-side analysts tell investors that “This is Not Your Father’s Tenet.” They are wrong. The data doesn’t lie. This IS your father’s Tenet, and they are up to the same tricks. 

Tenet will get caught. Tenet will pay the same large fines. 

Fuzzy Panda Research is Short Tenet Healthcare (THC)

Fuzzy Panda Research and Fuzzy Panda “Affiliates” are short securities of Tenet Healthcare (THC).  Please see additional disclosures at the end of report and in our terms of service.

We are eager to hear more! Former employees or whistleblowers who wish to speak with us anonymously should reach out to us at [email protected].  

We have kept sources anonymous throughout the report but can share them (provided they have approved us to do so) with reputable journalists, state AG’s, the SEC, DOJ, and other government regulators. We will be actively reaching out and providing all this information to CMS, regulators, and other government agencies.

Part I – History of Fraud Allegations & Fines – Short Tenet Healthcare 

Tenet’s Forgotten History of “Major Fraud” & Billions in Fines Paid 

• Current Corporate Ethos = Bend the Rules & Pay the Fines Later

Sell-side is running around telling investors that it’s “Not Your Father’s Tenet.” Through our extensive interviews of former Tenet employees, we uncovered that Tenet’s game is the same, but they just have gotten better at hiding it. In fact, recent formers told us that Tenet still has a corporate ethos of being willing to bend the rules and pay large fines later.

Tenet has “far less concern about doing it right and far more comfort with paying fines”

~Former Tenet Operations Executive

Tenet Healthcare, formerly known as National Medical Enterprises, was described by a 2017 TV exposé as having “an extensive corporate rap sheet” and being “absolutely no stranger to major fraud.” 

When we asked former Tenet executives about the role that strong ethics plays when hiring, we were told:

“Q – What kind of ethical compass did [Tenet] want in people?

“Ethics never came up …”

~ Former Tenet Recruiting Executive

Any investors who have lived through more than one financial crisis should be well aware of Tenet’s checkered history. But, in case you have forgotten, here are some of the major ones:

$900 Million – Alleged Medicare Unlawful Billing – Upcoding, Kickbacks & Excess Outlier Payments:

Tenet’s big Medicare overbilling scandal for outlier payments first broke in 2002. It caused the stock to plunge 70% within weeks and led to a $900 million settlement in 2006. Tenet had been exploiting a flaw in Medicare’s outlier payment formula, which relies on a cost-to-charge ratio (“CCR”). Tenet paid a major fine after their hospitals were caught artificially inflating their charges to secure excess outlier payments from Medicare.

Is Fuzzy Panda Research foreshadowing what we believe we caught Tenet doing??? YES!

$395 Million – Unnecessary Cardiac Surgeries: 

Tenet Healthcare was called the “Hospital of Horrors” in an exposé detailing the events that lead to a $395 million settlement to resolve serious allegations of fraud in 2004. Tenet doctors were allegedly performing unnecessary heart surgeries on healthy patients for years to boost Tenet’s profits. 

The questionable surgeries were exposed after FBI agents raided a Tenet facility in October 2002. 

$514 Million – Kickback Allegations for Referral Payments for Undocumented Immigrants’ Infants:

The 2016 settlement involved Tenet hospitals paying referral fees to get a local clinic to direct undocumented immigrants to give birth at Tenet hospitals in Georgia. Tenet wanted these babies born at THC hospitals due to the large Medicaid and Georgia state supplemental payments. This occurs because, although the parents are undocumented immigrants, a child born on U.S. soil becomes a U.S. citizen and entitled to Medicaid coverage. The newborns were especially profitable to Tenet Hospitals because they were more likely to experience complications and require extended stays in the NICU, resulting in Tenet and HMA receiving higher Medicaid and state payments. (Case No: 3:09-cv-00130-CDL – USA v HMA and Tenet Healthcare Corp)

Is there any way Tenet would do this again? Former THC employees told Fuzzy Panda, YES!

>$2.5 Billion in Fines Paid – Major Fine Every ~10 years
… And It’s Been 9 Years Since Tenet’s Last Big One 

These are just a small sampling of the largest fines paid, but the totals are astounding. Tenet has paid >$2.5 billion and paid a massive fine about every 10 years. The last huge fine just happens to have occurred ~ 10 years ago.

PART II – Excessive Medicare Outliers Again? – Short Tenet Healthcare 

CMS Data Indicates Tenet Gamed Medicare to Reap Excess Outlier Payments … Again!?!

• Data Analysis Shows Tenet is the Outlier in the Amount of Outlier Payments They Received. 
• Medicare Fine Estimated at $675-$845 million.
• Tenet Received Est Excess Outlier Payments of >$150 million.

Hospitals get what are known as “outlier payments” for treating patients who cost more than Medicare’s standard reimbursements rates. If you remember your history lesson above, you will recall that in 2006 Tenet paid a >$900 million fine for fraudulent outlier payments. 

We spent months pouring over public CMS data and analyzed >20,000 documents. It was incredibly boring but highly revealing. Through the data we uncovered that from 2013-2023 Tenet likely received >$150 million of excess outlier payments. 

Fines for alleged Medicare fraud are multiplied. There is a very simple formula. If our estimates are confirmed by CMS, the formula indicates that Tenet’s estimated fine would be $675-845 Million.

We spoke to multiple hospital CEOs and CFOs who were not Tenet executives and had them analyze the same data. The experts reached the same conclusion we did: 

• “In the early 2000’s … they got caught for doing outliers. It’s almost like they’re trying to do it again” ~ Hospital CFO A 
• “[Tenet] are probably manipulating it [charges] … and getting incremental payment” ~Hospital CFO B 
• Tenet “can get away with it for a while, but you will get audited” ~Former CEO of Multiple Hospitals 
• “You lose those outlier payments; it goes straight to the bottom line … it’s pure margin” ~ Former Hospital CEO

Experts told us that similar sized hospitals in the same region should have roughly similar percentages of outlier payments. They said if one hospital is getting a lot more outlier payments than others, then it is likely that they are overbilling Medicare. The experts told us to compare Tenet hospitals to ones in the same region with similar characteristics.

If you want to replicate our analysis, then the painful details are available in section “Appendix BCDE – ‘Boring CMS Data Exposes’ Potential Excess Outlier Payments?” Honestly, it’s the type of analysis that we imagine only a municipal bond lawyer and insurance actuary would enjoy discussing on a date at the DMV over a 0% ABV beer. Long story short: we sliced the data every which way, but it consistently told a similar story: Tenet received more outlier cash – that is, taxpayer dollars – than it likely should have. 

Outlier payments drop directly to Tenet’s bottom line. Hospital executives told us to think of outlier payments as having a 100% contribution margin.

Our estimates (which we think are conservative*) come out to Tenet receiving excess outlier payments of ~$168 million.

Est Excess Outliers Paid to Tenet of >167 Million!

Back in 2006, as part of their first large outlier payment settlement of $900 million, Tenet signed a 5-year Corporate Integrity Agreement with the OIG. This agreement required an independent review of DRG claims, quality management, and outlier payments. We decided to analyze the data from 2013-2023 (the most recent year available) since we hypothesized that once the Corporate Integrity Agreement and reviews by independent third parties stopped, Tenet would be free to start it up again. Our analysis shows just that. Tenet appears to have reopened its outlier bag of profit maximizing tricks from Medicare in 2013, hitting full stride in 2016.

*Conservative Estimates – We believe our estimates are conservative because we excluded academic medical centers, level 1 trauma centers, etc which have abnormally high outlier %’s from the dataset. This excluded 9 THC hospitals from our analysis. Additionally, we excluded the 34 hospitals that Tenet divested during this time period. We believe that including all of these additional THC hospitals would likely lead to higher estimated excess outlier payments received and thus to higher fines as well. 

Potential Fines of $675-$845 million – Fines Are Significantly Higher than Alleged Excess Money Taken:

This is how Medicare fines are calculated. It’s simple. 

The formula is 3x the total government damages + a Minimum of ~$14,000 to Maximum of $28,000 per fraudulent claim. 

Based on the excess outlier payments we estimate Tenet received from 2013-2023, the company could face a fine imposed by Medicare of $675 to $845 million.

Analyzing all this data was indeed as boring as it sounds. We hope you enjoy spending your nights and weekends on a date with the CMS data … because we sure didn’t. 

PART III – More Cost Report Data – Short Tenet Healthcare

Government Data Reveals Tenet’s Medicare/Medicaid Gaming Strategy – Ritz Carlton Costs for Motel 6 Care

• Tenet Appears to Be Allocating Corporate Overhead to Neglected Hospitals
• Tenet’s Bad Report Cards – Hospitals Average “D+” in national safety grades, 1.9 Stars from Medicare
• Case Study – How High Are THC’s Indirect Costs?

How can a hospital report the same costs for care as peers when it is physically falling apart? Is it the nurses reporting facilities that are full of rats, have leaking ceilings, and no hot water. Or the doctors openly complaining about the hospital’s being understaffed?.

Hint: They shouldn’t! Costs should be lower. But Tenet and their brilliant McKinsey minds appear to have found a loophole. They appear to be allocating their corporate overhead (the private jet? more on that later) by reporting higher costs while underinvesting in hospitals. Reimbursement experts told us Tenet is able to push those indirect costs onto the government. CFOs who reviewed the data told us that there is “something going on that’s inflating the indirect costs.”

“Let’s get to brass tacks here. They’re manipulating costs … to extract more revenue.” 

~ Hospital CFO B

“It all factors into those base rates, which also impacts their Medicare Advantage, too, because their Medicare Advantage is looking to see what their base rates are with Medicare… The cost report is hospital-specific, and the base rate that Medicare determines is specific to that cost report for that hospital. The higher the cost that you can show, particularly related to Medicare patients, the higher your base rate will be.”

~ Healthcare Reimbursement Expert 

We reviewed CMS quality scores, lawsuits, and inspection reports for every Tenet facility. The pattern we saw was consistent: their facilities are understaffed and underinvested in. Yet, Tenet hospitals report high costs that match — or even exceed— peers known for investing in staffing, infrastructure, and quality healthcare. And Tenet does it knowing Medicare probably won’t notice, a former executive told us. You can find it if you know where to look – and you can figure out the game.

They report higher costs for neglected facilities and then appear to allocate central, “indirect” corporate costs to hospitals that have lower-than-normal overall cost/care ratios. 

Tenet Hospitals Get the D(+) – Patients’ Care Gets F–’ed

We found countless complaints of unsafe nurse-to-patient ratios, long ER wait times, broken equipment and filthy conditions at Tenet’s hospitals. Don’t take our word for it:

• Medicare gave Tenet hospitals an average rating of just over 1.9 stars out of 5 stars.
• Tenet’s average grade in the Leapfrog Group’s national Hospital Safety Grades: D+.
  • Tenet owns 6 of the 19 hospitals that received Fs. 
  • Tenet hospitals were 12x more likely to receive a F than their peers. 

When was the last time anyone with a D+ average was hired at McKinsey?

Tenet’s Excessive “Indirect Costs”

Our exhaustive review of CMS cost reports unveiled troubling irregularities in Tenet’s reported costs. These costs may boost its reimbursement from all payors significantly. Across its entire system, Tenet has bloated “indirect costs” (overhead and other expenses). This is especially true in revenue-driving departments which are key for gaming the system. For example, our analysis showed Tenet consistently reports cost per patient day for Medical Records that are 5x to 10x higher than peers.

“There are some things that have the ability to wiggle, and medical records is one of them, because they can’t prove really that you overstated that”

~ Healthcare Reimbursement Expert

The bloated indirect costs cut across revenue-driving departments, like General Routine Care, Radiology, and Drugs Charged to Patients. For example, from 2018-2023, indirect costs are way higher than peers in categories:

• For Drugs Charged to Patients, indirect costs are 97% higher than peers in Texas;
• For Cardiology, the indirect costs are 70% higher than peers in California;
• For Medical Supplies, indirect costs are 60% higher than peers in Florida.

There are countless examples, but we think the simplest way to explain how Tenet appears to play the Cost Allocation Game comes with a clean “Before & After” photo. 

Case Study: Hi-Desert Medical Center’s Costs – Reasonable Before Tenet; High on THC After

Tenet’s Hi-Desert Medical Center (HDMC) is a short-term acute hospital based in Joshua Tree, California. Tenet took over management of the hospital in 2015. It’s the key to explaining how Tenet reports higher costs than peers to almost certainly game reimbursement.

We compared HDMC’s total costs, its indirect costs and direct costs, to the medians of the 22 peers within its CBSA (40140) in each department on a per patient day basis over a decade (2013-2023). The hospital went from having below average costs (which matches the complaints of a worn-down facility) to having >60% higher costs. 

Direct costs at HDMC grew at a steady clip of 3.1% vs peers at 2.2% since 2015 (when Tenet took over), but it was the indirect costs that really took off once Tenet assumed the operations. Indirect costs for HDMC grew at +12.2% per year vs peers at 1.0%.

HDMC Indirect Costs Consistently >150% Higher than Peers in Key Departments:

We talked to >10 Hospital CFOs and Reimbursement Experts and had them look at the indirect cost allocation data for all Tenet hospitals. All of them thought something didn’t add up and they consistently concluded that indirect costs were being inflated across the system. 

We were told:

• “From what I’m hearing, from years of experience, there’s something going on that’s inflating the indirect cost that they’re pushing. I’ve never seen a department or any hospital where indirect costs are higher than direct costs.” – Hospital CFO B
• “Maybe they know something nobody else does… maybe they’re putting costs in there that shouldn’t be in there, that shouldn’t be allocated. And it’s an inappropriate thing. That’s a possibility. ~Hospital Finance Executive 
• “They’re pushing costs into these departments somehow, like administrative general, you would think that when it gets said and done with, why is your overhead costs so much more than your peers? That’s what I don’t get… But their indirect costs being higher, that concerns me more than anything.” ~ Hospital CFO A 

PART IV – Other Reimbursement Issues – Short Tenet Healthcare 

Other Government Fines & Alleged Reimbursement Manipulation Tactics 

• Milking Medicaid with “Million-Dollar Babies” 
• Upcoding Fraud – Government Charged For ICU Care While Patients Receive Hallway Treatment
• Allegations of Illegal ‘Patient Dumping’ From Competition

Speaking with former employees and hospital executives about Tenet was an experience like none we have ever had. Every time you asked a different region about one type of fraud, they would tell us about another one that was worse. We would ask about abusing outlier payments and instead executives would tell us how profits were juiced by recruiting undocumented pregnant immigrants to have their babies at Tenet hospitals and at Medicaid’s expense. 

There was a pattern. The method was different at each hospital, but the game was the same: push your Medicare and Medicaid revenue to the max and with little to no regard for the consequences of getting caught. 

Below are some of the most egregious examples we have uncovered so far. 

“Million-Dollar Babies” – Tenet Chased Undocumented Immigrant Moms to Get Big Medicaid Paydays 

• Executive Called Them “Million-Dollar Babies” 
• Active Birth Tourism Websites Are Still Driving Patients to Hospitals
• Used Undocumented Immigrant Moms to Commit Medicaid Fraud Before & Paid a $514 Million Fine

Tenet was caught paying for referrals to get undocumented immigrant moms to give birth in their hospitals in 2016. That was in Georgia. Our interviews with former THC executives who worked at Tenet hospitals after those huge fines told us that they uncovered the practice occurring in Texas too! It was occurring again well after the date of the Georgia settlement. 

Even today, we still found recruitment services advertising “birth tourism” for Hispanic immigrants and directing them to Tenet-owned hospitals. 

Did Tenet not learn? Or did they just not care? 

Dr. Oz has specifically called out that he wants Medicaid to stop “bankrolling benefits for non-citizens.”

“This proposed rule stops the shell game and ensures federal Medicaid dollars go where they’re needed most…not to plug state budget holes or bankroll benefits for noncitizens.” 

~ Dr. Mehmet Oz – Head Administrator for CMS 

Undocumented Immigrants “Million-Dollar Babies” Boosted Profitability of Tenet’s Hospitals by “Tens of Millions”

A former C-Level executive at Texas Tenet hospitals told us that during their tenure they uncovered that third parties directed undocumented immigrant mothers in Texas to give birth at Tenet hospitals. They told us that Tenet executives referred to these undocumented immigrant anchor babies as “Million-Dollar Babies.”

They said these babies “generated tens and tens of millions of dollars in additional reimbursement for hospitals.”

“What was so attractive at the time was these moms would cross over the border [having] no prenatal care whatsoever…so a lot of times those babies were sick…so the mother might be discharged but the baby was admitted into NICU (neonatal intensive care unit). We called those million-dollar babies.” 

~ Former C-Level Executive at Texas Tenet Hospital(s)

The babies of the undocumented immigrants were valuable to Tenet because, by being born in the U.S., those babies suddenly became US citizens eligible for Medicaid, even though their parents were not citizens. The immigrants’ babies were often sick and had long stays in the NICU…all paid for by Medicaid.

Current “Birth Tourism” Services Uncovered – No Surprise, They Are Connected to a Tenet Hospital

One of Tenet’s current El Paso, Texas hospitals, Providence-Sierra Medical Center, is listed as a key hospital utilized by an anchor baby referral service called Doctores Para Ti, which describes itself as specializing in maternity services for “international patients interested in birth tourism.” 

The company even provides guides in its FAQ’s on how to speak to immigration officers and get a US passport for a new baby.

Doctores Para Ti’s website and recent consumer reviews confirm that the company is still actively bringing patients to a Tenet hospital for “birth tourism.” After calling 10+ times we were able to speak with the listed owner of Doctores Para Ti, who also runs a jujitsu t-shirt/rash guard (not clear if he sells infant sizes) and is connected to a tattoo parlor. County court documents happen to show the company’s El Paso DBA is inactive, but the owner, who we are not naming, confirmed Doctores Para Ti is still actively operating and is still currently bringing international pregnant mothers and directing them to Tenet’s Providence-Sierra Medical Center.

The owner claimed that 100% of his business comes from people on legit visas, yet also claimed to have seen no impact from the Trump admin’s immigration policies. Those statements are hard to square with the current environment (that’s our nice way of saying he lied). 

When asked about the babies getting U.S. citizenship, the owner described that as “a perk.”

When questions got tough, he claimed that he “does not have the privilege to provide more information.” Yet Doctores Para Ti is a sole proprietorship – and he is the sole proprietor of the company

“Bebé en USA” = Another Service Guiding Birth Tourists to a Tenet Hospital

“The maternity ward is considered the cash cow. It used to be considered the place where they’d lose money. Now it brings in money for other departments,” The Atlantic Article – The Midwives of El Paso

Tenet Did It Before! Caught For Paying Illegal Referral Fees for Undocumented Immigrant Babies in 2016: Paid a $514 Million Fine

In Atlanta in 2016, Tenet paid $514 million for paying illegal kickbacks to a prenatal clinic to refer pregnant undocumented Hispanic women to Tenet hospitals to deliver their babies at Medicaid’s expense. The clinic’s actual slogan was “we care about your health, not your immigration status.”

It’s illegal because it’s a violation of the Federal Anti-Kickback Statute to “pay remuneration for arranging for care under federally funded healthcare programs”

Other Alleged “Fraudulent Billing Practices:” Billing for ICU Care While Patients Left in ER Hallways — Isn’t this Illegal Upcoding?

“They [Tenet] were upcoding the ER… Tenet-owned physicians were doing office-visit upcoding 

~ Healthcare Reimbursement Expert

Three doctors became whistleblowers when they recently exposed in a lawsuit¹ that Tenet’s hospitals have been engaging in “fraudulent billing.” Tenet was accused of billing Medicaid and Medicare for patients as ICU inpatients when the reality was that patients were lying on gurneys in ER hallways sometimes for weeks. This is the definition of upcoding, and the doctors stated that “these fraudulent practices exist throughout DMC’s acute care hospitals.” 

One patient died in the ER hallway and no one noticed for hours. Tenet kept billing for inpatient care, even for hours they lay deceased and undiscovered.

According to the doctors, these were not one-offs. It was not uncommon for there to be as many as 90 patients being boarded despite only 60 beds. 

Is Tenet Illegally Dumping Uninsured Patients on Non-Profit Hospitals Too?

“Tenet would dump patients … some of the patients were extremely sick”

~ Texas Non-Proft Hospital Executive

According to a hospital executive, a Tenet hospital would “dump” sick, uninsured patients on a nearby non-profit hospital to avoid getting stuck with money-losing patients. 

The executive said the dumping of patients was an open secret. Doctors knew it and nurses who did shifts at both hospitals talked about it. 

“One of the issues we had with Tenet was that Tenet would kind of redirect a lot of the patients that were uninsured to our hospital … You’re not allowed to dump patients like that…it’s called patient dumping and it’s not legal” 

~ Texas Non-Profit Hospital Executive

PART V – PJs & Fat Paychecks – Short Tenet Healthcare

Management XS – Medicaid & Medicare Reimbursed for Tenet’s Private Jet, Says Former Employees

• Private Jet Trips at The Government’s Expense
• Five Top Execs Took Home >$200 million since 2021

Why spend 90 minutes driving from San Jose to Modesto when you can fly? Tenet executives seem to agree that it makes a whole lot of sense to take the ~$35 million corporate jet instead of driving for ~60 miles. This decision becomes even easier once you learn that management has been charging those private jet flights to taxpayers, courtesy of Medicare and Medicaid. 

A former Tenet reimbursement executive told us the private jet flights were charged to the government. They said the home office cost report was not even audited or challenged. 

“They [Medicare] weren’t even auditing that home office cost report.”

~ Former Tenet Reimbursement Executive

Q – Can companies actually charge the government for private jets?
 
“Technically, If no one’s catching it. Yeah, definitely. Definitely. I mean, that’s one thing, is there’s a lot of costs being pushed down that probably shouldn’t be from corporate…but there’s a lot of costs for corporate and everything else that I would think should not be…I think that that’s very easily say that. Yes. You could do that. Yes”

~ Hospital CFO A

Executives at Tenet have seem to have taken flying private to the next level as they appear to regularly use the company’s 2019 Dassault Falcon 2000LXS for short hops around the San Francisco Bay area and Los Angeles.

The private jet is owned by a Tenet subsidiary, “Wilshire Rental Corp.” You can even find it yourself! Just search on the FAA’s website using the N-code “71949.”

The PJ market isn’t known for transparent pricing. But the make and model of Tenet’s ride reportedly goes for upwards of $35 million. 

Why Drive 90 Minutes When You Can Fly in a Private Jet? 

We tracked the Tenet owned private jet (N-71949) and we uncovered some pretty egregious patterns of usage. Including flights from San Jose (where CEO Saum lives) to neighboring cities with Tenet owned hospitals like Modesto, CA.

• San Jose, CA to Modesto, CA 8:51am and back to San Jose at 3pm pst.

Why drive a 90 min commute when you can fly?

We saw this pattern continue with other easy to reach destinations:  

• San Jose to Sacramento & back; 
• San Jose to Fresno & back; 
• Orange County (Irvine) to … drumroll … wait for it, Los Angeles! (Irvine to LA-Van Nuys)
• There is even another 15 min PJ jaunt across LA from Ontario, CA to Burbank (Ontario-Van Nuys). We hope to god that flight is just a pilot repositioning the plane otherwise someone needs to desperately inform THC management about the existence of LA Highways 210 or 10. 

For our East Coast readers, this would be the equivalent of being based in New York City and firing up the company PJ to fly to Princeton, NJ or Philadelphia, PA. 

Tenet Executives Got Paid >$200 million in Last 5 Years While Patient Care Suffers

Since 2021, Saum Sutaria, CEO, has made $138 million in total compensation. The executives right under Saum didn’t do too bad themselves. Thomas Arnst CAO made $26.8 million while Lisa Foo, the EVP of Commercial Operations and Saum’s fellow McKinsey alumni, made $13.4 million.

Tenet Buys Back Shares While Insiders Sell Theirs

Tenet initiated a $1 billion share repurchase program in October 2022 and then authorized a new $1.5 billion repurchase in July 2024. All told, Tenet has repurchased >$1.3 billion and has $1 billion remaining. 

At first glance, this sounds like great news for shareholders — until you realize that while the company has been buying back shares, insiders have been selling shares hand over fist. Since the initiation of the buyback, executives and directors have sold >$80 million in stock. 

• Saum Sutaria, CEO, has sold $43.2 million.
• Thomas Arnst, CAO & GC, sold $9.7 million. 100% of shares.
• Another director, James Bierman, hadn’t sold a share before this year. He’s now sold $3.3 million worth.

PART VI – The Consultants – Short Tenet Healthcare

McKinsey Alums + Reimbursement Consultants = Tenet Investors Beware

• Investors Should Beware of “The Smartest Guys (& Gals) in the Room” in Healthcare
• The McKinsey Alums Who Run Tenet Hired Reimbursement Consultants to Maximize Revenue
• Consultants Hiring Consultants – Plausible Deniability or the “Masterminds” behind Tenet’s “Fraudulent Schemes?”

Tenet leadership was taken over by a team of former McKinsey consultants back in 2019, and ex executives and employees repeatedly described the culture they instilled at the healthcare provider as McKinseyesque.

We have a lot of respect for McKinsey alums. They are smart. In fact, some are known as “The Smartest Guys In The Room.” Enron’s notorious CEO, Jeffrey Skilling, was standout at McKinsey becoming one of the youngest partners in McKinsey history. These days Skilling is better known for being one of the criminally convicted masterminds of Enron’s fraudulent accounting.

A former McKinsey partner that was previously lauded as one of the best healthcare CEOs was Mike Pearson. Mike Pearson was the CEO and brains behind Valeant Pharmaceuticals, one of the largest healthcare implosions ever. Valeant pushed price gouging the healthcare system to the extreme and its stock fell 96% when the scheme imploded.

Our issue isn’t with the “McKinsey Method.” We think McKinsey’s core strategy works well when applied to most industries. But it can be downright dangerous when applied to healthcare where there’s a very fine line between cutting costs and cutting years off patient lives. 

*“McKinsey Method” – Note our description of the McKinsey Method/The McKinsey Way is purely satire. For a serious description here is academic paper, for a funny one here is John Oliver’s McKinsey Commercial. 

The Outside Consultants – The “Original Masterminds of Massive Scheme” to “Defraud Medicaid” 

When McKinsey consultants hire anyone other than McKinsey consultants, investors should raise an eyebrow or, better yet, a red flag. Why would McKinsey, the best and brightest consultants, hire another consulting firm? Can the smartest consultants not figure out the solution to a problem? 

Or…

Is there another reason, like deferring the culpability for decisions onto another firm? 

Through conversations with experts and formers, we uncovered that Tenet regularly utilized healthcare consulting firm Gjerset & Lorenz. The formers told us Gjerset & Lorenz were experts at maximizing hospitals reimbursement from all available sources.

“[Gjerset & Lorenz] made a big difference in our reimbursement. They made us so much money…they were so on top of scrubbing the data for us.”

~ Former Tenet Reimbursement Executive

When put in context of a recent accusation against Gjerset & Lorenz being “the original masterminds” behind “fraudulent schemes” to “defraud the federal government of Medicaid funds,” this positive statement starts to raise a lot of questions. The complaint alleges that, under the direction of Gjerset & Lorenz, hospitals “created a web of pass-through entities in order to hide the money trail of improper” donations. 

PART VII – ‘Big Beautiful’ Medicaid Cuts – Short Tenet Healthcare 

Welcome to the World of Medicare Audits + Medicaid Cuts – Current Politics Underwrite Shorting Tenet

• CMS Chief Dr. Oz: >$14 billion in Fraud Already Found
• Medicaid Cuts Could Cost Tenet ~$143 million a year
• Tenet has Been Warned: Medicare Plans ~11x More Audits 

“If they take all the fraud and waste out of the Medicaid program, it’s going to impact Tenet… that’s a bigger risk to me than what’s going on in the cost report right now…The magnitude of [the Medicaid cut] is huge. We could get hit … almost 10%”

~ Former Tenet Reimbursement Executive

Valeant unraveled when the government made price gouging drugs a focus of the administration. A tweet by Hilary Clinton was the canary in the coal mine. 

Former Tenet employees in charge of reimbursement and cost allocation told us that any government investigations into fraud and abuse in Medicaid will have a huge impact on the company. The canary for Tenet is glaringly obvious this time around: a presidential memo declaring the government’s focus on fighting and eliminating waste, fraud, and abuse in Medicaid. 

Not only is fraud and abuse in Medicaid declared public enemy No. 1, but government funding for Medicaid is also directly on the chopping block. The White House is considering an executive order that would cut into Medicaid payments to states, and President Trump’s “Big Beautiful Bill” includes deep cuts, too. One healthcare executive told us that under the proposals currently being considered, Tenet could lose 10% of its Medicaid reimbursements – or ~$143 million based on 2024 revenues.

Medicare is safe. It’s bad politics to cut healthcare for grandma and grandpa. But CMS is on the hunt for fraud and planning to audit ~11x more contracts a year – up to 550 from 60. This is no time for Tenet to be playing with claims or getting cute with numbers. The pressure is real — and it could cost Tenet. Medicare accounted for $2.1 billion, or 15.3%, of Tenet’s hospital revenue last year. 

“We’ve got to clean up the system – we’re not paying $200 million a year for housekeeping anymore; we’re not going to pay for illegal immigrants”

 ~ CMS Administrator Dr. Mehmet Oz to Fox News (4:55 mark)

Yes, there’s been a lot of Republican promises to not cut healthcare. There is no way to make Trump’s “Big, Beautiful Bill” work without Medicaid cuts. 

PART VIII – The United Warning Shot – Short Tenet Healthcare 

We Believe Tenet is the Next United Healthcare – Medicare Fraud Probe Sent Stock Down 50%

• UnitedHealth is Facing Criminal, Civil & Anti-Trust Probes for Alleged Upcoding
• Market Cap Off >$300 billion from its Peak

Healthcare CEOs are finding out a tough lesson. Don’t f—k with Dr. Oz and Donald Trump or your stock price and illicit profits are going to get Trump’d.

The Justice Department is investigating whether UnitedHealth manipulated medical coding to jack up risk scores and, in turn, federal payments. In plain English: The feds believe UnitedHealth made patients look sicker on paper than they were in real life, then hit the bank with all those ill-gotten Medicare bucks.

Meanwhile, CMS says it’s moving from auditing 60 contracts per year to all 550. If the probe sticks, it could retroactively nuke years of profits and force a major business model reset for UnitedHealth.

Sure, UnitedHealth, an insurer, and Tenet, a provider, fill different niches in the healthcare business. But both earn a lot from government-paid healthcare, and federal officials are in a fighting mood and looking to crack down. Tenet investors beware.

PART IX – Another Tenet Question Mark – Short Tenet Healthcare 

USPI – The Growth Story Appears Riddled with the Same Holes 

We’ve been busy on the hospital side, living in CMS and California HCAI data sets — but don’t worry, if we do an analysis on United Surgical Partners International (USPI) and Tenet’s Ambulatory Surgical side, we will release it.

What are the chances that the same Medicare and Medicaid issues exist in Tenet’s growth story? The track record suggests they are:

• 2024 – Tenet paid $12.7 million to settle claims that a USPI facility was paying illegal referral fees to physicians in South Dakota, in the form of traditional compensation and subsidized rent.
• 2021 – Tenet paid $66 million to settle allegations that a USPI surgery facility engaged in kickbacks, unlawful compensation and unearned reimbursements in Oklahoma.  
• Former USPI CFO, Jason Cagle, was fired after blowing the whistle on Tenet for allegedly not disclosing USPI’s equity compensation plan in its financial statements. 
• Better Business Bureau reviews highlight instances of unethical billing and upcoding. 

Bullish investors like to focus on the growth that is happening at USPI. We think they forget two important things: >75% of the revenue still comes from the hospitals, and, more importantly, Tenet’s ethos of “bend the rules and pay the fines later” seems to be alive and well at USPI too.

PART X – Tenet Already Under Investigation – Short Tenet Healthcare 

Tenet is Facing an Ongoing & Undisclosed SEC Investigation

We sent in FOIA’s regarding Tenet Healthcare to the SEC for any documents regarding SEC investigations or Wells Notices and our FOIA appeal received notice that there are documents that respond to our request that the SEC would not send us due to a 7A) Exemption. The 7A) exemption is reserved for protecting the disclosure of documents regarding an active and on-going SEC investigation. Our FOIA appeal notes that the SEC “confirmed with enforcement staff” that releasing the records would be expected to “cause harm to on-going and active enforcement proceedings” into Tenet Healthcare.

Note: We do not know what the SEC Enforcement staff is investigating … but we doubt it is for something positive.

Conclusion – Short Tenet Healthcare

Conclusion – Now is the Time to Short THC 

We believe shorting Tenet Healthcare now, before a potential government investigation is announced, is an unprecedented opportunity. The stock is trading near its 20-year high, and the risk of another major fraud case and government fine is not priced in. 

Interviews with former employees and experts and our extensive analysis of CMS data indicated that Tenet is up their same old tricks. At the same time, the Trump administration has made it clear that it plans to go after healthcare companies suspected of committed fraud or abusing Medicare and Medicaid. 

We believe that egregious abuses by Tenet (like expensing your private jet to CMS or using undocumented immigrants as a profit center) are going to prompt a Trump administration crack down. We think the government will begin reviewing all of Tenet’s suspect charges, questioning its excess outlier payments and combing through Tenet hospitals’ suspiciously high allocated costs.

The results could devastate Tenet’s P&L. All the high-margin reimbursement games that Tenet executives have been playing could be lost at once. 

Tenet has only gotten away with it because the McKinsey executives in charge played the games in a really smart way. They avoided mandatory reviews and played different revenue and reimbursement maximizing games in different places. 

But THC management has to be high to think they’re going to get away with this indefinitely. Tenet’s long history includes having to pay at least one large Medicare/Medicaid fraud settlement every 10 years. It’s like clockwork – and we are in the 10^th year.

We think the opportunity to short Tenet today, near it’s all-time peak stock price, is like getting to go back in time so you can short Valeant Pharmaceuticals when the government announced they were going to crack down on price gouging drugs. 

We are Short Tenet Healthcare … The ‘Notorious’ $THC

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Appendix BCDE – The ‘Boring CMS Data Exposes’ Potential Excess Outlier Payments

We believe Tenet is earning excessive government payments every year by abusing what are known as Medicare outlier payments. Months of analysis regarding thousands of CMS documents convinced us that Tenet likely earned excessive outlier payments of ~$168 million from 2013-2023.

It’s important to note that government fines multiple when caught. If the government also calculated Tenet’s excess outliers to be ~$168 million, that would actually equate to $675-$845 million of fines. 

We believe Tenet has been qualifying for extra outlier payments by artificially growing their reported charges faster than the reported costs. Experts told us that gaming charges and costs would trigger outsized and un-earned paydays from the federal government, according to our analysis of CMS data.

Shockingly, this situation is similar to the 2002 fraud scandal that sent Tenet’s stock plunging >70% and resulted in a $900 million fine.

What is a Medicare “outlier payment” and why do they exist? 

Outlier payments are extra payments from Medicare which were designed to protect hospitals from incurring losses when treating patients with exceptionally high costs. Medicare always reimburses hospitals fixed, predetermined amounts, so hospitals were disincentivized to treat high-cost patients. The outlier system was created so hospitals don’t lose lots of money treating patients with extraordinary circumstances.

A How to Guide for Calculating Outliers at Home– Mo’ Math, Mo’ Problems for Tenet

Here are the steps for you to calculate potential excess outlier payments for Tenet or any other hospital system.

Step 1 – Calculating Outlier Payment % for a hospital (for Tenet use list in 10-K or here)

• Download outlier payments for the hospital from CMS Worksheet E Part A.
  • You can get the actual outlier data for each hospital via paid services (HFS HCRIS Database & CostReportData.com) or from CMS directly here. File “Hospital-2010” is what you need. There are also free CMS impact files (FY 2024 data, column “outfact_f”) 
  • Note – Experts told us that the impact files were only estimates and often don’t get updated for years or until after audits, so we highly suggest you pay up and utilize the actual data. This same analysis can be performed by purchasing Standard Analytical Files from CMS.
• Download total Medicare reimbursement data for each hospital from CMS Worksheet E-1
  • The data is available in the zip downloaded from CMS file “Hospital-2010”
  • If you’re an academic or at a research organization, you can access this via NBER
• Divide “total outlier payments” / “total Medicare reimbursement” = outlier % for that hospital.

Congrats you did step 1! 

Step 2 – Define a comp set for the 1^st hospital & Repeat Step 1 for each hospital in comp set 

• Define a comp set for that hospital.
  • We suggest using CMS CBSAs as a starting place. 
  • Experts guided us to use hospitals in the same geographic region, of a similar size, and that are similar type of hospital. 
  • Make sure to research each hospital in your comp set to ensure it’s a good comp.
    • Note – Be careful to avoid including inappropriate types of hospitals in your comps (E.g. A Tenet community hospital should NOT be compared against an Academic Medical Center, Level 1 trauma center, a long-term acute care facility, etc, etc)
• Calculate Step 1 for each and every one of the comparable hospitals you defined (Usually >20-30).
• Then, calculate the outlier payment % for your entire comp group.
  • Time to dust off that old high school AP Statistics book if you don’t know whether to use a median, average, or maybe even a weighted average (hooray, stats!).
  • Note – Experts told us that similar sized hospitals in the same region should have roughly similar percentages of outlier payments.
• Calculate the difference – hospitals you are analyzing’s outlier % vs the comps outlier %

Congrats you just calculated the outlier payment % for >20-30 hospitals and finished Step 2! The good news is you now have an estimate of % excess outlier payments for 1 hospital. The bad news is you have only finished 1 hospital and in 1 Fiscal Year. 

1 down and >50 Steps 1 & 2 to go for the rest of Tenet hospitals! 

Step 3 – Repeat Steps 1 & 2 for all remaining hospitals you want to analyze in that FY.

• Note – We decided to aggregate all of Tenet’s hospitals by state to compare outlier payments. Experts we spoke with suggested we analyze Tenet that way and explained it would be a fairer calculation for Tenet due to some CBSAs having few comps and others having a lot. 

Step 4 – Convert Outlier % Differences Back to Dollars to Calculate Est Excess Outlier Payments 

Silly analyst, you thought you were done after >300 calculations. Nope, we are just getting started. You are only done with one year. 

Step 5 – Repeat Steps 1, 2, 3, 4 for every FY you want to analyze. 

We apologize for providing a road map to anyone’s boss who made them duplicate this same analysis. Hopefully you don’t need to take 12 steps by the time you completed this.

Our CMS data analysis resulted in an Estimated $168 Million of Excess Outlier Payments. 

Case Study: Tenet’s “Palm Beach Gardens Medical Center”

For example, here is our analysis of Palm Beach Gardens Medical Center in FY 2021. That year, Palm Beach Gardens took in ~ $3.2 million in outlier payments, or 7.7% its total Medicare reimbursement of ~ $41 million. 

We pulled Palm Beach Gardens outlier payments from CMS Worksheet E Part A, which was ~$3.2 million.

Then pull the total Medicare reimbursement, which was ~$41.6 million.

Dividing the two shows Palm Beach Gardens generated ~7.7% of their total Medicare reimbursement from outlier payments in FY 2021.

We found more than 20 comp hospitals near Palm Beach Gardens in CBSA 33100 that are roughly the same size and also do short-term acute care. Repeating the process above for all >20 peer hospitals in the region gives us an outlier percentage for the group of 3.6%.

If Palm Beach Garden’s outlier payment percentage was in line with the 3.6% its peers earned, Palm Beach Garden’s would’ve charged Medicare about $1.7 million less in outlier payments in 2021.

How Tenet Got Caught in 2002? Tenet Stopped Disclosing Outlier Payments in FY 2021

In October 2002, a UBS analysts published a sell recommendation report on Tenet, claiming their recent growth in earnings was unsustainable as a large portion was derived from outlier payments. The UBS analyst was not satisfied with management’s vague disclosure regarding outlier payments.

This initial red flag was a snowball getting pushed off a hill. There were FBI raids on certain hospitals and Whistleblowers filed qui tam lawsuits which the government intervened in. 

The Justice Department lawsuit said Tenet’s outlier scheme worked as follows:

• Tenet artificially inflated its current charges for routine and ancillary inpatient services.
• These inflated charges were multiplied by statewide CCRs, which were higher than Tenet’s CCRs.
• This falsely caused routine cases to be considered as atypical and qualified for outlier payments.

The Justice Department said Tenet engaged in this scheme from 1995 – 2003. 

Interestingly, Tenet’s disclosure regarding outlier payments has gotten vague again. Tenet Management stopped disclosing outlier payments to investors in FY 2021. Red Flag?!

OIG Explained How Outlier Payments Can Be Manipulated – Don’t Hate the Player, Hate the Game 

In a 2019 audit report, the OIG told CMS that outlier payments can easily be manipulated via playing with a hospital’s charges. The OIG’s conclusion was that, by having a set disclosed threshold for review, hospital systems can manipulate their cost to charge ratios in order to game Medicare reimbursement while ensuring they aren’t doing too much, which would trigger a mandatory review. 

It works like this: Medicare converts a hospital’s charges into estimated costs using a cost-to-charge ratio based on periodic audits. If the estimated costs are higher than a predetermined CMS threshold, the hospital is reimbursed an extra outlay through an outlier payment. The higher the cost-to-charge ratio, the higher the outlier reimbursements. 

But there is a crucial flaw that Tenet has allegedly exploited: Since Medicare is behind on auditing hospital cost reports, it uses cost-to-charge ratios that are typically several years out of date to calculate reimbursements. If a hospital inflates today’s charges, it can take advantage of its older, higher cost-to-charge ratio to get larger outlier payments from Medicare even when its actual costs are flat. 

For example, let’s make assumptions for a hospital over a two-year period: 

• In Year A, Medicare does a cost audit for a hospital whose actual costs are $5 and submits charges to Medicare of $10. 
• Medicare then sets the hospital’s cost-to-charge ratio at 0.50 ($5 cost/$10 charge).
• It pays the hospital $5.
• In Year B, no audit is done, and the hospital submits charges of $11 even though its costs remain $5.
• Medicare still uses the cost-to-charge ratio from Year A. 
• It then pays the hospital $5.5, even though the hospital’s actual costs remained flat. 
• BOOM! The hospital is now making $0.50 extra from taxpayers for doing nothing new.

Automatic Audit – There is one exception: If a hospital’s cost-to-charge ratio swings by -/+ 10%, it automatically triggers an audit. But if a hospital keeps the increase under that 10% threshold, it can game the system. Our analysis uncovered Tenet’s charges growing faster than cost. We believe this is an effort to get more outlier payments. 

Cost-to-Charge Ratios Confirms Our Outlier Analysis – Tenet’s Charges Went Up Faster Than Competitors 

As we’ve explained above, outlier payments are directly related to the cost-to-charge ratios and manipulating charges higher results in excess outlier payments given the lag in auditing. 

To calculate the CCR of Tenet vs peers, we took the same peer group described above, organized by CBSA. CMS also has a sheet called “Worksheet C Part 1” which provides the total costs and charges for a hospital. The data can be obtained here. We pulled these worksheets for every Tenet owned and peer hospital for 2013-2023. Dividing costs by charges results in the cost-to-charge ratio. 

The result is what one would expect from a company inflating charges at a higher rate than costs. On a system-level basis, Tenet’s CCR decreases on average ~6.5% per year over the decade, while peers decrease at ~1%. This system-level analysis shows Tenet’s outlier game could be systemic, and not one-off. 

What if the CCR is falling because Tenet has just become more efficient at managing costs?  

We calculated the growth in costs and charges using the same Worksheet C Part 1. Tenet’s costs increase 2-3% on average per year. So, the only way to see a decrease in the CCR is by having charges increase at a faster rate than costs, which is exactly what we see in the data.

Appendix F – Allegations Tenet Retaliated Against Whistleblowers

• Former employees and whistleblowers claim speaking up at Tenet resulted in getting fired. 

“Executives who did stand up for things or spoke out about things would get let go, would be fired. So, there was this sense of kind of keep your head down, keep your mouth shut.”

~ Former Tenet Recruiting Executive

Throughout our research, we kept hearing from former Tenet executives and employees that those who spoke up about wrongdoing were invariably pushed out. 

Multiple former employees warned us to not dig too deep into Tenet and to “let sleeping dogs lie.”

• A doctor at Tenet’s Detroit Medical Center had his contract cut after he and two colleagues blew the whistle and filed a lawsuit over what they alleged was fraudulent billing and horrific conditions at the hospital (see Part IV of this report – it’s the place where a dead patient went unnoticed for hours while Tenet billed the government for a living, breathing inpatient).
• A lawsuit out of Detroit revealed that Tenet terminated two cardiologists after they reported patient deaths due to cost cutting and Medicare fraud. Tenet settled the case for $10.60 million in 2022. 
• Tenet allegedly fired housekeepers who reported safety concerns due to cost saving that led to unsanitary hospital conditions — including leaks, rat infestations, and cleaning supply deficiencies – according to an ongoing lawsuit out of Michigan. 
• A physician at St. Louis University Hospital was “forced to resign” after advising Tenet management that the hospital was “engaging in medical and billing practices designed to defraud Medicaid, Medicare and individual patients,” according to a lawsuit. Tenet settled the case for $1.80 million. 
• The former Tenet Operations Executive told us: “One of the reasons I feel I was let go during Covid is that it was a convenient time to let someone go who pushed back against things they didn’t agree with.”

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1. USA e. rel. Erik Olsen v. Tenet Case 2-22-cv-11590-GAD-KGA Amended Complaint – The 6^th circuit court dismissed the case in April 2025. We were told that the dismissal was due to technicality regarding the 6^th Circuit court having a different standard than other federal courts which requires doctors reporting fraud via false claims to also have someone involved in the billing who directly witnessed the upcoding fraud to move forward. The plaintiffs are planning to appeal the ruling. ↩︎