Exhibit 10.2

 

LOGO [g192978page030.jpg]   

U.S. Department of Justice

 

Criminal Division

September 30, 2016

Kathryn H. Ruemmler

Latham & Watkins LLP

555 11th Street, N.W.

Suite 1000

Washington, DC 20004

 

  Re: Tenet HealthSystem Medical, Inc.

Dear Ms. Ruemmler:

The United States Department of Justice, Criminal Division, Fraud Section and
the United States Attorney’s Office for the Northern District of Georgia (the
“Offices”) and Tenet HealthSystem Medical, Inc. (on its behalf and on behalf of
its subsidiaries) (collectively, “Tenet Subsidiary”), pursuant to authority
granted by the Board of Directors of its parent, Tenet Healthcare Corporation
(“Tenet”) attached hereto (Attachment B), enters into this Non-Prosecution
Agreement (“Agreement”). As indicated below, Tenet is undertaking certain
obligations under the Agreement.

1. Relevant Considerations. The Offices enter into this Agreement based on the
individual facts and circumstances presented by this case, including those
described below.

 

  a. Tenet Subsidiary and Tenet engaged in remedial measures, including:

 

  i. substantially restricting the types of services that they permit their
hospitals to purchase from a referral source;

 

  ii. adding new policies and amending existing policies for contracts with
referral sources to make more clear the requirements as to the identification of
the need for contracted-for services, defining the scope of contracted-for
services, justifying the selection of a particular contractor over a
non-referral source option, compensating contractors at fair market value, and
obtaining adequate documentation to justify payments for services rendered;

 

  iii. making improvements to its corporate auditing and monitoring of hospital
contracts with referral sources, including verifying that payments to referral
sources are substantiated with appropriate supporting documentation pursuant to
the terms of the contract, and amending policies to require that, in the event
an audit has identified a deficiency related to a referral source contract and
the hospital has failed to meet a deadline to take corrective action, the
hospital must suspend all federal program bills related to the audit deficiency;

--------------------------------------------------------------------------------

  iv. instituting an enhanced training program to implement and ensure
compliance with the new and enhanced policies described above;

 

  v. taking steps to centralize oversight of all referral-source contracts by
shifting contract administrator positions from hospitals to its corporate
headquarters and having these positions report to the legal department; and

 

  vi. divesting, in April 2016, three subsidiary hospitals involved in the
conduct described in the Statement of Facts attached hereto (Attachment A):
(1) Atlanta Medical Center, Inc. (“Atlanta Medical”); (2) North Fulton Medical
Center, Inc. d/b/a North Fulton Hospital (“North Fulton”); and (3) Spalding
Regional Medical Center, Inc. d/b/a Spalding Regional Medical Center
(“Spalding”);

 

  b. Tenet Subsidiary and Tenet have committed to continue to enhance their
compliance and ethics program and internal controls, including ensuring that
their compliance program is designed and implemented to prevent and detect
violations of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and the Stark
Law, 42 U.S.C. § 1395nn;

 

  c. Tenet has agreed to retain an Independent Compliance Monitor to aid in the
enforcement, implementation, and maintenance of its compliance and ethics
program and internal controls, as provided in Paragraphs 7-9, below;

 

  d. Tenet, Tenet Subsidiary, and their subsidiaries that previously owned and
operated hospitals, including Atlanta Medical and North Fulton, have agreed to a
global resolution of criminal and civil liability relating to the conduct
described in the Statement of Facts attached hereto (Attachment A), which
includes this Agreement and the following components:

 

  i. Atlanta Medical, a direct subsidiary of Tenet HealthSystem Medical, Inc.
and an indirect subsidiary of Tenet, has agreed to plead guilty to one count of
conspiring under Title 18, United States Code, Section 371 to violate the
Anti-Kickback Statute, Title 42, United States Code, Sections 1320a-7b(b)(2)(A)
and (B) and 1320a-7b(b)(l)(A) and (B), and to defraud the United States, and to
pay a $84,696,727 forfeiture money judgment pursuant to a negotiated plea
agreement, which is incorporated by reference into this Agreement (Attachment
D);

 

2

--------------------------------------------------------------------------------

  ii. North Fulton, a direct subsidiary of Tenet HealthSystem Medical, Inc. and
an indirect subsidiary of Tenet, has agreed to plead guilty to one count of
conspiring under Title 18, United States Code, Section 371 to violate the
Anti-Kickback Statute, Title 42, United States Code, Sections 1320a-7b(b)(2)(A)
and (B) and 1320a-7b(b)(l)(A) and (B), and to defraud the United States and to
pay a $60,019,618 forfeiture money judgment pursuant to a negotiated plea
agreement, which is incorporated by reference into this agreement (Attachment
E); and

 

  iii. Tenet has agreed to pay $368,000,000 to the United States, the State of
Georgia, and the State of South Carolina to resolve its civil liability for
certain civil claims, including under the federal False Claims Act and State of
Georgia Medicaid False Claims Act pursuant to a civil Settlement Agreement,
which is incorporated by reference into this Agreement (Attachment F);

 

  e. the nature and seriousness of the offense, including that senior executives
and employees of Tenet Subsidiary, some working as senior executives at Atlanta
Medical, North Fulton, Spalding, and Hilton Head Hospital, engaged in at least a
10-year scheme to pay over $12 million to the owners and operators of a chain of
prenatal care clinics designed to induce the owners and operators to: (1) refer
Medicaid patients to Atlanta Medical, North Fulton, Spalding, and Hilton Head
Hospital for labor and delivery services; and (2) arrange for these hospitals to
provide services to these Medicaid patients and their newborns, resulting in the
hospitals receiving over $146 million from the Medicaid and Medicare programs
for the illegally referred patients;

 

  f. Tenet Subsidiary has no prior criminal history; and

 

  g. Tenet Subsidiary and Tenet (on its behalf and through its subsidiaries and
affiliates) have agreed to continue to cooperate with the Offices in any ongoing
investigation of the conduct of Tenet Subsidiary, Tenet, their subsidiaries and
affiliates and their officers, directors, employees, agents, business partners,
and consultants relating to violations of the Anti-Kickback Statute, or
additional conduct, as provided in Paragraph 5, below.

2. Acceptance of Responsibility. Tenet Subsidiary admits, accepts, and
acknowledges that it is responsible under United States law for the acts of its
officers, directors, employees, and agents as set forth in the attached
Statement of Facts attached hereto as Attachment A and incorporated by reference
into this Agreement, and that the facts described in Attachment A are true and
accurate. Tenet Subsidiary also admits, accepts, and acknowledges that the facts
described in Attachment A constitute a violation of law, specifically a
conspiracy under Title 18, United States Code, Section 371, to violate the
Anti-Kickback Statute, Title 42, United States Code, Sections 1320a-7b(b)(2)(A)
and (B) and 1320a-7b(b)(1)(A) and (B), and to defraud the United States.

 

3

--------------------------------------------------------------------------------

3. Tenet Subsidiary and Tenet expressly agree that they shall not, through
present or future attorneys, officers, directors, employees, agents or any other
person authorized to speak for Tenet Subsidiary or Tenet make any public
statement, in litigation or otherwise, contradicting the acceptance of
responsibility set forth above or the facts described in the Statement of Facts
attached hereto as Attachment A. Tenet Subsidiary and Tenet agree that if they
or any of their direct or indirect subsidiaries or affiliates issues a press
release or holds any press conference in connection with this Agreement, Tenet
Subsidiary and Tenet shall first consult the Offices to determine (a) whether
the text of the release or proposed statements at the press conference are true
and accurate with respect to matters relating to this Agreement; and (b) whether
the Offices have any objection to the release.

4. Term of the Agreement. Tenet Subsidiary’s and Tenet’s obligations under this
Agreement shall have a term of 3 years from the later of the date on which the
Agreement is executed or the date on which the independent compliance monitor
(the “Monitor”) is retained by Tenet, as described below (the “Term”). Tenet
Subsidiary agrees, however, that in the event the Offices determine, in their
sole discretion, that Tenet Subsidiary or Tenet, or any of Tenet’s subsidiaries
or affiliates has knowingly violated any provision of this Agreement, subject to
Paragraph 12, below, an extension or extensions of the term of the Agreement may
be imposed by the Offices, in their sole discretion, for up to a total time
period of one year, without prejudice to the Offices’ right to proceed as
provided in Paragraphs 13-14, below. Any extension of this Agreement extends all
terms of this Agreement, including the terms of the monitorship in Attachment C,
for an equivalent period. Conversely, in the event the Offices find, in their
sole discretion, that there exists a change in circumstances sufficient to
eliminate the need for a monitorship as described in Attachment C, or that the
other provisions of this Agreement have been satisfied, the monitorship or the
Term of this Agreement may be terminated early.

5. Future Cooperation and Disclosure Requirements. Tenet Subsidiary and Tenet
shall cooperate fully with the Offices in any and all matters relating to the
conduct described in this Agreement and Attachment A and other conduct under
investigation by the Offices or any other component of the Department of Justice
at any time during the Term of this Agreement, subject to applicable law and
regulations, until the later of the date upon which all investigations and
prosecutions arising out of such conduct are concluded, or the end of the Term.
At the request of the Offices, Tenet Subsidiary and Tenet shall also cooperate
fully with other law enforcement and regulatory authorities and agencies in any
investigation of Tenet Subsidiary or Tenet or Tenet’s affiliates and
subsidiaries, or any of their present or former officers, directors, employees,
agents, and consultants, or any other party, in any and all matters relating to
the conduct described in this Agreement and Attachment A and other conduct under
investigation by the Offices or any other component of the Department of Justice
at any time during the Term of this Agreement. Tenet Subsidiary and Tenet agree
that their cooperation shall include, but not be limited to, the following:

 

  a. Tenet Subsidiary and Tenet shall truthfully disclose all factual
information not protected by a valid claim of attorney-client privilege or work
product doctrine with respect to their activities, those of their affiliates,
and those of their present and former directors, officers, employees, agents,
and consultants, including any evidence or allegations and internal or external

 

4

--------------------------------------------------------------------------------

  investigations, about which they have any knowledge or about which the Offices
may inquire. This obligation of truthful disclosure includes, but is not limited
to, the obligation of Tenet Subsidiary and Tenet to provide to the Offices, upon
request, any document, record or other tangible evidence about which the Offices
may inquire of Tenet Subsidiary or Tenet.

 

  b. Upon request of the Offices, Tenet Subsidiary and Tenet shall designate
knowledgeable employees, agents or attorneys to provide to the Offices the
information and materials described above on behalf of Tenet Subsidiary and
Tenet. It is further understood that Tenet Subsidiary and Tenet must at all
times provide complete, truthful, and accurate information.

 

  c. Tenet Subsidiary and Tenet shall use their best efforts to make available
for interviews or testimony, as requested by the Offices, present or former
officers, directors, employees, agents and consultants of Tenet Subsidiary and
Tenet within one month of the Offices’ request. This obligation includes, but is
not limited to, sworn testimony before a federal grand jury or in federal
trials, as well as interviews with law enforcement and regulatory authorities.
Cooperation shall include identification of witnesses who, to the knowledge of
Tenet Subsidiary and Tenet, may have material information regarding the matters
under investigation.

 

  d. With respect to any information, testimony, documents, records or other
tangible evidence provided to the Offices pursuant to this Agreement, Tenet
Subsidiary and Tenet consents to any and all disclosures, subject to applicable
law and regulations, to other governmental authorities of such materials as the
Offices, in their sole discretion, shall deem appropriate.

 

  e. During the Term of the Agreement, should Tenet Subsidiary or Tenet learn of
evidence or allegations of actual or potential violations of the Anti-Kickback
Statute, they shall promptly report such evidence or allegations to the Offices.
No later than thirty days after the expiration of the Term of this Agreement,
Tenet, by the Chief Executive Officer of Tenet and the Chief Financial Officer
of Tenet, will certify to the Department that Tenet Subsidiary and Tenet have
met their disclosure obligations pursuant to this Agreement. Such certifications
will be deemed a material statement and representation by Tenet Subsidiary and
Tenet to the executive branch of the United States for purposes of 18 U.S.C. §
1001.

6. Corporate Compliance Program. Tenet Subsidiary and Tenet represent that they
have implemented and will continue to maintain Tenet’s compliance and ethics
program throughout its operations, including those of its subsidiaries,
affiliates, agents, and joint ventures (to the extent that Tenet Subsidiary or
Tenet manages or controls such joint ventures), that is designed and implemented
to prevent and detect violations of the Anti-Kickback Statute and Stark Law.

 

5

--------------------------------------------------------------------------------

7. Independent Compliance Monitor. Tenet agrees to retain a Monitor for the term
of 3 years from the date on which the Monitor is retained by Tenet, subject to
extension or early termination as described above. The Monitor’s duties and
authority, and the obligations of Tenet with respect to the Monitor and the
Offices, are set forth in Attachment C, which is incorporated by reference into
this Agreement. Upon the execution of this Agreement, and after consultation
with the Offices, Tenet will propose to the Offices a pool of three qualified
candidates to serve as the Monitor. If the Offices determine, in their sole
discretion, that any of the candidates are not, in fact, qualified to serve as
the Monitor, or if the Offices, in their sole discretion, are not satisfied with
the candidates proposed, the Offices reserve the right to seek additional
nominations from Tenet. The parties will use their best efforts to complete the
monitor selection process within sixty calendar days of the execution of this
Agreement. The Monitor candidates or their team members shall have, at a
minimum, the following qualifications:

 

  a. demonstrated expertise with respect to monitoring and/or evaluating the
effectiveness of corporate compliance programs in the health care industry;

 

  b. experience designing, reviewing and/or counseling on corporate compliance
policies, procedures and internal controls, including the Anti-Kickback Statute,
the Stark Law, referral source arrangements, and procurement policies,
procedures and internal controls;

 

  c. the ability to access and deploy resources as necessary to discharge the
Monitor’s duties as described in the Agreement; and

 

  d. sufficient independence from Tenet to ensure effective and impartial
performance of the Monitor’s duties as described in the Agreement.

8. The Offices retain the right, in their sole discretion, to choose the Monitor
from among the candidates proposed by Tenet, though Tenet may express its
preference(s) among the candidates. In the event the Offices reject all proposed
Monitors, the Offices shall propose an additional three candidates within twenty
business days after providing notice of the rejection to Tenet. This process
shall continue until a Monitor acceptable to both parties is chosen. The Offices
and Tenet will use their best efforts to complete the monitor selection process
within sixty calendar days of the execution of this Agreement. If the Monitor
resigns or is otherwise unable to fulfill his or her obligations as set out
herein and in Attachment C, Tenet shall within twenty business days of receipt
of notice from the Monitor or the Offices, whichever comes first, recommend a
pool of three qualified Monitor candidates from which the Offices will choose a
replacement.

 

6

--------------------------------------------------------------------------------

9. The Monitor’s powers, duties, and responsibilities, as well as additional
circumstances that may support an extension of the Monitor’s term, are set forth
in Attachment C. Tenet agrees that it will not employ or be affiliated with the
Monitor or the Monitor’s firm for a period of not less than two years from the
date on which the Monitor’s term expires. Nor will Tenet discuss with the
Monitor or the Monitor’s firm the possibility of further employment or
affiliation during the Monitor’s term.

10. Monetary Penalty. The Offices are not requiring Tenet Subsidiary to pay a
monetary penalty under this Agreement, which is conditioned on: (1) Atlanta
Medical entering its guilty plea and paying a $60,091,618 forfeiture money
judgment within 10 days after its sentencing; (2) North Fulton entering its
guilty plea and paying a $84,696,727 forfeiture money judgment within 10 days
after its sentencing; and (3) Tenet paying $368,000,000 to the United States,
the State of Georgia, and the State of South Carolina under the civil Settlement
Agreement. The Offices and Tenet Subsidiary agree that this disposition is
appropriate given the relevant considerations outlined above, including Atlanta
Medical and North Fulton’s agreement to pay the forfeiture money judgments under
their respective plea agreements with the Offices, and Tenet’s agreement to pay
the civil settlement amount to the United States and the State of Georgia under
the Settlement Agreement. Nothing in this Agreement shall be deemed an agreement
by the Offices that no monetary penalty may be imposed in any future prosecution
in the event of a breach of this Agreement, and the Offices are not precluded
from arguing in any potential future prosecution that the Court should impose a
penalty and the amount of such penalty.

11. Conditional Release from Liability. The Offices agree, except as provided
herein, that they will not bring any criminal or civil case against Tenet
Subsidiary or any of its present or former affiliates and parents, including
Tenet and its subsidiaries and affiliates, relating to any of the conduct
described in the Statement of Facts, attached hereto as Attachment A. The
Offices, however, may use any information related to the conduct described in
the attached Statement of Facts against Tenet Subsidiary or Tenet or any of
Tenet’s subsidiaries or affiliates: (a) in a prosecution for perjury or
obstruction of justice; (b) in a prosecution for making a false statement;
(c) in a prosecution or other proceeding relating to any crime of violence; or
(d) in a prosecution or other proceeding relating to a violation of any
provision of Title 26 of the United States Code. This Agreement does not provide
any protection against prosecution for any future conduct by Tenet Subsidiary,
Tenet, or any of its present or former parents, affiliates, or subsidiaries. In
addition, this Agreement does not provide any protection against prosecution of
any individuals, regardless of their affiliation with Tenet Subsidiary or Tenet.

12. Breach. If, during the Term of this Agreement, (a) Tenet Subsidiary commits
any felony under U.S. federal law or if Tenet commits a felony related to the
Anti-Kickback Statute; (b) Tenet Subsidiary or Tenet provides in connection with
this Agreement deliberately false, incomplete, or misleading information,
including in connection with its disclosure of information about individual
culpability; (c) Tenet Subsidiary or Tenet fails to cooperate as set forth in
this Agreement; (d) Tenet Subsidiary or Tenet fails to continue to implement and
maintain a compliance and ethics program as set forth in this Agreement;
(e) Tenet fails to retain an Independent Compliance Monitor as set forth in this
Agreement and in Attachment C; or (f) Tenet Subsidiary or Tenet otherwise fails
specifically to perform or to fulfill completely each of Tenet Subsidiary and
Tenet obligations under the Agreement, regardless of whether the Offices become
aware of such a breach after the Term of the Agreement is complete, Tenet
Subsidiary and Tenet, and Tenet’s subsidiaries and affiliates shall thereafter
be subject to prosecution for

 

7

--------------------------------------------------------------------------------

any federal criminal violation of which the Offices have knowledge, including,
but not limited to, the conduct described in the attached Statement of Facts,
which may be pursued by the Offices in the U.S. District Court for the Northern
District of Georgia or any other appropriate venue. Determination of whether
Tenet Subsidiary or Tenet has breached the Agreement and whether to pursue
prosecution of Tenet Subsidiary, Tenet, or Tenet’s subsidiaries or affiliates
shall be in the Offices’ sole discretion. Any such prosecution may be premised
on information provided by Tenet Subsidiary, Tenet, or Tenet’s subsidiaries or
affiliates. Any such prosecution relating to the conduct described in the
attached Statement of Facts or relating to conduct known to the Offices prior to
the date on which this Agreement was signed that is not time-barred by the
applicable statute of limitations on the date of the signing of this Agreement
may be commenced against Tenet Subsidiary, Tenet, or Tenet’s subsidiaries or
affiliates, notwithstanding the expiration of the statute of limitations,
between the signing of this Agreement and the expiration of the Term plus one
year. Thus, by executing this Agreement, Tenet Subsidiary and Tenet agree that
the statute of limitations with respect to any such prosecution that is not
time-barred on the date of the signing of this Agreement shall be tolled for the
Term plus one year. In addition, Tenet Subsidiary and Tenet agree that the
statute of limitations as to any violation of federal law that occurs during the
Term will be tolled from the date upon which the violation occurs until the
earlier of the date upon which the Offices are made aware of the violation or
the duration of the Term plus five years, and that this period shall be excluded
from any calculation of time for purposes of the application of the statute of
limitations.

13. In the event the Offices determine that Tenet Subsidiary or Tenet has
breached this Agreement, the Offices agree to provide Tenet Subsidiary and Tenet
with written notice prior to instituting any prosecution of Tenet Subsidiary or
Tenet resulting from such breach. Within thirty days of receipt of such notice,
Tenet Subsidiary and Tenet shall have the opportunity to respond to the Offices
in writing to explain the nature and circumstances of the breach, as well as the
actions Tenet Subsidiary and Tenet have taken to address and remediate the
situation, which the Offices shall consider in determining whether to pursue
prosecution of Tenet Subsidiary, Tenet, or Tenet’s subsidiaries or affiliates.

14. In the event that the Offices determine that Tenet Subsidiary or Tenet has
breached this Agreement: (a) all statements made by or on behalf of Tenet
Subsidiary or Tenet, or Tenet’s subsidiaries or affiliates to the Offices or to
the Court, including the attached Statement of Facts, and any testimony given by
Tenet Subsidiary or Tenet, or Tenet’s subsidiaries or affiliates before a grand
jury, a court, or any tribunal, or at any legislative hearings, whether prior or
subsequent to this Agreement, and any leads derived from such statements or
testimony, shall not be challenged by Tenet Subsidiary and Tenet or Tenet’s
subsidiaries or affiliates and shall be admissible in evidence in any and all
criminal proceedings brought by the Offices against Tenet Subsidiary, Tenet, or
Tenet’s subsidiaries or affiliates; and (b) Tenet Subsidiary, Tenet, or Tenet’s
subsidiaries or affiliates shall not assert any claim under the United States
Constitution, Rule 11(f) of the Federal Rules of Criminal Procedure, Rule 410 of
the Federal Rules of Evidence, or any other federal rule that any such
statements or testimony made by or on behalf of Tenet Subsidiary, Tenet, or
Tenet’s subsidiaries or affiliates prior or subsequent to this Agreement, or any
leads derived therefrom, should be suppressed or are otherwise inadmissible. The
decision whether conduct or statements of any current director, officer or
employee, or any person acting on behalf of, or at the direction of, Tenet
Subsidiary, Tenet, or Tenet’s subsidiaries or affiliates, will be imputed to
Tenet Subsidiary or Tenet for the purpose of determining whether Tenet
Subsidiary or Tenet has breached any provision of this Agreement shall be in the
sole discretion of the Offices.

 

8

--------------------------------------------------------------------------------

15. Sale or Merger. Except as may otherwise be agreed by the parties in
connection with a particular transaction, Tenet Subsidiary and Tenet agree that
in the event that, during the Term of the Agreement, they sell, merge, or
transfer all or substantially all of their respective business operations or the
business operations of their subsidiaries or affiliates involved in the conduct
described in Attachment A of the Agreement attached hereto as they exist as of
the date of the Agreement, whether such sale is structured as a sale, asset
sale, merger, transfer, or other change in corporate form, they shall include in
any contract for sale, merger, transfer, or other change in corporate form a
provision binding the purchaser to retain the commitment of Tenet Subsidiary or
Tenet, or any successor in interest thereto, to comply with the obligations
described in this Agreement, such that the obligations of this Agreement
continue to apply to such business operations following the completion of the
transaction. Notwithstanding the foregoing, nothing in this Section 15 shall be
construed as applying to assets not owned by Tenet or Tenet Subsidiary as of the
date immediately prior to the closing of any such sale, merger, transfer or
other change in corporate form. Except as may otherwise be agreed by the parties
hereto in connection with a particular transaction, if, during the Term of the
Agreement, Tenet Subsidiary or Tenet undertake any change in corporate form that
involves business operations that are material to their consolidated operations
or to the operations of any subsidiaries or affiliates involved in the conduct
described in Attachment A of the Agreement attached hereto, whether such
transaction is structured as a sale, asset sale, merger, transfer, or other
change in corporate form, Tenet Subsidiary and Tenet shall provide notice to the
Offices at least thirty (30) days prior to undertaking any such change in
corporate form. If such transaction (or series of transactions) has the effect
of circumventing or frustrating the enforcement purposes of this Agreement, as
determined in the sole discretion of the Offices, it shall be deemed a breach of
this Agreement.

16. Limitations on Binding Effect of Agreement. This Agreement is binding on
Tenet Subsidiary, Tenet (as reflected in the resolution hereto attached as
Attachment B), and the Offices but specifically does not bind any other
component of the Department of Justice, other federal agencies, or any state or
local law enforcement or regulatory agencies, or any other authorities, although
the Offices will bring the cooperation of Tenet Subsidiary and Tenet and its
compliance with its other obligations under this Agreement to the attention of
such agencies and authorities if requested to do so by Tenet Subsidiary or
Tenet.

17. The Offices and Tenet Subsidiary agree that this Agreement is null and void
if: (a) Atlanta Medical does not enter its guilty plea and does not pay a
forfeiture money judgment in the amount of $84,696,727 within 10 days of its
sentencing; (b) North Fulton does not enter its guilty plea and does not pay a
forfeiture money judgment in the amount of $60,091,618 within 10 days of its
sentencing; and (c) Tenet does not pay $368,000,000 to the United States, the
State of Georgia, and the State of South Carolina under the terms of the civil
Settlement Agreement.

18. It is further understood that Tenet Subsidiary, Tenet, and the Offices may
disclose this Agreement to the public.

 

9

--------------------------------------------------------------------------------

19. Complete Agreement. This Agreement sets forth all the terms of the agreement
between Tenet Subsidiary and the Offices. No amendments, modifications or
additions to this Agreement shall be valid unless they are in writing and signed
by the Offices, the attorneys for Tenet Subsidiary, and duly authorized
representatives of Tenet Subsidiary.

 

Sincerely,

/s/ Andrew Weissmann

ANDREW WEISSMANN Chief, Fraud Section Criminal Division United States Department
of Justice Joseph S. Beemsterboer Deputy Chief, Fraud Section Robert A. Zink
Assistant Chief, Fraud Section Sally B. Molloy Antonio M. Pozos Trial Attorneys
Fraud Section, Health Care Unit Corporate Strike Force

/s/ John A. Horn

JOHN A. HORN United States Attorney Northern District of Georgia Randy S.
Chartash Chief, Economic Crime Section Stephen H. McClain Deputy Chief, Health
Care Fraud

 

10

--------------------------------------------------------------------------------

AGREED AND CONSENTED TO:

Tenet HealthSystem Medical, Inc.*

 

Date: September 30, 2016   BY:  

/s/ William Morrison

  William Morrison   Vice President and Assistant General Counsel   Tenet
Healthcare Corporation Date: September 30, 2016   BY:  

/s/ Kathyrn H. Ruemmler

  Kathryn H. Ruemmler   Latham & Watkins LLP

 

*  Where Tenet is indicated in the Agreement, Tenet Subsidiary is also acting on
behalf of Tenet.

 

11

--------------------------------------------------------------------------------

ATTACHMENT A

STATEMENT OF FACTS

The following Statement of Facts is incorporated by reference as part of the
non-prosecution agreement (the “Agreement”) between the United States Department
of Justice, Criminal Division, Fraud Section, and the United States Attorney’s
Office for the Northern District of Georgia (the “Offices”). Tenet HealthSystem
Medical, Inc. (on its behalf and on behalf of its subsidiaries identified below)
(collectively, “Tenet Subsidiary”), hereby agrees and stipulates that the
following information is true and accurate. Tenet Subsidiary admits, accepts,
and acknowledges that it is responsible for the acts of its officers, directors,
employees, and agents as set forth below:

The Federal Health Care Anti-Kickback Statute

1. The federal Anti-Kickback Statute prohibited any person from knowingly and
willfully offering or paying any remuneration (including a kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in kind, to any
person to induce such person: (a) to refer an individual to a person for the
furnishing or arranging for the furnishing of any item or service for which
payment can be made in whole or part by a Federal health care program; or (b) to
purchase, lease, order, or arrange for or recommend purchasing, leasing, or
ordering any good, facility, service, or item for which payment may be made in
whole or in part under a Federal health care program. 42 U.S.C.
§ 1320a-7b(b)(2)(A)-(B).

2. The statute likewise prohibited any person from knowingly and willfully
soliciting or receiving any remuneration (including a kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in kind: (a) in
return for referring an individual to a person for the furnishing or arranging
for the furnishing of any item or service for which payment can be made in whole
or part by a Federal health care program; or (b) in return for purchasing,
leasing, ordering, or arranging for or recommending purchasing, leasing, or
ordering any good, facility, service, or item for which payment may be made in
whole or in part under a Federal health care program. 42 U.S.C. §
1320a-7b(b)(l)(A)-(B).

3. The Medicare Program and the Medicaid Program were “Federal health care
program[s],” as defined in Title 42, United States Code, Section 1320a-7b(f) and
“health care benefit program[s]” as defined in Title 18, United States Code,
Section 24(b).

The Medicare Program

4. In 1965, Congress enacted Title XVIII of the Social Security Act, known as
the Medicare program, to pay for the costs of certain healthcare services.
Entitlement to Medicare is based on age, disability or affliction with end-stage
renal disease. 42 U.S.C. §§ 426, 426A.

5. The Department of Health and Human Services (“HHS”) was responsible for the
administration and supervision of the Medicare program. The Centers for Medicare
and Medicaid Services (CMS) was an agency of HHS and was directly responsible
for the administration of the Medicare program.

6. Part A of the Medicare Program authorized payment for institutional care,
including hospital care. See 42 U.S.C. §§ 1395c-1395i-4. In addition, hospitals
that treat large numbers of low-income patients, including Medicaid patients,
were able to seek additional federal funds through the Medicare Disproportionate
Share (“DSH”) program, 42 C.F.R. § 412.106. The formula for determining such
funding took into account the number of patients treated by a given hospital who
were eligible for Medicaid at the time of their treatment. 42 U.S.C. §
1395ww(d)(5)(F)(vi); 42 C.F.R. § 412.106(b)(4)(i).

--------------------------------------------------------------------------------

The Medicaid Program

7. The Medicaid Program was also created in 1965 as part of the Social Security
Act, which authorized federal grants to states for medical assistance to
low-income, blind or disabled persons, or to members of families with dependent
children or qualified pregnant women or children. The Medicaid Program was a
jointly funded federal-state program and was administered by CMS at the federal
level. Within broad federal rules, each state determined eligible groups, types
and ranges or services, payment levels for services, and administrative and
operating procedures.

8. Medicaid providers submitted claims for payment to states which paid the
claims and obtained the federal portion of the payment from accounts which drew
on the United States Treasury. After the end of each calendar quarter, the state
submitted to CMS a final expenditure report, which provided the basis for
adjustment to the quarterly federal funding amount (to reconcile the estimated
expenditures to actual expenditures). 42 C.F.R. §§ 430.0-430.30.

9. Undocumented aliens were not eligible for regular Medicaid coverage, but were
eligible for certain types of Emergency Medical Assistance, pursuant to 42
U.S.C. § 1396b(v). Emergency Medical Assistance (“EMA”) was the part of the
Medicaid Program that provided coverage for emergency medical conditions,
including childbirth for undocumented aliens.

10. Emergency labor and delivery by undocumented, otherwise eligible aliens, was
considered an emergency medical condition under the Medicaid Program pursuant to
42 U.S.C. § 1396b(v)(2) and § 1396b(v)(3). A child born to a woman approved for
EMA for her delivery was eligible for what is known as Newborn Medicaid.
Individuals who receive any type of benefit under Medicaid are referred to as
Medicaid “beneficiaries.”

11. As Georgia Medicaid providers, hospitals were required to execute
“Statements of Participation,” commonly referred to as provider agreements. The
provider agreements entered into by hospitals mandated compliance with the
Georgia Medicaid rules that prohibit paying or accepting, directly or
indirectly, kickbacks for referrals. The agreements further stated that “Payment
shall be made in conformity with the provisions of the Medicaid program,
applicable state and federal laws, rules and regulations promulgated by the U.S.
Department of Health and Human Services and the State of Georgia and the
Department’s policies and procedures manuals in effect on the date the service
was rendered.”

12. The Georgia Department of Community Health prohibited hospital providers
from paying kickbacks for referrals of Medicaid patients, and authorized the
denial of reimbursement for non-compliance with any of its applicable policies
and procedures and recoupment of reimbursement when a provider failed to comply
with all terms and conditions of participation related to the services for which
a claim has been paid.

 

2

--------------------------------------------------------------------------------

13. In Georgia, provider hospitals participating in the Medicaid program
submitted claims for hospital services rendered to Medicaid beneficiaries to the
Georgia Department of Community Health for payment, either directly or through a
State designee such as a fiscal intermediary.

14. The Georgia Medicaid Program would not pay claims submitted by a provider
hospital for services that it knew were the result of a provider hospital’s
payments to any person for the referral of Medicaid beneficiaries.

15. As South Carolina Medicaid providers, hospitals were required to execute a
contract with the South Carolina Department of Health and Human Services,
commonly referred to as a provider agreement.

16. The provider agreements entered into by hospitals mandated compliance with
all state and federal regulations, including those rules that prohibit paying or
accepting, directly or indirectly, kickbacks for referrals. The agreements
further stated, in pertinent part: “The Provider shall certify that the
statements, reports, and claims, financial or otherwise, are true, accurate and
complete, and the Provider shall not submit for payment, any claims statements
or reports which he knows, or has reason to know, are not properly prepared or
payable pursuant to federal and state law, applicable regulations, this Contract
and SCDHHS policy.”

17. In South Carolina, provider hospitals participating in the Medicaid program
submitted claims for hospital services rendered to Medicaid beneficiaries to the
South Carolina Department of Health and Human Services.

18. The South Carolina Medicaid program would not pay claims submitted by a
provider hospital for services that it knew were the result of a provider
hospital’s payments to any person for the referral of Medicaid beneficiaries.

Tenet HealthSystem Medical, Inc. and Other Relevant Tenet Entities

19. Tenet Healthcare Corporation (“Tenet”) was a publicly-held, Texas-based
corporation that indirectly owned for-profit hospitals across the United States,
including Atlanta Medical Center, Inc. (“Atlanta Medical”), North Fulton
Hospital, Inc. d/b/a North Fulton Hospital (“North Fulton”), Tenet Health System
Spalding, Inc. d/b/a Spalding Regional Medical Center (“Spalding”), and Hilton
Head Health System, L.P., d/b/a Hilton Head Hospital (“Hilton Head”) at all
times relevant to this Statement of Facts. Atlanta Medical, North Fulton, Hilton
Head, and Spalding will be referred to collectively as “the Tenet Hospitals.”

20. Tenet HealthSystem Medical, Inc. (“Tenet Subsidiary”) was a Tenet subsidiary
that owned for-profit hospitals in Tenet’s Southern States Region, including the
Tenet Hospitals. Tenet Subsidiary employed certain senior hospital executives
who worked at the Tenet Hospitals. The Tenet Hospitals’ senior hospital
executives reported to Tenet Regional Senior Vice Presidents of Operations and
Regional Vice Presidents of Finance Operations, who were also employed by Tenet
Subsidiary.

 

3

--------------------------------------------------------------------------------

21. Atlanta Medical Center, Inc. (“Atlanta Medical”), operated a for-profit
hospital located in Atlanta, Georgia. AMC competed with other hospitals in the
Northern District of Georgia for patients, including expectant mothers.

22. North Fulton Medical Center, Inc. d/b/a North Fulton Hospital (“North
Fulton”) operated a for-profit hospital that was located in Roswell, Georgia.
North Fulton competed with other hospitals in the Northern District of Georgia
for patients, including expectant mothers.

23. Spalding Regional Medical Center, Inc. d/b/a Spalding Regional Medical
Center (“Spalding”) operated a for-profit hospital that was located in Griffin,
Georgia. Spalding competed with other hospitals in the Northern District of
Georgia for patients, including expectant mothers.

24. Hilton Head Health System, L.P. d/b/a Hilton Head Hospital (“Hilton Head”)
owned a for-profit hospital that was located in Hilton Head, South
Carolina. Hilton Head competed with other hospitals in the District of South
Carolina and the Southern District of Georgia for patients, including expectant
mothers.

25. From at least March 2000 to at least 2013, Atlanta Medical, North Fulton,
and Spalding were enrolled as providers in the Georgia Medicaid program and
billed and received payment from the Georgia Medicaid program for labor and
delivery and newborn services.

26. From at least March 2000 to at least 2012, Atlanta Medical was enrolled as a
Medicare provider, and submitted cost reports on a yearly basis to the Medicare
program and sought and received additional reimbursement from the Medicare
Disproportionate Share (DSH) program.

27. From at least 2001 to at least 2013, North Fulton was enrolled as a Medicare
provider, and submitted cost reports on a yearly basis to the Medicare program
and sought and received additional reimbursement from the Medicare DSH program.

28. From at least January 2006 to January 2012, Hilton Head was enrolled as a
provider in the South Carolina Medicaid program and billed and received payment
from the South Carolina Medicaid program for labor and delivery services.

29. At all times relevant to the Statement of Facts, the Tenet Hospitals had
Patient Financial Services (“PFS”) departments in their hospitals whose purpose
was to assist all uninsured or indigent patients who had received hospital
services to qualify for federal health care program benefits, including Medicaid
and EMA, to pay for their services. Beginning in or around 2008, Tenet operated
a new wholly-owned subsidiary, Conifer Health Solutions, to perform many of the
same functions previously performed by PFS in the hospitals. Other than the
contracts between the Tenet Hospitals and Clinica for Medicaid eligibility
determination services discussed below, after June 2002 no other Tenet hospital
contracted with a third party to provide Medicaid eligibility determination
services.

 

4

--------------------------------------------------------------------------------

The Corporate Integrity Agreement

30. In summer 2006, Tenet entered into a civil settlement agreement with the
United States to resolve its False Claims Act liability arising from government
investigations involving alleged fraudulent billing practices and Anti-Kickback
Statute violations. As part of the civil settlement agreement, Tenet entered
into a Corporate Integrity Agreement (“CIA”) with the Department of Health and
Human Services’ Office of Inspector General (“HHS-OIG”) in September 2006 to
ensure that all Tenet facilities complied with Medicare and Medicaid Program
requirements, including compliance with the Anti-Kickback Statute. HHS-OIG
agreed not to exclude Tenet from participating in the Medicare and Medicaid
programs, conditioned on its compliance with the obligations in the CIA for five
years.

31. The CIA required, among other things, Tenet to strengthen its policies,
procedures and controls for contracts with referral sources to ensure compliance
with the Anti-Kickback Statute. The CIA also required certain employees who
reviewed or approved contracts with referral sources, including the hospital
CEOs and CFOs, to attend specialized training on referral source contracts
during each year of the CIA.

32. The CIA further required that Tenet submit certifications from “Senior
Corporate Management,” which included the Tenet Regional Senior Vice Presidents,
to HHS-OIG as part of Tenet’s CIA annual reports for each year of the 5-year
CIA, certifying “[t]o the best of my knowledge, except as otherwise described in
the applicable report, Tenet is in compliance with the requirements of the
Federal health care program requirements and the obligations of this CIA.”

33. In connection with Tenet’s submission of its annual reports and
certifications to HHS-OIG under the CIA, hospital CEOs and CFOs, among others,
were required to certify that they had accurately and honestly completed
quarterly certifications that required these executives to disclose, among other
things, reportable events under the CIA.

Clinica

34. Hispanic Medical Management, Inc. d/b/a Clinica de la Mama (“Clinica”) was a
Georgia corporation headquartered in the Northern District of Georgia. From at
least 1999 to in or around September 2010, Clinica held itself out as operating
several medical clinics that provided prenatal care to predominantly
undocumented Hispanic women in Georgia and South Carolina.

35. In or around September 2010, Clinica’s owners and operators divided the
clinics between themselves and their respective successor companies,
International Clinical Management Services, Inc. d/b/a Clinica del Bebe
(“Clinica del Bebe”) and Company A, which were Georgia corporations
headquartered in the Northern District of Georgia. Clinica, Clinica del Bebe,
and Company A will hereinafter be referred to collectively as “Clinica.”

36. For a fee, generally between $1,200 to $1,700 cash and typically in excess
of $1,500, Clinica offered to provide prenatal medical care and ancillary
services to pregnant Hispanic women. Women who signed up with Clinica for
pre-natal care were assigned to a doctor designated by Clinica.

37. The majority of undocumented Hispanic women who became Clinica patients were
uninsured and indigent. Under State and Federal law, including the Emergency
Treatment and Labor Act (“EMTALA”), hospitals are required to provide medical
care to any pregnant woman about to deliver a baby. When an uninsured and
indigent Clinica patient delivered her baby at a hospital and was qualified for
EMA under Medicaid, the hospital became eligible to receive an EMA Medicaid
payment for the hospital services rendered to that patient and a Newborn
Medicaid payment for the hospital services rendered to her baby.

 

5

--------------------------------------------------------------------------------

The Conspiracy to Steer Clinica Patients to

the Tenet Hospitals in Exchange for Unlawful Remuneration

Overview and Purpose of the Conspiracy

38. From at least 2000 through at least 2013, in the Northern District of
Georgia and elsewhere, and as described further below, (1) Clinica’s owners and
operators, (2) certain executives at the Tenet Hospitals, acting as agents of
the Tenet Hospitals, at least in part for the benefit of the Tenet Hospitals,
and within the course and scope of their employment and authority at the Tenet
Hospitals, and (3) others, agreed that the Tenet Hospitals would pay the owners
and operators of Clinica for referring its Medicaid patients (the “Clinica
patients”) to the Tenet Hospitals for delivery and arranging for services to be
provided to Clinica patients and their newborns at the Tenet Hospitals.

39. The purpose of the conspiracy was for Clinica’s owners and operators and
others to unlawfully enrich themselves, and for certain executives at the Tenet
Hospitals to unlawfully enrich and benefit the Tenet Hospitals, and themselves,
by paying, and causing to be paid, and receiving illegal remuneration designed
to induce Clinica’s owners and operators to: (1) refer Clinica patients to the
Tenet Hospitals; and (2) arrange for services to be provided to Clinica patients
and their newborns at the Tenet Hospitals, all so that the Tenet Hospitals could
bill and obtain money from the Medicaid and Medicare DSH Programs for services
provided to the unlawfully referred Clinica patients and their newborns.

Execution of the Conspiracy Generally

40. Certain executives at the Tenet Hospitals and others understood that: (1)
the owners and operators of Clinica were very successful at attracting pregnant,
undocumented Hispanic women to its clinics for prenatal care and were able to
control where these women delivered their babies; and (2) the Tenet Hospitals
could potentially realize a significant revenue stream from Medicaid and
Medicare DSH payments for providing labor and delivery services to the Clinica
patients and for providing services to their newborn babies.

41. As a result, the owners and operators of Clinica, certain executives at the
Tenet Hospitals and others, created and caused to be created contracts between
the Tenet Hospitals and Clinica. Under these contracts, the Tenet Hospitals
purported to pay Clinica to provide various services to the Tenet Hospitals
including management services, marketing consulting services, translation
services, translation management services, Medicaid eligibility determination
paperwork, community outreach, educational classes, and birth certificate
services. The true purpose of the relationship, however, was to induce the
owners and operators of Clinica to refer the Clinica patients to the Tenet
Hospitals and arrange for services to be provided to the Clinica patients and
their newborns at the Tenet Hospital.

 

6

--------------------------------------------------------------------------------

42. The alleged services that were purported to be provided by Clinica pursuant
to these contracts were, in some instances, either: (1) not needed; or (2)
duplicative of services already being provided; (3) substandard; or (4) not
rendered at all.

43. In truth and in fact, the contracts were a pretextual mechanism that allowed
certain executives at the Tenet Hospitals to cause the payment of over $12
million to the owners and operators of Clinica in exchange for referring the
Clinica patients to the Tenet Hospitals and arranging for services to be
provided to the Clinica patients and their newborns at the Tenet Hospitals.

44. The owners and operators of Clinica were able to steer Clinica patients to
particular hospitals, and arrange for Clinica patients and their newborns to
receive services at the Tenet Hospitals based on: (1) their control of the
patients who sought services from them; and (2) their leverage over the
physicians who saw those patients in its clinics. Although Clinica did not
employ the physicians or other service providers, the owners and operators of
Clinica controlled which physicians would be given time slots to see patients at
the clinics, and could ensure that only physicians who agreed to deliver at the
Tenet Hospitals were given slots.

45. To further ensure that Clinica patients delivered at the Tenet Hospitals,
the owners and operators of Clinica allowed only physicians who had delivery
privileges at the Tenet Hospitals to work in the clinics during particular
times.

46. Depending on what day a patient arrived for her initial visit, among other
factors, the patient was assigned to a particular doctor and told where she
would deliver her child. Clinica personnel would provide the patient with a
Clinica identification (ID) card, which would be presented to the hospital where
the patient delivered her baby. The ID card listed both the physician to whom
the patient had been assigned and the hospital where the patient was told to
deliver her baby.

47. To ensure that patients delivered at the Tenet Hospitals, and as part of the
scheme, the owners and operators of Clinica made and caused to be made false
statements and representations to Clinica patients. For example, in some
instances, expectant mothers were told that Medicaid would cover the costs
associated with their childbirth and the care of their newborn baby only if the
expectant mother delivered at one of the Tenet Hospitals. In other instances,
expectant mothers simply were told that they were required to deliver their baby
at one of the Tenet Hospitals, leaving expectant mothers with the false and
mistaken belief that they could not select the hospital of their choice. As a
result of these false and misleading statements and representations, along with
others, many expectant mothers traveled long distances from their homes to
deliver at the Tenet Hospitals, placing their health and safety, and that of
their newborn babies, at risk.

48. Throughout the life of the conspiracy, Tenet employed in-house lawyers and
engaged outside lawyers to review and approve agreements between the Tenet
Hospitals and Clinica. At various times throughout the conspiracy, certain
executives at the Tenet Hospitals

 

7

--------------------------------------------------------------------------------

and others concealed material facts from Tenet lawyers and outside counsel
because they knew that the agreements would not be approved if the true nature
of the Clinica arrangements were disclosed to the lawyers. In particular,
certain executives at the Tenet Hospitals and others concealed the fact that the
true purpose of the agreements was to induce the owners and operators of Clinica
to: (1) refer Clinica patients to the Tenet Hospitals; and (2) arrange for the
Tenet Hospitals to provide services to Clinica patients and their newborns.

49. To facilitate the payment of monies to Clinica for the referral of the
Clinica patients and arranging for the provision of services to Clinica patients
and their newborns at the Tenet Hospitals, certain executives at the Tenet
Hospitals and others authorized or caused Tenet to either or both (a) make
payments to Clinica without valid contracts in place, or (b) make payment
without supporting documentation or with inadequate documentation, in violation
of then-existing company policies and controls governing the disbursement of
monies to referral sources, such as Clinica.

50. To further conceal the nature, details, and extent of the unlawful
relationship between the Tenet Hospitals and Clinica, and in connection with
Tenet’s submission of its annual reports and certifications to HHS-OIG under the
CIA, certain executives at the Tenet Hospitals, acting together in concert,
certified each quarter from in or around July 2008 to in or around October 2011
that they had accurately and honestly completed quarterly certifications that
required these executives to disclose, among other things, reportable events
under the CIA, and Tenet Regional Senior Vice President of Operations A
certified each year from 2007 to 2012 that Tenet was in compliance with federal
healthcare program requirements and the requirements of the CIA. These
executives’ certifications were false and misleading because they did not
disclose, among other things, reportable events relating to Clinica under the
CIA.

51. As a result of this arrangement, the Tenet Hospitals received more than $125
million in Georgia and South Carolina Medicaid funds and more than $20 million
in Medicare DSH funds for services provided to Clinica patients and their
newborns at the Tenet Hospitals. Of that amount, Atlanta Medical received over
$74 million in Georgia Medicaid funds and over $10 million in Medicare DSH
funds, North Fulton received over $48 million in Georgia Medicaid funds and over
$12 million in Medicare DSH funds, Hilton Head received over $4 million in South
Carolina Medicaid Funds, and Spalding received approximately $10,000 in Georgia
Medicaid funds.

Specific Conduct at Atlanta Medical

52. In early 2000, Atlanta Medical contracted with Clinica to manage a clinic
located in south Atlanta as a training site for its Obstetrics and Gynecology
(OB/GYN) Residency Program residents (hereinafter the “Residency Clinic”). Under
the contract, Atlanta Medical agreed to pay Clinica a “management fee” of at
least $42,350 a month. At the same time, Atlanta Medical entered into a
marketing consulting agreement with Clinica, under which Atlanta Medical agreed
to pay up to $1,000 in consulting fees per month and up to $2,000 in expenses to
Clinica for marketing the Residency Clinic.

53. A memo submitted by Atlanta Medical executives to Tenet regional executives
and legal personnel in support of the contracts projected that 600, 750, and 900
pregnancies

 

8

--------------------------------------------------------------------------------

would be seen at the Residency Clinic during the first, second and third years
of the agreement. Under the contract, Atlanta Medical agreed to “provide
Obstetrical services through its faculty, residents or credentialed physicians
at the Medical Offices six (6) days per week.” During the time that Atlanta
Medical paid Clinica to manage the Residency Clinic, the volume of patients seen
at the Residency Clinic never met the projected 50-75 patients per month, and
the residents never trained at the Residency Clinic six days per week.

54. Around the time these initial contracts were executed, the owners and
operators of Clinica began giving Atlanta Medical credentialed obstetricians
time slots at Clinica’s other clinic locations and directing these patients to
deliver at Atlanta Medical. As a result, Atlanta Medical’s delivery volume
substantially increased, which was attributable to the patients that Clinica was
sending to Atlanta Medical from the Clinica clinics (other than the Residency
Clinic).

55. Beginning in or around July 2000, the owners and operators of Clinica began
providing periodic volume reports to Atlanta Medical administrators and
executives reporting on the number of deliveries that the Clinica clinics had
sent to Atlanta Medical and the number of deliveries that Clinica expected to
send to Atlanta Medical over the future months, broken down by Clinica clinic.
Atlanta Medical executives, including Atlanta Medical Executive A, understood
that a significant portion of Atlanta Medical’s total delivery volume was coming
from Clinica’s clinics (other than the Residency Clinic).

56. In 2000, certain Atlanta Medical executives caused Tenet to pay
approximately $423,125 to Clinica for the benefit of Atlanta Medical, and the
owners and operators of Clinica directed Clinica patients to deliver at Atlanta
Medical.

57. On or around June 14, 2001, Atlanta Medical’s original contracts with
Clinica expired. Certain Atlanta Medical executives, including Atlanta Medical
Executive A, caused Tenet to continue to pay Clinica each month for at least a
year despite the fact there was no contract in place, in violation of
then-existing company policies and controls governing agreements with referral
sources, such as Clinica.

58. At least as early as November 2, 2001, Atlanta Medical Executive A began
receiving the monthly e-mails from Atlanta Medical’s Women’s Services Department
(hereinafter “Women’s Services Department”) reporting the total number of
deliveries and Clinica deliveries for the prior month. The November 2, 2001
e-mail reported 240 total deliveries and 65 Clinica deliveries for October 2001.

59. In 2001, certain Atlanta Medical executives, including Atlanta Medical
Executive A, caused Tenet to pay approximately $527,346 to Clinica for the
benefit of Atlanta Medical, and the owners and operators of Clinica continued to
direct Clinica patients to deliver at Atlanta Medical.

60. In 2002, certain Atlanta Medical executives, including Atlanta Medical
Executive A, caused Tenet to pay approximately $658,335 to Clinica for the
benefit of Atlanta Medical, and the owners and operators of Clinica continued to
direct Clinica patients to deliver at Atlanta Medical.

 

9

--------------------------------------------------------------------------------

61. In or around May 2002, Atlanta Medical Executive A agreed to give Clinica a
translation services contract without conducting vendor due diligence to
determine whether Clinica was qualified to provide interpretation/translation
services in a hospital setting and without soliciting any proposals or bids from
other service providers.

62. On or about May 3, 2002, Atlanta Medical Executive A authorized Clinica to
provide “24/7 translation services” at Atlanta Medical effective May 1, 2002,
prior to seeking legal approval for the contract, in violation of then-existing
company policies and controls governing agreements with referral sources, such
as Clinica.

63. In or about May 21, 2002, an administrator at Atlanta Medical sent an e-mail
to Atlanta Medical Executive A, asking whether they should pay Clinica for
marketing services recorded on logs that were recently submitted for marketing
services dating back as far as September 2001, even though Atlanta Medical
“typically do[es] not honor them beyond 60 days after the end of the month to
which they apply.” In response, Atlanta Medical Executive A agreed to authorize
the payments to Clinica despite contrary policies and practices, stating: “Send
them down. We’ll approve and eliminate this when we move to a different
contract.”

64. On or about July 3, 2002, an employee of the Women’s Services Department, at
the direction of Atlanta Medical management, sent an e-mail to Atlanta Medical
Executive A, and others, reporting 243 total deliveries and 95 Clinica
deliveries for the month of June 2002.

65. On or about September 4, 2002, an employee of the Women’s Services
Department, at the direction of hospital management, sent an e-mail to Tenet
Hospital Executive A, and others, reporting 246 total deliveries and 90 Clinica
deliveries.

66. On or about November 25, 2002, Atlanta Medical Executive A sent an e-mail to
North Fulton Executive A, who had signed a services contract with Clinica,
asking, “How is [] Clinica working out for you? Do you know how many deliveries
they’re averaging?”

67. In 2003, certain Atlanta Medical executives, including Atlanta Medical
Executive A, caused Tenet to pay approximately $785,835 to Clinica for the
benefit of Atlanta Medical, and the owners and operators of Clinica continued to
direct Clinica patients to deliver at Atlanta Medical.

68. Each month from June 2003 to January 2004, an employee of the Women’s
Services Department, at the direction of hospital management, sent an e-mail to
hospital finance personnel and others, reporting the past month’s number of
total deliveries and Clinica deliveries as follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

May 2003

     242         94   

June 2003

     205         75   

July 2003

     256         79   

August 2003

     264         103   

September 2003

     275         95   

October 2003

     272         101   

November 2003

     246         97   

December 2003

     271         114   

 

10

--------------------------------------------------------------------------------

69. In or about February 2003, graduate medical education (GME) administrators
at Atlanta Medical conducted a site survey at the Residency Clinic and
identified the following issues in a letter to Clinica: the floors need to be
cleaned because they “remain unacceptably dirty,” the staff needs to ensure that
it is completely sterilizing instruments, and laboratory testing must be
conducted in a manner to ensure test results are accurate. Based on these items,
coupled with concerns about “staff safety, the inadequacies of the physical
plant, and the limited ability to continue growing at the current location,” the
administrators requested that Clinica move the Residency Clinic to a new
location.

70. In or around June 2003, Atlanta Medical’s contracts with Clinica
expired. Certain Atlanta Medical executives, including Atlanta Medical Executive
A, caused Tenet to continue paying Clinica each month despite the fact there was
no contract in place, in violation of then-existing company policies and
controls governing agreements with referral sources, such as Clinica.

71. In 2004, certain Atlanta Medical executives, including Atlanta Medical
Executive A, caused Tenet to pay approximately $761,610 to Clinica for the
benefit of Atlanta Medical, and the owners and operators of Clinica continued to
direct Clinica patients to deliver at Atlanta Medical.

72. Each month from February 2004 to January 2005, an employee of the Women’s
Services Department, at the direction of hospital management, sent an e-mail to
hospital finance personnel and others, and during some months, hospital
executives, including Atlanta Medical Executive A, reporting the past month’s
number of total deliveries and Clinica deliveries as follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

January 2004

     229         97   

February 2004

     221         98   

March 2004

     233         93   

April 2004

     253         98   

May 2004

     231         107   

June 2004

     225         88   

July 2004

     264         126   

August 2004

     230         88   

September 2004

     236         84   

October 2004

     248         102   

November 2004

     264         119   

December 2004

     249         106   

 

11

--------------------------------------------------------------------------------

73. On or about March 2, 2004, one of Clinica’s owners and operators sent an
e-mail to an administrator at Atlanta Medical stating: “In a recent discussion
with [translator], I found out that she has been translating written documents,
i.e. medical consents and other types of instructional info. I really think you
guys should probably use the company THC has contracted to handle medical
translation. I think it is Dr. Tango. Could you look into this
please. [Translator] is not certified in written medical translation or
documentation. I think this is outside our scope. We are happy to help with
basic stuff, but consents or anything that will become part of the permanent
part of the medical record should be evaluated. What are your thoughts.”

74. In or about February 2004, Tenet auditors conducted an audit of the
Residency Clinic. An audit report was created and sent to certain Atlanta
Medical executives, including Atlanta Medical Executive A, Tenet legal
personnel, and others. The report stated: “it does appear that the [prenatal
care] fees [at the Residency Clinic] may be high and not fair, especially
considering the patient population.”

75. In April 2004, Tenet auditors conducted another audit of the Residency
Clinic, and sent copies of the audit reports to certain Atlanta Medical
executives, including Atlanta Medical Executive A and Tenet legal personnel. The
report flagged that Atlanta Medical was continuing to pay Clinica under an
expired management contract, in violation of company policy.

76. In or about May or June 2004, Tenet legal personnel instructed certain
Atlanta Medical executives, including Atlanta Medical Executive A, to take
corrective action in relation to the expired contract. As a result, on or about
June 7, 2004, Atlanta Medical Executive A sent a letter to Clinica’s owners and
operators stating that Atlanta Medical was terminating the agreement effective
on or about September 6, 2004. In June 2004, Atlanta Medical notified Tenet that
it had sent the termination letter to Clinica and sent a copy of the termination
letter to Tenet, prompting Tenet legal personnel to close out Tenet’s compliance
matter, believing that the contract-expiration issue was resolved.

 

12

--------------------------------------------------------------------------------

77. Notwithstanding the contract termination letter, certain Atlanta Medical
executives, including Atlanta Medical Executive A, continued to cause Tenet to
pay Clinica for more than a year and a half after the effective termination date
set forth in Atlanta Medical’s June 7, 2004 letter. Between June 2003 and
December 2005, Atlanta Medical paid approximately $1.8 million to Clinica
without a valid contract in place, in violation of company policies and controls
governing disbursements to referral sources.

78. In 2005 specifically, certain Atlanta Medical executives, including Atlanta
Medical Executive A, caused Tenet to pay approximately $674,910 to Clinica for
the benefit of Atlanta Medical, and the owners and operators of Clinica
continued to direct Clinica patients to deliver at Atlanta Medical.

79. Each month from February 2005 to January 2006, an employee of the Women’s
Services Department, at the direction of hospital management, sent an e-mail to
a hospital executive, finance personnel and others, reporting the past month’s
number of total deliveries and Clinica deliveries as follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

January 2005

     274         116   

February 2005

     251         118   

March 2005

     235         97   

April 2005

     240         104   

May 2005

     278         101   

June 2005

     326         129   

July 2005

     311         128   

August 2005

     304         119   

September 2005

     306         108   

October 2005

     293         121   

November 2005

     292         105   

December 2005

     310         126   

80. In or around Spring 2005, Tenet’s Southern States Region retained Dr. Tango,
a company specializing in marketing to the Hispanic community, to perform an
operational assessment of the services provided to Atlanta Medical’s and North
Fulton’s Hispanic patients,

 

13

--------------------------------------------------------------------------------

including the interpreter services. In or around March 2005, Dr. Tango presented
its findings about Atlanta Medical’s interpreter services, among other items, to
hospital executives, including Atlanta Medical Executive A, in a written report
and PowerPoint presentation which stated: the Clinica interpreters do not
maintain utilization statistics, performance evaluations are not conducted for
the Clinica interpreters, and Clinica interpreters are not required to be
trained.

81. Dr. Tango recommended that Atlanta Medical require the Clinica interpreters
to maintain and provide utilization statistics to the hospital, that the
hospital conduct performance evaluations of the Clinica interpreters, and that
the hospital require Clinica to provide “only trained interpreters,” but Atlanta
Medical failed to meaningfully implement these recommendations.

82. On or about November 30, 2005, after receiving legal approval for a new
services contract with Clinica, an administrator at Atlanta Medical e-mailed the
new contract to one of Clinica’s owners to sign. The e-mail stated: “we had to
mess around with some of the numbers relative to each performance item, but the
total didn’t change much (actually went up a little).”

83. In 2006, certain Atlanta Medical executives, including Atlanta Medical
Executive A, caused Tenet to pay approximately $579,498 to Clinica for the
benefit of Atlanta Medical, and the owners and operators of Clinica continued to
direct Clinica patients to deliver at Atlanta Medical.

84. Each month from February 2006 to January 2007, an employee of the Women’s
Services Department, at the direction of hospital management, sent an e-mail to
hospital executives, including one to Atlanta Medical Executive A, finance
personnel, and others, reporting the past month’s number of total deliveries and
Clinica deliveries as follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

January 2006

     312         125   

February 2006

     301         114   

March 2006

     304         111   

April 2006

     300         121   

May 2006

     321         140   

June 2006

     327         146   

July 2006

     354         146   

August 2006

     378         158   

September 2006

     310         139   

October 2006

     364         162   

November 2006

     334         136   

December 2006

     328         149   

 

14

--------------------------------------------------------------------------------

85. In 2007, certain Atlanta Medical executives, including Atlanta Medical
Executive A, caused Tenet to pay approximately $476,378 to Clinica for the
benefit of Atlanta Medical, and the owners and operators of Clinica continued to
direct Clinica patients to deliver at Atlanta Medical.

86. Each month from February 2007 to January 2008, an employee of the Women’s
Services Department, acting at the direction of hospital management, sent an
e-mail to a hospital executive, finance personnel, and others, reporting the
past month’s number of total deliveries and Clinica deliveries as follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

January 2007

     320         144   

February 2007

     303         133   

March 2007

     333         134   

April 2007

     302         119   

May 2007

     294         131   

June 2007

     341         142   

July 2007

     371         162   

August 2007

     355         150   

September 2007

     353         132   

October 2007

     372         141   

November 2007

     400         169   

December 2007

     346         140   

87. In or around February 2007, Atlanta Medical Executive B asked one of the
hospital’s financial analysts to conduct a cost analysis on the Clinica
patients. On February 15,

 

15

--------------------------------------------------------------------------------

2007, the financial analyst e-mailed Atlanta Medical Executive B two separate
cost analyses, which both showed that the payments that Atlanta Medical received
from Georgia Medicaid covered its variable costs, and that the relationship was
profitable in 2004, 2005 and 2006.

88. In or around January 2008, Atlanta Medical Executive B sent a document
titled “AMC Close Notes December 2007” to Tenet Regional VP of Finance
Operations A, among others. In response to Tenet Regional VP of Finance
Operations A’s questions about a decrease in OB admissions, the document stated:
“[M]ost of the [obstetrics] volume currently is driven by our Clinica contract,
where we choose the physicians. We met with Clinica a few weeks ago to reassure
them of our commitment to the program and they have projected no volume changes
from their clinics.”

89. In 2008, certain Atlanta Medical executives, including Atlanta Medical
Executives A and B, caused Tenet to pay approximately $515,402 to Clinica for
the benefit of Atlanta Medical, and the owners and operators of Clinica
continued to direct Clinica patients to deliver at Atlanta Medical.

90. Each month from February 2008 to May 2008, an employee of the Women’s
Services Department, at the direction of Atlanta Medical management, sent an
e-mail to an executive, finance personnel, and others at Atlanta Medical,
reporting the past month’s number of total deliveries and Clinica deliveries as
follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

January 2008

     364         164   

February 2008

     337         145   

March 2008

     336         127   

April 2008

     315         142   

91. Each month from June 2008 to September 2008, an employee of the Women’s
Services Department, at the direction of Atlanta Medical management, sent an
e-mail to certain Atlanta Medical executives, including two e-mails to Atlanta
Medical Executives A and B, finance personnel, and others at Atlanta Medical,
reporting the past month’s number of total deliveries and Clinica deliveries as
follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

May 2008

     354         128   

June 2008

     314         90   

July 2008

     364         121   

August 2008

     338         100   

 

16

--------------------------------------------------------------------------------

92. From in or around September 2008 to in or around September 2010, certain
Atlanta Medical executives including Atlanta Medical Executive A, ensured that
Atlanta Medical provided an Atlanta Medical-employed or contracted nurse
practitioner to staff one of Clinica’s clinics free of charge.

93. On or about September 5, 2008, North Fulton Executive D sent Atlanta Medical
Executive B an e-mail with the subject “Clinica contract” stating, “I am
assuming you completed this contract renewal….We are about to begin. We talked
about what [Tenet Regional VP of Finance Operations A] wanted and what [Atlanta
Medical Executive A] wanted and we have the same issue. Were you able to make
any positive or significant change or did it get renewed as is?” Atlanta Medical
Executive B responded, “Renewed as i[s], per [Atlanta Medical Executive A].”

94. On September 25, 2008, Tenet Regional Senior Vice President of Operations A
(who was previously identified herein as North Fulton Executive A and who was
promoted to Tenet Regional SVP of Operations for the Southern States Region in
2006), sent an e-mail to Atlanta Medical Executive A, and a North Fulton
executive asking, “How have total Clinica volumes been doing at your two
hospitals over the past three months – please take a look at overall deliveries,
not %. Thanks!”

95. That same day, Atlanta Medical Executive A responded: “We have definitely
seen a marked decrease at AMC. We had 311 deliveries during June-August of 2008.
That compares to 455 for the same period in 2007 and 450 in 2006. June also
marked the time when Clinica fired [certain AMC credentialed obstetricians] so I
assumed the volume from the clinics they used to staff was being directed to
North Fulton. If NFMC has not seen an increase then we have a problem. Our
volume from January through May from Clinica exceeded our previous two year’s
volume. The drop off had all come in the last three months.”

96. On or about September 26, 2008, the North Fulton executive responded to
Tenet Regional SVP of Operations A’s e-mail: “June-August Clinica volumes for
2007 and 2008 were 349 and 340, respectively. Based on our flat volume and [the
decline in volume at Atlanta Medical Executive A’s hospital], this would lead us
to believe Clinica is diverting to another program. Our contract is up for
re-negotiation within the next 60-90 days. [North Fulton Executive D] and I are
going to handle this so we will ask some questions during our conversations with
[the owners and operators of Clinica].”

97. On or about September 29, 2008, Atlanta Medical Executive A sent an e-mail
to the owners and operators of Clinica stating: “I have seen a dramatic decrease
in the number of Clinica deliveries in the past three months compared to the
prior two years. In June-August 2006, we delivered 450 Clinica babies, in 2007
June-August, we delivered 455 Clinica babies. This year we delivered only 311
Clinica babies from June-August. I thought there may have been a slight shift in
volume to North Fulton due to physician staffing changes, but they report a
slight decline in volume June-August 2008 compared to 2007. This leads me to
conclude that either volume is going out of the system or Clinica’s overall
volume of patients has slowed considerably. I am very interested to hear your
thoughts and insights on what is happening.”

 

17

--------------------------------------------------------------------------------

98. Each month from October 2008 to January 2009, an employee of the Women’s
Services Department, acting at the direction of Atlanta Medical management, sent
an e-mail to hospital executives, including Atlanta Medical Executives A and B,
finance personnel, and others, reporting the past month’s number of total
deliveries and Clinica deliveries as follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

September 2008

     342         115   

October 2008

     350         101   

November 2008

     309         103   

December 2008

     306         100   

99. In 2009, certain Atlanta Medical executives, including Atlanta Medical
Executives A and B, caused Tenet to pay approximately $502,553 to Clinica for
the benefit of Atlanta Medical, and the owners and operators of Clinica
continued to direct Clinica patients to deliver at Atlanta Medical.

100. Each month from February 2009 to January 2010, an employee of the Women’s
Services Department, acting at the direction of hospital management, sent an
e-mail to hospital executives, including Atlanta Medical Executives A and B for
many months, finance personnel, and others, reporting the past month’s number of
total deliveries and Clinica deliveries as follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

January 2009

     332         115   

February 2009

     316         109   

March 2009

     257         95   

April 2009

     287         92   

May 2009

     341         110   

June 2009

     298         95   

July 2009

     337         136   

August 2009

     349         106   

September 2009

     335         109   

October 2009

     330         100   

November 2009

     307         86   

December 2009

     337         106   

 

18

--------------------------------------------------------------------------------

101. In 2010, certain Atlanta Medical executives, including Atlanta Medical
Executives A and B, caused Tenet to pay approximately $495,215 to Clinica for
the benefit of Atlanta Medical, and the owners and operators of Clinica
continued to direct Clinica patients to deliver at Atlanta Medical.

102. Each month from March 2010 to January 2011, an employee of the Women’s
Services Department, acting at the direction of hospital management, sent an
e-mail to hospital executives, including Atlanta Medical Executives A and B for
many months, finance personnel, and others, reporting the past month’s number of
total deliveries and Clinica deliveries as follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

February 2010

     277         71   

March 2010

     305         90   

April 2010

     295         85   

May 2010

     302         97   

June 2010

     291         78   

July 2010

     311         85   

August 2010

     300         103   

September 2010

     299         115   

October 2010

     331         106   

November 2010

     311         107   

December 2010

     323         98   

 

19

--------------------------------------------------------------------------------

103. In or around fall 2010, Clinica’s owners and operators divided the
then-existing Clinica clinics between them. Each owner created a successor
company. Clinica Owner A created Company A. Clinica Owner B created Clinica del
Bebe. Around the same time, Atlanta Medical’s and North Fulton’s contracts with
Clinica were under extension to allow time for the hospitals to negotiate new
contracts with Company A and Clinica del Bebe. Ultimately, Clinica Owner B’s
company, Clinica del Bebe, continued to do business with Atlanta Medical, and
Clinica Owner A’s company, Company A, continued to do business with North
Fulton.

104. From January 2011 to May 2011, when Clinica’s contract with Atlanta Medical
ended, certain executives at Atlanta Medical, including Atlanta Medical
Executives A and B, caused Tenet to pay approximately $234,600 to Clinica for
the benefit of Atlanta Medical, and the owners and operators of Clinica
continued to direct Clinica patients to deliver at Atlanta Medical.

105. Each month from February 2011 to April 2011, an employee of the Women’s
Services Department, acting at the direction of hospital management, sent
e-mails to hospital executives, including Atlanta Medical Executives A and B,
finance personnel, and others, reporting the past month’s number of total
deliveries and Clinica deliveries as follows:

 

Month/Year

   Total Deliveries      Clinica Deliveries  

January 2011

     324         87   

February 2011

     282         95   

March 2011

     273         91   

106. On or about March 1, 2011, an Atlanta Medical executive sent an e-mail to
the Women’s Services employee who sent the monthly delivery e-mails
inquiring: “is there a way to break out your referrals within clinica? There are
two organizations now that we receive business [Company A] and Clinica del
Bebe. Let me know if that is possible.” The employee responded: “the only way I
can separate out the number for [Company A] and Clinica Bebe is to have the
information written in the L&D Log Book. The numbers I report are taken directly
from the L&D Log Book and all information is written in by the L&D
secretaries/staff.”

107. On or about April 7, 2011, Atlanta Medical Executive B e-mailed the
hospital’s Monthly Volume Analysis for March 2011 to Tenet Regional VP of
Finance Operations A and others, including Atlanta Medical Executive A, which
stated: “OB deliveries finished behind budget (-26) but ahead YTD (+34). Even
though clinica has split ownership of the clinics, we have met with both owners
exploring opportunities for growth together. Finalizing agreement for
translation services with Clinica Del Bebe.”

108. In or around April 2011, the Women’s Services Department, at the direction
of hospital management, added a new column to the Labor & Delivery Log Book so
that the unit staff could record whether a patient came from Company A or
Clinica del Bebe, and the Women’s Services Department’s monthly delivery e-mails
began to report that information.

 

20

--------------------------------------------------------------------------------

109. On or about May 5, 2011, an employee of the Women’s Services Department,
acting at the direction of hospital management, sent an e-mail to hospital
executives, including Atlanta Medical Executives A and B, and others, reporting:

 

Month/Year

   Total Deliveries      CDLB Deliveries      Company A Deliveries  

April 2011

     285         60         26   

110. In response, Atlanta Medical Executive A forwarded this e-mail to Atlanta
Medical Executive B and to the hospital’s contract administrator stating, “[s]ee
significant number of babies coming from [Clinica Owner A]’s clinic ([Company
A]). We need to move on that agreement or risk him pressuring doctors to deliver
at another hospital.”

111. On or about May 11, 2011, Atlanta Medical Executive A sent an e-mail to
North Fulton Executive C stating, in pertinent part, “I will ask [my assistant]
to set up a brief call for you and I to discuss the two Clinica organizations,
sometime next week. I have a suggestion for how we might solve the issue of some
of ‘[Clinica Owner B’s]’ clinics delivering at NFRH and some of ‘[Clinica Owner
A’s]’ clinics delivering at AMC.”

112. On or about June 13, 2011, North Fulton Executive D sent an e-mail to
Atlanta Medical Executive A stating, “I have talked to [Clinica Owner A] several
times since our conversation about contracting with [Clinica Owner B and Clinica
del Bebe] and each time [Clinica Owner A] tells me that he is not contracting
with AMC. He appears determined not to cross lines with [Clinica Owner B]. Have
you been able to contract with him?” After the Atlanta Medical contract
administrator confirmed that a proposed Atlanta Medical contract with Company A
had been approved and mailed to Clinica Owner A for signature, but the hospital
had received no response, North Fulton Executive D responded, “[w]hen and if he
signs, please send me a copy to use as leverage.”

113. On or about August 4, 2011, Atlanta Medical Executive A sent an e-mail to
North Fulton Executive D, and copied Atlanta Medical Executive B, stating, “how
are you guys doing with your Clinica volume? Ours is down quite a bit this past
quarter. I was wondering if [Clinica Owner A] is winning the [] War of if we are
both down.” North Fulton Executive D responded, “[w]e were up about 20 Clinica
cases in July compared to what we ran per month during 1st quarter. All other
volume was down significantly though.”

114. On or about November 4, 2011, Atlanta Medical Executive B e-mailed the
hospital’s Monthly Volume Analysis to Tenet Regional VP of Finance Operations A
and others, including Atlanta Medical Executive A. In the “Admissions Variances
Explanations” section, the document states: “Clinica volume continues to decline
due to immigration law enactment. To mitigate loss within OB, a contract with
[Company A] is in process, we already have a contract with [Clinica del Bebe].”

115. From June 2011 to December 2011, certain Atlanta Medical executives,
including Atlanta Medical Executives A and B, caused Tenet to pay approximately
$154,059 to Clinica del Bebe for the benefit of Atlanta Medical, and the owner
and operator of Clinica del Bebe directed Clinica del Bebe patients to deliver
at Atlanta Medical.

 

21

--------------------------------------------------------------------------------

116. From June 2011 to January 2012, an employee of the Women’s Services
Department, acting at the direction of hospital management, sent e-mails to
hospital executives, including Atlanta Medical Executives A and B, finance
personnel, and others, reporting the past month’s total deliveries and Clinica
del Bebe deliveries as follows:

 

Month/Year

   Total Deliveries      CDLB Deliveries  

May 2011

     278         48   

June 2011

     291         57   

July 2011

     292         56   

August 2011

     288         64   

October 2011

     251         43   

November 2011

     298         45   

December 2011

     281         43   

117. On or about October 27, 2011, Atlanta Medical Executives A and B caused
Tenet to pay $26,957.70 to Clinica del Bebe for the benefit of Atlanta Medical.

118. On or about November 22, 2011, Atlanta Medical Executives A and B caused
Tenet to pay $25,972.20 to Clinica del Bebe for the benefit of Atlanta Medical.

119. On or about December 29, 2011, Atlanta Medical Executives A and B, caused
Tenet to pay $22,818.60 to Clinica del Bebe for the benefit of Atlanta Medical.

120. From January 2012 to June 2012, Atlanta Medical, Executives A and B, caused
Tenet to pay approximately $143,276 to Clinica del Bebe for the benefit of
Atlanta Medical, and the owner and operator of Clinica del Bebe directed Clinica
del Bebe patients to deliver at Atlanta Medical.

121. From February 2012 to June 2012, an employee of the Women’s Services
Department, acting at the direction of hospital management, sent e-mails to
hospital executives, including Atlanta Medical Executives A and B, finance
personnel, and others, reporting the past month’s total deliveries and Clinica
del Bebe deliveries as follows:

 

Month/Year

   Total Deliveries      CDLB Deliveries  

January 2012

     283         41   

February 2012

     224         26   

March 2012

     248         24   

April 2012

     241         23   

May 2012

     244         19   

 

22

--------------------------------------------------------------------------------

122. From in or around June 2001 to in or around June 2012, certain Atlanta
Medical executives, including Atlanta Medical Executives A and B, authorized
payments to Clinica (1) without a valid contract in place, (2) without
supporting documentation or (3) with inadequate documentation, in violation of
then-existing company policies and controls governing the disbursement of monies
to referral sources, such as Clinica.

123. From in or around July 2008 to in or around October 2011, in connection
with Tenet’s submission of its annual reports and certifications to HHS-OIG
under the CIA, certain Atlanta Medical executives, including Atlanta Medical
Executives A and B, certified each quarter that they had accurately and honestly
completed quarterly certifications that required these executives to disclose,
among other things, reportable events under the CIA.

124. On or about July 5, 2012, Atlanta Medical Executive A sent an e-mail to the
owner of Clinica del Bebe stating: “the OIG has made numerous documentation
requests of us in their subpoena. One of their requests was for documentation of
the time the translators worked here at AMC. Apparently, we did not have them
clock in or sign time sheets. I was wondering if you had any documentation of
their time that you perhaps used as a basis to pay them? I am not asking that
you provide it to us at this time, I am just wondering if some documentation of
the translators hours worked exists. Please let me know.”

Specific Conduct at North Fulton

125. In or around August 2001, a “North Fulton Regional Hospital Business Plan
Proforma” was generated at North Fulton. The pro forma referenced “Clinica De La
Mama” as “Initiative #2.” The pro forma projected, in FY 2002 alone, some $2.5
million in Medicaid revenue, and $1.263 million in expected Medicare DSH
revenue, to North Fulton from admissions and associated billings and payments
flowing from Clinica referrals. Moreover, a portion of the pro forma titled
“Discussion and Notes Relating to Financial Assumptions” provided, in relevant
part, “Clinica De La Mama will begin directing admissions [] to NFRH upon
completion of the contract. They have stated that they will shift 100% of their
volume from Northside to NFRH which would bring an estimated 1,000-1,200
deliveries in the first year.” The pro forma further notes that “[a]ll
deliveries will be Medicaid.”

126. In 2001, certain North Fulton Executives, including North Fulton Executive
A, caused Tenet to pay approximately $103,480 to Clinica for the benefit of
North Fulton, and the owners and operators of Clinica directed Clinica patients
to deliver at North Fulton.

 

23

--------------------------------------------------------------------------------

127. In or around June 2002, a “Retroactive Analysis of Business Plan” was
generated at North Fulton addressing “Clinica De La Mama.” In the section of the
document titled “Findings,” the document stated: “The hospital received huge
increases in the Medicaid DRG rates effective 7/1/02 and Medicaid payments are
extremely generous compared to the Managed Care plans.” The document
concluded: “Clinica LaMama is very profitable to North Fulton. This is primarily
due to the extremely high Medicaid reimbursement rates for both mother & baby
DRG’s that were effective 7/1/02.”

128. In April 2002 a doctor formerly affiliated with Clinica wrote to North
Fulton Executive A: “I want to thank you for your time and patience allowing me
to vent my feeling last Wednesday. As you recalled, I called you about a patient
whom I had scheduled for surgery at Northside Hospital two days previously and
who than was diverted to North Fulton Hospital by the Clinica de la Mama for
care up there. I felt those types of activities represented poor medical care
since the continuity of care and the doctor/patient relationship was being
disrupted. I also questioned the ethics of such activities. I was also concerned
about the intent of these activities by the Clinica since there appeared to be
some form of indirect linkage between the services the Hispanic Medical
Management group were providing you and patient referrals. Essentially, we had
been told that if we did not move our practice to North Fulton Hospital that we
would no longer be permitted to participate in the activities of the Clinic.”

129. In December 2002, a Women’s Services Department employee at North Fulton
wrote a memorandum to North Fulton Executive A regarding “Clinica Volume.” The
memo provided the volume of total deliveries and the volume of deliveries by
doctors affiliated with Clinica at North Fulton, and the volume of Clinica
deliveries at Atlanta Medical as follows:

 

NFRH Month

   Total
Deliveries      [Clinica
Affiliated
Doctor A]      [Clinica
Affiliated
Doctor B]      AMC    Clinica
Deliveries  

April

     93         55         0       FY01      524   

May

     63         34         0       FY02      788   

June

     72         36         0       June      95   

July

     90         40         1       July      119   

August

     109         45         18       August      90   

September

     105         35         29       September      63   

October

     108         28         21         

130. On or about November 25, 2002, Atlanta Medical Executive A sent North
Fulton Executive A an e-mail asking: “How is [] Clinica working out for you? Do
you [know] how many deliveries they’re averaging?”

 

24

--------------------------------------------------------------------------------

131. In 2002, certain North Fulton Executives, including North Fulton Executive
A and North Fulton Executive B, caused Tenet to pay approximately $562,260 to
Clinica for the benefit of North Fulton, and the owners and operators of Clinica
continued to direct Clinica patients to deliver at North Fulton.

132. In 2003, certain North Fulton Executives, including North Fulton Executive
A and North Fulton Executive B, caused Tenet to pay approximately $463,840 to
Clinica for the benefit of North Fulton, and the owners and operators of Clinica
continued to direct Clinica’s patients to deliver at North Fulton.

133. In August of 2004, one of the owners and operators of Clinica sent a fax to
North Fulton Executive B. The fax cover page stated: “I have run the totals for
the remainder of this year and included January 2005. Currently, the scheduled
deliveries are as follows:

 

August

     50   

September

     57   

October

     52   

November

     48   

December

     45   

January

     23      

 

 

 

Total

     275      

 

 

 

The numbers for the last 3 months will increase as new patients continue to be
assigned. We are also anticipating [Doctor C] joining us in the near future
which will also increase the Oct-Jan figures as we assign his patients. I
believe [Doctor C] will be comfortable doing 30-35 deliveries per month with us.
Of course, [Doctor A] would like to increase his load to between 60-70
deliveries per month. As soon as I have some indication that he has a provider
joining him in the near term, we will begin to increase him to the level he has
requested ….. I am having the list of Scheduled Deliveries delivered to you this
week via [a Clinica employee] from our Roswell clinic. If you have any questions
when you receive it, please call me….I have also attached the log for the second
half of July. When the check arrives please call me and I will come out
personally to get it so we can talk and I can give you an update on physician
activity. We will update the Scheduled Delivery logs again in 4-6 weeks.”

134. In 2004, certain North Fulton Executives, including North Fulton Executive
A and North Fulton Executive B, caused Tenet to pay approximately $462,014 to
Clinica for the benefit of North Fulton, and the owners and operators of Clinica
continued to direct Clinica patients to deliver at North Fulton.

135. In 2005, certain North Fulton Executives, including North Fulton Executive
A and North Fulton Executive B, caused Tenet to pay approximately $424,537 to
Clinica for the benefit of North Fulton, and the owners and operators of Clinica
continued to direct Clinica patients to deliver at North Fulton.

 

25

--------------------------------------------------------------------------------

136. In or around Spring 2005, Tenet’s Southern States Region retained Dr.
Tango, a company specializing in marketing to the Hispanic community, to perform
an operational assessment of the services provided to North Fulton’s and Atlanta
Medical’s Hispanic patients, including the interpreter services. In or around
April 2005, Dr. Tango presented its findings about North Fulton’s interpreter
services, among other items, to hospital executives, including North Fulton
Executives A and B, in a written report and PowerPoint presentation which
stated: the Clinica interpreters do not maintain utilization statistics,
performance evaluations are not conducted for the Clinica interpreters, and the
Clinica interpreters are not required to be trained.

137. Dr. Tango recommended that North Fulton require the Clinica interpreters to
maintain and provide utilization statistics to the hospital, that the hospital
conduct performance evaluations of the Clinica interpreters, and that the
hospital require Clinica to provide “only trained interpreters,” but North
Fulton failed to meaningfully implement these recommendations.

138. On or about February 13, 2006, the contract administrator at North Fulton
sent an e-mail to North Fulton Executive A notifying him of the results of her
efforts to verify whether Clinica had in fact performed the “marketing items
shown in the Clinica logs from October 2005 to date,” as follows:

 

  •   “Mini Health Fair-Chamblee Heights, 10/2: The only Chamblee Heights I find
a listing for is Chamblee Heights Apartments on Chamblee Dunwoody Road. Is this
in our service area?

 

  •   Mini Health Fair – 1st Hispanic Baptist Church, 10/9: The only listings I
am able to find are in Canton, GA and Gainesville, GA

 

  •   Meeting – Royal Bus Service, 10/9: I do not find a listing for this
company.

 

  •   Mini Health Fair – Woodcreek Apts., 10/22 and 11/5: Property manager is
David. Not in today, I will need to tr[]y again.

 

  •   Mini Health Fair – Greenhouse Apts., 11/12: There are two listings – one
on Alpharetta Highway and one on Holcomb Bridge. I called both; no health fair
was conducted at either location.

 

  •   Mini Health Fair – St. Jude Catholic Church, 11/20: The only listing I
find is in Glennville, GA.

 

  •   Mini Health Fair – Iglesia de los Hispanos, 11/27: Listing not found. A
similar listing of Iglesa de DIOS Hispana de Atlanta was found located on
Chamblee Dunwoody Road.

 

  •   Mini Health Fair – Aspen Point, 12/10: Spoke to Mariana, no health fair
was conducted.

 

26

--------------------------------------------------------------------------------

  •   Mini Health Fair – Concepts 21, 12/17: Spoke to Robbie; no health fair was
conducted

 

  •   Mini Health Fair – The Crossing at Woodbridge, 12/30: No health fair was
conducted.

 

  •   Mini Health Fair – Santa Fe; I do not find a listing.

 

  •   Mini Health Fair – Eagle Crest, 1/22: Spoke to Betty, no health fair was
conducted.

 

  •   Mini Health Fair – Roswell Commons, 1/28: Roswell Commons townhomes is not
a possible location; I also checked the phone directory and the web for a
listing for Roswell Commons to determine if there was another Roswell Commons
other than where I live; I did not find a listing. [One of Clinica’s owners and
operators] has now changed Roswell Commons to Casa del Pueblo Latino
Marketplace: Two listings in the Roswell phone directory: (1) Casa del Pueblo –
a recording comes on that says “the number you have dialed is not permitted”.
(2) Casa del Pueblo Check Cashing (same address as #1) – no health fair was
conducted.”

The contract administrator then stated, “[p]lease advise if I should place any
other calls.”

139. In 2006, certain North Fulton executives, including North Fulton Executive
A, caused Tenet to pay approximately $428,420 to Clinica for the benefit of
North Fulton, and the owners and operators of Clinica continued to direct
Clinica patients to deliver at North Fulton. In 2006, North Fulton Executive A
was promoted to the position of Tenet Regional SV P of Operations for the
Southern States Region.

140. In 2007, certain North Fulton executives and Tenet Regional SVP of
Operations A caused Tenet to pay approximately $435,622 to Clinica for the
benefit of North Fulton, and the owners and operators of Clinica continued to
direct Clinica’s patients to deliver at North Fulton.

141. In 2008, certain North Fulton executives, including North Fulton Executive
D, caused Tenet to pay approximately $441,938 to Clinica for the benefit of
North Fulton, and the owners and operators of Clinica continued to direct
Clinica patients to deliver at North Fulton.

142. On or about March 25, 2008, North Fulton Executive D prepared a document
titled “North Fulton Regional Hospital OB Product Line–Profitability February
2008 YTD.” The document contained a separate “Clinica Only Analysis,” showing
expected net revenue of $829,723 for the Clinica patients (defined in the
analysis as all Medicaid and uninsured patients), and showing that the revenues
that North Fulton received for these patients exceeded its costs.

143. On or about March 31, 2008, Tenet Regional VP of Finance Operations A
e-mailed North Fulton Executive D asking “can you tell me how much we pay
clinica at North Fulton and approx. how many cases they handle”? North Fulton
Executive D responded, “1. In 2007, our liability to Clinica was $435,662.49
(including the December 2007 accrual). Our estimated liability for 2008 is
$452,304. The difference is due to Clinica not providing the required hours in
the first part of 2007. 2. Total Admissions = 1418 (Let me know if you need a

 

27

--------------------------------------------------------------------------------

birth only number and we will calculate).” Tenet Regional VP of Finance
Operations A responded, “This is rather pricey. With the changes in Medicaid
reductions do we still make money after considering all of our costs, including
med mal?”

144. In response, on or about April 1, 2008, North Fulton Executive D e-mailed a
document to Tenet Regional VP of Finance Operations A who responded, “I cannot
see the attachment at the moment …. but want to take a hard look at the clinica
benefit as compared to cost. I am not the biggest fan of MEP but I have to
believe that we can do this (net of interpretation costs) at a lower cost. We
are paying more than 240k at Hilton Head for 400 deliveries….”

145. On or about April 7, 2008, North Fulton Executive D directed a North Fulton
employee to send his version of a document titled “North Fulton Close Notes,
March 2008” to executives at Tenet’s Southern States Region. The “Volume”
section of the document, stated “[a]dmissions shortfall of 63 ….” and asked,
“Are there Clinica issues? Are we able to track all patients in their program to
ensure that they are delivering at North Fulton?” The response was: “We have
continually contacted Clinica and are verifying through them whether scheduled
patients actually deliver within the given scheduled month. Unfortunately, at
this time we have to rely on them for scheduled v. delivered data. We are
scheduling a face to face meeting because my suspicion is that there is a slight
shift elsewhere. Concerned that there is an issue with one of our physicians.
Both clinica docs are looking to expand beyond clinica and this may have had a
relationship impact. Business Development director has spoken to both docs who
have not indicated that but there is still a concerned that needs to be address
with clinica to confirm or rule out.”

146. On or about June 2, 2008, North Fulton Executive D sent an e-mail to
certain North Fulton executives and others attaching a document outlining a new
process being implemented through Tenet’s Patient Financial Services’ Medical
Eligibility Program (MEP), in which MEP would follow-up on Clinica’s Medicaid
eligibility work. North Fulton Executive D explained that he had cleared it
through Clinica and that he had “initiated this because [he] found multiple
deliveries were being denied Medicaid eligibility due to lack of applications or
information which should never happen given that we have Clinica, MEP & in-house
interpreters. Eligibility denials were approx. $170k for NFRH in 2007.”

147. On or about September 5, 2008, North Fulton Executive D sent Atlanta
Medical Executive B an e-mail with the subject “Clinica contract” stating, “I am
assuming you completed this contract renewal….We are about to begin. We talked
about what [Tenet Regional VP of Finance Operations A] wanted and what [Atlanta
Medical Executive A] wanted and we have the same issue. Were you able to make
any positive or significant change or did it get renewed as is?” Atlanta Medical
Executive B responded, “Renewed as i[s], per [Atlanta Medical Executive A].”

148. On or about September 16, 2008, a North Fulton employee sent an e-mail to
North Fulton Executive D with the subject “[h]ere’s the list of Clinica issues
or opportunities for improvement.” The attached document identified the
following “opportunities for improvement involving issues with Clinica Staff,”
among others:

 

  •   “Timeliness – in reporting to the ED once they receive call for
assistance.”

 

28

--------------------------------------------------------------------------------

  •   “No sense of urgency-Mommy has been here for several hours and no effort
is being made to secure consents or updated information.”

 

  •   “No sense of ownership – When you try to investigate who in Clinica is
responsible for obtaining Admissions paperwork, Clinica staff on duty doesn’t
know anything about a packet. They need a better communication system among
themselves.”

 

  •   “HIPPA Issues – Staff states that when Clinica staff is aware of a patient
they know in the ER. They have been requesting Hospital Registration to access
their chart in the A4 system. One ER staff member stated that they have been
very persistent in their requests.”

 

  •   “Emtala issues – in the past it has been reported that Clinica staff told
incoming ER patients that present with children, to leave and take the children
to Children’s healthcare and not have them seen at NFRH.”

 

  •   “When they state they are too busy to help, we present to L&D and they
will be in the break room, it appears they are not assisting L&D or any
patients.”

 

  •   “Staff reported that the Clinica staff, while interpreting are tell the
patients that they do not have to pay for services rendered at the time of the
procedure or visit.”

 

  •   “On Saturday morning at 3:22 a.m., I observed both the Clinica
interpreters asleep at their desk. One was wrapped in a blanket with her head on
the desk and the other had her head titled back in the chair. A pair of nurses
(from L&D I think) saw me watching them sleep and called the interpreter phone
to wake them up.”

 

  •   “Eating at the front desk in the ER. Not sure if they are aware of our
policies and procedures. When questioned about this, Clinica stated they never
get breaks or lunch.”

 

  •   “No consistency in schedule of Clinica at the ER front desk – ER clinical
staff has been looking for assistance from Clinica Interpreters.”

 

  •   “Clinica Interpreter was seen talking on the phone, chatting and laughing
with other interpreters at the front desk, being extremely loud and disruptive
while patients were presenting to the ER front desk for registration.”

 

  •   “Not responsive to patients, family members or visitors who present to the
ED front desk. Some are reluctant to look up from their magazines and to
patients may appear as hospital staff in clinical attire that have no
functions.”

 

29

--------------------------------------------------------------------------------

149. A few days later, another North Fulton employee sent an e-mail to North
Fulton Executive D and others at North Fulton stating, “in preparation of your
upcoming Clinica contract negotiations, please note that I have attached a
summary from a recent meeting in which we discussed issues related to their
interpreters.” The attached document added the following additional
“opportunities for improvement” to the list that was sent to North Fulton
Executive D on September 16, 2008:

 

  •   “Failure to follow the Tenet mandate regarding minimum age.”

 

  •   “Failure to insure and present competency documentation.”

 

  •   “Neglect to provide appropriate supervision.”

 

  •   “Failure to provide coverage in all locations (i.e. NHE).”

 

  •   “Failure to follow appearance standard policy.”

 

  •   “ED needs coverage during high volume periods, from 11:00 a.m. – 11:00
p.m. Clinica staffs from 11:00 a.m. – 6:00 p.m. because allegedly they can not
find any employees who are willing to work until 11:00 p.m.”

 

  •   “Clinica staff in the ED come and go during their shift without telling
anyone where they are going or how long they will be out of the department.”

150. On or about September 17, 2008, a North Fulton employee sent North Fulton
Executive D an e-mail attaching “a profitability analysis for Clinica de la Mama
patients.”

151. On September 25, 2008, Tenet Regional SVP of Operations A sent an e-mail to
Atlanta Medical Executive A, and a North Fulton executive asking, “How have
total Clinica volumes been doing at your two hospitals over the past three
months – please take a look at overall deliveries, not %. Thanks!”

152. That same day, Atlanta Medical Executive A responded: “We have definitely
seen a marked decrease at AMC. We had 311 deliveries during June-August of 2008.
That compares to 455 for the same period in 2007 and 450 in 2006. June also
marked the time when Clinica fired [certain AMC credentialed obstetricians] so I
assumed the volume from the clinics they used to staff was being directed to
North Fulton. If NFMC has not seen an increase then we have a problem. Our
volume from January through May from Clinica exceeded our previous two year’s
volume. The drop off had all come in the last three months.”

153. On or about September 26, 2008, a North Fulton executive responded to Tenet
Regional SVP of Operations A’s September 25th e-mail: “June-August Clinica
volumes for 2007 and 2008 were 349 and 340, respectively. Based on our flat
volume and [the decline in volume at Atlanta Medical Executive A’s hospital],
this would lead us to believe Clinica is diverting to another program. Our
contract is up for re-negotiation within the next 60-90 days. [North Fulton
Executive D] and I are going to handle this so we will ask some questions during
our conversations with [the owners and operators of Clinica].”

 

30

--------------------------------------------------------------------------------

154. On or about October 13, 2008, a North Fulton employee sent an e-mail to
North Fulton Executive D and others at North Fulton asking, “May I ask if you
all me[t] with Clinica and how it went? Was competency for interpreters
discussed?” North Fulton Executive D responded, “[w]e have not had the meeting.”

155. On or about November 24, 2008, North Fulton’s Chief Human Resources Officer
sent an e-mail to North Fulton Executive D and others at North Fulton with the
subject line “Interpreter Competency Update.” The e-mail advised: “Please note
that we are moving ahead with our interpreter competencies. We have tentatively
scheduled a competency day on December 13. Are we set to go with Clinica? Have
they been informed that we will be testing competencies and if one of their
interpreters does not pass, he/she will not be permitted to work at this site?
From what I hear, the Clinica interpreters will have difficulties passing our
assessment.”

156. That same day, North Fulton Executive D forwarded this e-mail to another
North Fulton executive stating, “I would wait on this. [A North Fulton
executive] and I spoke to [one of the owners and operators of Clinica] the other
day and she did not appear agreeable to this. It is not in the current contract
and we have not negotiated the new contract. [One of the owners and operators of
Clinica] stated that the information was available and that we should contact
them for the information. I believe we should attempt this once more both
verbally and in a written notification before we move forward.”

157. In or around December 2008, North Fulton employees prepared a document
titled “Plan for Interpreter Competencies” which stated that North Fulton would
“[o]btain competencies from Clinica for Clinica interpreters” and that it would
“[p]artner with Tenet sister facility, South Fulton’s lead interpreter to assess
competencies for interpreters at North Fulton.” Ultimately, North Fulton
required all staff and volunteers who wanted to perform Spanish interpretation
at the hospital to undergo a competency evaluation, but never required the
Clinica interpreters to do so.

158. In 2009, certain North Fulton Executives, including North Fulton Executive
C and North Fulton Executive D, caused Tenet to pay approximately $452,304 to
Clinica for the benefit of North Fulton, and the owners and operators of Clinica
continued to direct Clinica’s patients to deliver at North Fulton.

159. In or around January 2009, an employee in North Fulton’s business office
forwarded an e-mail to North Fulton Executive D concerning a “newborn account
review” which stated that “of the Clinica accounts, none were missed referrals.
They were all cancelled to self pay because Clinica was not able to obtain
eligibility for whatever reason and we cancelled the account.” North Fulton
Executive D responded, “Why can Clinica not obtain eligibility? That is the
question we need answered.”

160. On or about March 4, 2009, North Fulton’s Chief Human Resources Officer
sent an e-mail to North Fulton Executive D proposing that certain language be
added to the staff requirements part of Clinica’s contract, including, among
other items, a new requirement that “[t]he Hospital shall assess the competency
of all staff utilizing the Hospital’s standard interpreter competency assessment
process and forms.”

 

31

--------------------------------------------------------------------------------

161. In or around March 2009, North Fulton Executive D sent a letter to one of
the owners and operators of Clinica stating: “Attached is a list representing
the patient accounts that were changed from Clinica to private pay from October
2007 to October 2008. These 39 accounts total $107,917 in lost payments to our
facility. In our review of these accounts we found there was either no
application or file or the necessary verifications for application approval had
not been obtained. In June 2008, we implemented a process that includes
reconciliation of Clinica accounts by the MEP staff. Efforts to thoroughly
complete this reconciliation have revealed issues with the timeliness of Clinica
follow up, answers to status questions are not readily available, and there
seems to be a lack of urgency to resolve aged accounts. Is it possible for you
to provide more resources to assist with this process? …. In general, an overall
improvement in communication related to pending accounts.”

162. On or about August 11, 2009, North Fulton Executive D sent an e-mail to
certain clinical employees at North Fulton asking if North Fulton needed to keep
certain services in the new Clinica contract. The Director of Women’s Health
Services responded, in pertinent part, as follows (in italics):

 

  •   “a. Company shall provide pre-natal work-up on mother at thirty-two (32)
weeks to Hospital’s Women’s Health Director. I am surprised to see that they are
charging us for this service, as all other doctors, physician groups, provide
this information to us. We simply provide them with the ‘pre-natal work up
packets.’ They fill them out and fax them to us when the mother is thirty-two
(32) weeks.”

 

  •   “b. Company shall provide complete information from Company’s records to
Hospital’s Admissions Department for pre-registration of each patient.” Again
all other physicians and doctor groups do this and there is no fee attached, but
the answer would be yes.”

The Director of Women’s Services further noted, “hopefully this information will
help you with the contract. I just don’t understand the charge of 140
hours/month at $30/hour $4,200 per month. I don’t understand that there should
be a contract fee for items A and B.”

163. On or about September 25, 2009, a North Fulton employee sent North Fulton
Executive D an e-mail stating “below are the admit attributed to Clinica, these
would be almost entirely deliveries”:

 

Jan 09

     115   

Feb 09

     111   

Mar 09

     119   

Apl 09

     97   

May 09

     103   

Jun 09

     114   

Jul 09

     141   

Aug

     163   

 

32

--------------------------------------------------------------------------------

164. On or about October 6, 2009, one of the owners and operators of Clinica
e-mailed comments on the draft for the new contract to North Fulton Executive D.
One of the comments was on the section entitled “Company Staff Evaluation and
Competency” which provided that the Hospital’s Women’s Health Director would
provide the company with an evaluation of each of the company staff’s
performance and the Hospital would assess the competency of all staff utilizing
the Hospital’s standard interpreter competency assessment and forms. Clinica
responded, “[W]e would like to remove this section as it appears redundant.
[Clinica] is already performing these items.” After proposing that North Fulton
keep the same number of interpreter hours and the management fee and that it not
cut the prenatal education component from the contract, the Clinica owner and
operator further noted, “I looked at the Expected Delivery Logs for the rest of
the year and the numbers are improving. October has 120 scheduled, November has
130 scheduled and December 90. I value our relationship with North Fulton and
look forward to talking with you soon.”

165. The next day, North Fulton Executive D forwarded the e-mail he received
from one of the owners and operators of Clinica to the North Fulton contract
administrator instructing, “[l]ooks like we need to make the below changes for
Clinica.”

166. On or about October 19, 2009, North Fulton’s contract administrator
requested approval for a one-month term extension of Clinica’s contract to allow
North Fulton Executive D additional time to re-present the contract draft to
Clinica for final review. North Fulton Executive D sent an e-mail to Tenet
Regional VP of Finance Operations A stating, “FYI..I have only been able to
squeeze 3k/month out of them so far,” and Tenet Regional VP of Finance
Operations A responded, “I think we could hire a couple of translators at the
call center…….We are getting hosed at Hilton head as well.”

167. On or about November 13, 2009, Tenet Regional VP of Finance Operations A
sent an e-mail to North Fulton Executive D telling him to cut the proposed
Clinica contract to one year instead of the proposed two. North Fulton Executive
D instructed North Fulton’s contract administrator to make the revision,
prompting North Fulton Executive C to ask, “[h]ow is [one of the owners and
operators of Clinica] going to feel about this?” North Fulton Executive D
replied, in relevant part, “Good question. [S]he may have questions before
signing but I think we need to get it through region and then have a good story.
I know [one of the owners and operators of Clinica] will not go for letting the
translation go[.]”

168. On or about November 17, 2009, Tenet Regional VP of Finance Operations A
sent an e-mail to North Fulton Executive C and others suggesting the possibility
of “gain[ing] translation services internal to ou[r] company, though not a
replacement for Clinica, it could start laying the groundwork for an eventual
exit strategy for Clinica.”

 

33

--------------------------------------------------------------------------------

169. North Fulton Executive C responded to Tenet Regional VP of Finance
Operations A and cc’ed North Fulton Executive D on the e-mail: “glad you are
exploring this. But Joint Commission requirements now say that all translators
used for patients must be certified in medical translation. There are many
companies who do this, one which we used at [Fountain Valley Regional Hospital]
(which had lots of language issues). If we think we can get Clinica to send us
the business and we can get the translation services elsewhere, I’m all for it.
I agree with your assessment of the way they hold us hostage and don’t like it.
[North Fulton Executive D] is working to reassess this line of business in the
overall, including the NICU spin off. But backfilling these admits and the
EBITDA, small as it may be, probably can’t happen for a while, though we
probably need a plan.”

170. In 2010, certain North Fulton Executives, including North Fulton Executive
C and North Fulton Executive D, caused Tenet to pay approximately $416,710 to
Clinica for the benefit of North Fulton, and the owners and operators of Clinica
continued to direct Clinica’s patients to deliver at North Fulton.

171. On or about February 4, 2010, a North Fulton employee sent an e-mail to her
supervisor reporting that her staff had received several recent complaints about
the “behavior and demeanor of the translators seated at the ED front desk.” The
supervisor forwarded the e-mail to North Fulton Executive D; the email gave an
example of a patient’s husband complaining about the socializing that three of
the translators were engaged in while appearing to be on duty and stating that
he felt that it was “very inappropriate for them to be ‘laughing & talking’ near
the triage area.”

172. On or about May 5, 2010, Tenet Regional VP of Finance Operations A sent
North Fulton Executive D an e-mail attaching a document titled, “North Fulton
Close Notes 04-2010” noting “[o]nly has volume questions on it thus far.” In the
“Volumes” section of the document, North Fulton was asked: “[n]oting that
Clinica volumes continue to be down, what can be done with the Clinica Contract
to reduce this fixed cost?”

173. On or about May 2010, a North Fulton employee sent an e-mail to North
Fulton Executive C, North Fulton Executive D, and others at North Fulton
summarizing issues with the Clinica interpreters to be raised at an upcoming
meeting with Clinica, including the interpreters (1) “not remaining in their
assigned work areas”, (2) “taking their lunch break together and leaving their
assigned areas with no coverage”, (3) “talk[ing] on their personal cell phones
at the Nurses’ Station and at the ED front desk”, (4) “us[ing] hospital
computers to check personal emails”, (5) “read[ing] magazines, socializ[ing],
etc. in public areas”, (5) “watch[ing] TV in patient rooms while on duty”, and
(6) being “tardy for their work shifts.”

174. On or about August 12, 2010, a North Fulton employee sent an e-mail to
North Fulton Executives C and D stating, in relevant part, “[one of Clinica’s
owners and operators] should not [be] going on the unit. We should not make an
exception for him. Only those that need to be in [Women’s Health Services]
should be on the unit.”

175. One week later, on or about August 19, 2010, a North Fulton employee
forwarded an e-mail to North Fulton Executive D notifying him that the staff of
a North Fulton-credentialed obstetrician had reported concerns about one of the
owners and operators of Clinica to Conifer

 

34

--------------------------------------------------------------------------------

and asking “[p]lease let me know how we want to proceed with this. UGH!!!”.
Specifically, the e-mail stated that the OB’s staff reported that one of the
owners and operators of Clinica was contacting some of their patients and
harassing them, and the staff was concerned about how Clinica was getting the
OB’s patients’ contact information because some of them had never been Clinica
patients. The e-mail noted that the OB’s staff had also reported these concerns
to North Fulton Executive C, and that “the assumption” was that Clinica could
possibly be getting “PHI” (Protected Health Information) from someone within
North Fulton, possibly the interpreters. The e-mail provided certain examples:

 

  •   “Right after the delivery, the patient got a call from [one of the owners
and operators of Clinica] asking who delivered the baby – asked for a
description of the doctor (gender, short/tall, black/white…) ..telling the
patient that they won’t get the help she needs without getting Medicaid unless
they go through Clinica.”

 

  •   The “patient secured an attorney because she feels harassed by Clinica.
I’m not sure if she has delivered yet. Per [the OB’s staff], the patient kept
getting calls and house visits from [one of the owners and operators of Clinica]
scaring her into being a clinica patient. She ended up signing a form to switch
from [the North Fulton-credentialed physician] to Clinica because she felt that
if she did not, something bad would happen to her.”

176. In or around fall 2010, Clinica’s owners and operators divided the
then-existing Clinica clinics between them. Each owner created a successor
company. Clinica Owner A created Company A. Clinica Owner B created Clinica del
Bebe. Around the same time, Atlanta Medical’s and North Fulton’s contracts with
Clinica were under extension to allow time for the hospitals to negotiate new
contracts with Company A and Clinica del Bebe. Ultimately, Clinica Owner B’s
company, Clinica del Bebe, continued to do business with Atlanta Medical, and
Clinica Owner A’s company, Company A, continued to do business with North
Fulton.

177. In or around October 2010, the North Fulton contract administrator sent an
e-mail to North Fulton Executive C and North Fulton Executive D reminding them
that Clinica’s contract was set to expire and reporting that the Women’s Health
Director said “there are a lot of problems since [Clinica Owner A] took over.”
In response, North Fulton Executive D instructed the contract administrator to
“[e]xtend Clinica for as long as we can get away with…we need to give them time
to determine the company structure,” while North Fulton Executive C asked the
Women’s Health Director for more specifics about the problems. The Women’s
Health Director reported, in pertinent part, “Oh yes… I have left a message. He
has not returned my call. My understanding is that [Clinica Owner A] now has the
interpreter service and he has unusual pay practices…. The reason I called him
was because I do not know who to report issues to. We were not informed when the
change took place. This is typical business with Clinica and it gets old!”

178. On or about November 10, 2010, the North Fulton contract administrator sent
an e-mail to North Fulton Executive C, North Fulton Executive D, Tenet Regional
SVP of Operations A, and Tenet Regional VP of Finance Operations A, and others,
requesting approval for an extension of Clinica’s contract. Tenet Regional VP of
Finance Operations A replied, “It has been noted that there have been reductions
in Clinica volumes as well as other OB volumes. .

 

35

--------------------------------------------------------------------------------

. . I would expect a reduction in the rate. Were discussions concerning rate
reduction in the interim period completed? If not, they should be, especially
with the request to extend through March 31st. Our volumes have been retracting
but our expenses continue at a higher volume level. We have to change the
equation.”

179. North Fulton Executive C responded to the group: “the problem right now is
that we have no idea who to work with – this is a nasty divorce. In fact, we are
in touch with [Atlanta Medical Executive A] about using both hospitals to
negotiate a better rate. But they can’t decide who is going to run which clinic.
We agree with you about the rate – it makes me crazy that we continue to pay for
this at this level. But we need more time. Can we extend it but put language
that the extension will be terminated as soon as a new contract is negotiated?”

180. Tenet Regional VP of Finance Operations A responded, in pertinent part:
“Honestly, the budget push is NASTY. We cannot go on with the status quo on
fixed costs. We had this discussion on this contract a year ago and it comes
around again. Things need to change on the fixed cost side and this is a very
rich contract at $33K/month. Betting on the come with volume has not been
successful.”

181. On or about November 15, 2010, North Fulton Executive D asked Tenet
Regional VP of Finance Operations A to approve at least a 30-day extension on
the Clinica contract because more time was needed to negotiate and that he was
in touch with Clinica Owner B, but that Clinica Owner A was “more difficult and
unfortunately that is the person that NFH will have to deal with in the split.”
Tenet Regional VP of Finance Operations A responded, in pertinent part: “Does
that mean that nothing has been done with this agreement except to roll over and
request 111 day extension. I am disappointed it is coming down to this noting
the cost and knowing the OB volume levels at your facility and the deterioration
for two years. This contract was highly contested last year due to the cost.”

182. On or about November 16, 2010, North Fulton Executive D responded back to
Tenet Regional VP of Finance Operations A, cc’ing North Fulton Executive C
stating, “Is the response below an approval or denial for a 30 day extension?
Facts are that Clinica admissions are 777 through October or 54% of the total OB
admissions. This was a slightly better than break-even product before the 11.8%
Medicaid increase and it covers a million dollars in overhead based on the way
that Tenet allocates it. Without Clinica, $289k in ICTF money from the state
goes away and the state provider tax which already has a negative impact on NFH
of $1.5 million gets worse. We will also need to adjust the admissions budget
for 2011 by 932 admissions. We agree that the volume is down 12.8% and we will
present a like cost reduction plan to Clinica once we figure out which entity
NFH will have to contract with. However, I think we need to be prepared for the
fact they will not accept…”

183. On or about December 8, 2010, a North Fulton employee sent an e-mail to
North Fulton Executive D with the subject “Clinica Admits” reporting the
following:

 

2005

     710   

2006

     1176   

2007

     1418   

2008

     1501   

2009

     1475   

2010 YTD

     852   

 

36

--------------------------------------------------------------------------------

184. In or around January 2011, North Fulton Executive D proposed changing the
language of the Clinica contract for the Medicaid eligibility services component
from an hourly rate to “per screening conducted.” Tenet Regional VP of Finance
Operations A asked North Fulton Executive D, “[h]ow much do you anticipate
saving by a change in methodology? …. I would like to explore a roll out at the
other facilities. We pay that group BIG BUCKS across the region. We have not
seen an influx of Clinica patients, actually retraction and they keep at the
same rate. We need some of those gigs!” North Fulton Executive D responded,
“[b]ased on the current volume in 2010 it would save approx. $10k/month. Now I
have to push [Clinica Owner A] into the deal.” Tenet Regional VP of Finance
Operations A responded, “[p]ush hard! You can do it!”

185. On or about March 2, 2011, Tenet Regional VP of Finance Operations A sent
an e-mail to North Fulton Executive D with the subject “Clinica” stating, “thank
you for your hard work on the revised contract and blazing a new path on the
compensation portion. The $120K is substantial. Please continue to monitor their
volumes to ensure that the savings is achieved as the NF volumes for OB could
change but hopefully in better payer mixes. I sent the agreement to [Atlanta
Medical Center Executive B] for a review for applicability at AMC.”

186. From January 2011 to April 2011, when Clinica’s contract with North Fulton
ended, certain North Fulton Executives, including North Fulton Executive C and
North Fulton Executive D, caused Tenet to pay approximately $115,482 to Clinica
for the benefit of North Fulton, and the owners and operators of Clinica
continued to direct Clinica’s patients to deliver at North Fulton.

187. In or around March 2011, North Fulton signed a new contract with Company A
for interpreter services and Medicaid eligibility services. From April 2011 to
December 2011, certain North Fulton Executives, including North Fulton Executive
C and North Fulton Executive D, caused Tenet to pay approximately $203,397 to
Company A for the benefit of North Fulton, and the owner and operator of Company
A continued to direct Company A’s patients to deliver at North Fulton.

188. On or about March 1, 2011, North Fulton Executive C sent North Fulton
Executive D an e-mail stating that a North Fulton credentialed doctor had
approached her to ask for more interpreters and that she needed certain facts:
“Was our Clinica volume up first quarter this year vs. last? How often are these
interpreters doing non-Clinica work? I heard an interpreter whining to a
physician the other day about how we ‘cut the contract and that’s why it took
her so long to get to his request.’ I have lots of thoughts about that because
[I] remember

 

37

--------------------------------------------------------------------------------

hearing they did nothing but hung out in the atrium.” North Fulton Executive D
responded, “[j]ust talked to [the contract administrator]….The interpreters
didn’t even work the 728 of the new contract..They were 87 hours short…..Maybe
we need to get them to work the scheduled amount before we add more.”

189. On or about May 11, 2011, Atlanta Medical Executive A sent an e-mail to
North Fulton Executive C stating, in pertinent part, “I will ask [my assistant]
to set up a brief call for you and I to discuss the two Clinica organizations,
sometime next week. I have a suggestion for how we might solve the issue of some
of ‘[Clinica Owner B’s]’ clinics delivering at NFRH and some of ‘[Clinica Owner
A’s]’ clinics delivering at AMC.”

190. On or about June 13, 2011, North Fulton Executive D sent an e-mail to
Atlanta Medical Executive A stating, “I have talked to [Clinica Owner A] several
times since our conversation about contracting with [Clinica Owner B and Clinica
del Bebe] and each time [Clinica Owner A] tells me that he is not contracting
with AMC. He appears determined not to cross lines with [Clinica Owner B]. Have
you been able to contract with him?” After the Atlanta Medical contract
administrator confirmed that a proposed Atlanta Medical contract with Company A
had been approved and mailed to Clinica Owner A for signature, but the hospital
had received no response, North Fulton Executive D responded, “[w]hen and if he
signs, please send me a copy to use as leverage.”

191. On or about August 4, 2011, Atlanta Medical Executive A sent an e-mail to
North Fulton Executive D, and copied Atlanta Medical Executive B, stating, “how
are you guys doing with your Clinica volume? Ours is down quite a bit this past
quarter. I was wondering if [Clinica Owner A] is winning the [] War of if we are
both down.” North Fulton Executive D responded, “[w]e were up about 20 Clinica
cases in July compared to what we ran per month during 1st quarter. All other
volume was down significantly though.”

192. On or around August 6, 2011, North Fulton Executive C exchanged e-mails
with a North Fulton-credentialed physician about Clinica Owner A’s plans to
staff Company A’s clinics and to ask North Fulton to give him $1.5 million to
fund a new hospitalist group. North Fulton Executive C wrote, “If I had $1.5
million, it wouldn’t go to [Clinica Owner A]. Ha!”

193. On or about September 21, 2011, North Fulton Executive C sent an e-mail to
North Fulton Executive D and others with the subject “Update on Physician
Agreements.” With regard to “Clinica,” North Fulton Executive C wrote: “[North
Fulton credentialed obstetrician] has had a major falling out with [Clinica
Owner A]. As of now, he will continue to deliver Clinica babies here but will
not staff their clinics. As [Clinica Owner A]’s new doctors are not credentialed
(don’t even have applications in yet), [North Fulton employee] is speaking to
[another North Fulton credentialed physician] about delivering these babies in
the interim – not doing any clinic work just catching babies – until [Clinica
Owner A]’s physicians are credentialed (actually, IF they get credentialed).”

194. On or about October 11, 2011, North Fulton Executives C and D caused Tenet
to pay $20,667 to Company A for the benefit of North Fulton.

 

38

--------------------------------------------------------------------------------

195. On or about November 10, 2011, North Fulton Executives C and D caused Tenet
to pay $24,379.50 to Company A for the benefit of North Fulton.

196. On or about December 8, 2011, North Fulton Executives C and D caused Tenet
to pay $21,409.50 to Company A for the benefit of North Fulton.

197. During 2012, certain North Fulton Executives, including North Fulton
Executive C and North Fulton Executive D, caused Tenet to pay approximately
$225,924 to Company A for the benefit of North Fulton, and the owner and
operator of Company A continued to direct Company A’s patients to deliver at
North Fulton.

198. From January 2013 to September 2013, when North Fulton ended its contract
with Company A, North Fulton Executives, including North Fulton Executive C,
caused Tenet to pay approximately $158,743 to Company A for the benefit of North
Fulton, and the owner and operator of Company A continued to direct Company A’s
patients to deliver at North Fulton.

199. From in or around November 2001 to in or around September 2013, certain
North Fulton executives, including North Fulton Executives A, B, C, and D
authorized payments to Clinica (1) without supporting documentation or (2) with
inadequate documentation, in violation of then-existing company policies and
controls governing the disbursement of monies to referral sources, such as
Clinica.

200. From in or around July 2008 to in or around October 2011, in connection
with Tenet’s submission of its annual reports and certifications to HHS-OIG
under the CIA, certain North Fulton executives, including North Fulton
Executives C and D, certified each quarter that they had accurately and honestly
completed quarterly certifications that required these executives to disclose,
among other things, reportable events under the CIA.

Specific Conduct at Hilton Head

201. On or about January 19, 2006, one of the owners and operators of Clinica
sent an e-mail to a senior administrator at Atlanta Medical which stated, in
pertinent part: “[The other owner and operator of Clinica] and I are leaving now
for Hilton Head to meet with [Hilton Head Executive A] and some of her docs at
Hilton Head Regional Hospital. We’ll see …”

202. On or about May 18, 2006, Hilton Head Executive A sent an e-mail to, among
others, Tenet Regional SVP of Operations A containing an attachment titled
“Hilton Head Reg. Medical Center Hospital Key Issues/Update.” The document
contained a section titled “Growth.” In the “Growth” section, the document noted
that “Clinica del a Mama plans to enter market in late summer.”

203. On or about December 1, 2006, Tenet Regional VP of Finance Operations A
sent an e-mail to Hilton Head Executive A noting, among other things, that
“[w]ith Clinica coming on board and anticipated increases in OB cases, that
should be a plus.”

204. On or about January 25, 2007, one of the owners and operators of Clinica
sent an e-mail to Hilton Head Executive B discussing the way in which Clinica
would get paid. In the e-mail, the owner and operator of Clinica stated: “I do
not look forward to the process of trying a

 

39

--------------------------------------------------------------------------------

management agreement. Legal has to have so much documentation to support the
fees that it is very difficult. Last year we had to submit accounting
documentation supporting how much it costs us to run the Medicaid Dept of the
clinic on a daily basis. The breakdown had to include everything down to copy
paper and paper clips. It was crazy. I don’t even know if we can justify all of
the aspects of the contract adequately. I hope they come up with another way.”

205. On or about March 20, 2007, the Director of Women’s Services sent an e-mail
to one of the owners and operators of Clinica discussing concerns with the
documentation necessary to support the payments from Tenet to Clinica. The owner
and operator of Clinica replied: “Please call me about [providing certain
supporting documentation] as I have never had to provide this information on our
similar contracts in the past 8 years. [Hilton Head Executive A] and I discussed
in detail that this contract would mirror the North Fulton services agreement. I
don’t even provide invoicing on any of our other contracts. Why is this one so
different? We might need to involve [Hilton Head Executive A] to get things
sorted out. I am not accustomed to this procedure.”

206. On or about March 21, 2007, Hilton Head Executive B sent an e-mail to the
Director of Women’s Services at Hilton Head which stated: “I’m hearing big
numbers for scheduled clinica deliveries over the next several months … can you
give me those details for a board presentation I have to do this evening …
thanks.”

207. On or about April 2, 2007, the Director of Women’s Services at Hilton Head
sent an e-mail to one of the owners and operators of Clinica which stated: “[A]
couple of things came to my attention last week that I wanted to share with you
to see if we can resolve/address … [First,] a woman who happened to be pregnant
came to Clinica for an urgent medical condition unrelated to pregnancy, and was
asked at the clinic if she had money to pay for the services. When she told
staff she had no money, she was informed she couldn’t be helped and was directed
to go to the Emergency Room. This doesn’t put Clinica in a favorable light, as
it appears Clinica would only assist if they could be paid adequately …. The
second issue relates to our previous conversation regarding having nursing staff
in the room participating when a translator is engaged in any medical
information collection or communication. In this instance, a condition occurred
at birth, and the translator was speaking about the condition after birth alone
with the mother, and communicated that this was ‘an accident’. The information
as presented was inaccurate, upset the mother and potentially increased the risk
of litigation to the medical center. Nursing and Medical staff had to spend
considerable time and effort rectifying the situation. I would again ask that
you remind the translators not to engage in medically related conversations on
their own, but rather formally translate.”

208. On or about April 4, 2007, the Director of Women’s Services at Hilton Head
sent an e-mail to one of the owners and operators of Clinica which stated: “I am
signing off on your initial invoices … and will ask that payments be processed
expeditiously. I have had further discussions with our CFO and COO regarding
documentation to support the invoices. At present, we are to receive ‘daily work
sheets completed by the Company Staff’ … to validate the invoiced amounts. In
lieu of these daily sheets which will tend to be an administrative burden for
both parties, I would ask that future invoices be accompanied by a monthly tally
of patients whose eligibility documents were completed and submitted, and
completed pre-natal records submitted to the Women’s Center. The tally sheets
should include patient names.”

 

40

--------------------------------------------------------------------------------

209. In April 2007, certain Hilton Head executives, including Hilton Head
Executive A, caused Tenet to make its first payment of $30,484 to Clinica for
the benefit of Hilton Head.

210. On or about July 3, 2007, the Director of Women’s Services at Hilton Head
sent an e-mail to one of the owners and operators of Clinica which stated, in
part: “[Y]ou have not been available by phone and have not responded to emails
over the past month. This makes communications difficult. There continues to be
issues of non-availability of translators, particularly on the weekends…. This
lack of translators translates into frustrations for staff, poor communications
with our Hispanic patients and ultimately breaches the terms of our contract
with you. To-date, since the start of the contract, we have not had translators
routinely available on the weekends. This needs to be addressed as a priority by
Clinica.”

211. On or about July 23, 2007, Hilton Head Executive B sent an e-mail to the
Director of Women’s Services at Hilton Head which stated: “I’m preparing a
mid-year initiatives update for corporate and need the number of clinica
deliveries ytd … if you have it [by] month that would be helpful also…thanks.”

212. From April 2007 through December 2007, certain Hilton Head executives,
including Hilton Head Executive A, caused Tenet to pay over $121,000 to Clinica
for the benefit of Hilton Head, and the owners and operators of Clinica directed
Clinica patients to deliver at Hilton Head.

213. On or about December 4, 2007, Hilton Head Executive A emailed Tenet
Regional VP of Finance Operations A noting that “Clinica [admissions] has
exploded…”

214. On or about January 10, 2008, a paralegal in Tenet’s Legal Department sent
an e-mail to a contract analyst at Hilton Head asking questions about Hilton
Head’s contract with Clinica. In the e-mail, the paralegal wrote: “I’ve had an
opportunity to review the information [] provided. Unless I’m missing something,
the question I forwarded to you … has not been answered – why are we paying
Clinica more than it would cost the hospital to employ these providers? And what
services/costs are included in the management fee?”

215. On or about August 5, 2008, the Director of Women’s Services at Hilton Head
sent an e-mail to Hilton Head’s contract administrator which stated: “[The Chief
Nursing Officer] is aware that Clinica has not been able to provide 24/7
interpreter services to the hospital since the inception of the contract.
Specifically they fail to provide coverage for the weekends. In general, the
level of translation competency with the Clinica interpreters is at times less
than adequate. None of their staff have ever received any formal training, and
many do not have high-school degrees, so the level of general education and
knowledge presents challenges when dealing with more complex medical terminology
and interpretation.”

216. On or about September 24, 2008, an executive at Hilton Head sent an e-mail
and attachments to Hilton Head Executive A, among others. One of the attachments
was titled “Tenet Hilton Head Hospital Business Plan Overview FY 2009-2011.” On
page seven of the attachment, the presentation stated that “Improvements in
Women’s Services product line and addition of Clinica have resulted in
significant market share shift from Beaufort.”

 

41

--------------------------------------------------------------------------------

217. On or about November 6, 2008, Hilton Head Executive A’s executive assistant
sent an e-mail to one of the owners and operators of Clinica asking for her and
the other owner and operator of Clinica’s availability to meet or participate in
a phone conference with Hilton Head Executive A and a Hilton Head credentialed
physician to discuss “Clinica operations and volumes.”

218. In 2008, certain Hilton Head executives, including Hilton Head Executive A,
caused Tenet to pay over $176,000 to Clinica for the benefit of Hilton Head, and
the owners and operators of Clinica continued to direct Clinica patients to
deliver at Hilton Head.

219. On or about February 9, 2009, the Women’s Services Director at Hilton Head
sent an e-mail to Hilton Head Executive A which stated: “I understood from our
brief conversation at the Stand-up Mtg. last week, that some basic statistics
that address both volume of deliveries associated with Clinica, and payor mix
would be beneficial. These together provide a macro snapshot of our particular
market. Below, please find the relevant stats for 2007 vs. 2008.” The e-mail
informed Hilton Head Executive A that, in 2007, there were 183 Clinica
deliveries, which represented 26.2% of all deliveries at Hilton Head that year.
The email also informed that, in 2008, there were 247 Clinica deliveries, which
represented 33% of all deliveries at Hilton Head that year.

220. In 2009, certain Hilton Head executives, including Hilton Head Executive A,
caused Tenet to pay over $199,000 to Clinica for the benefit of Hilton Head, and
the owners and operators of Clinica continued to direct patients to deliver at
Hilton Head.

221. In 2010, certain Hilton Head executives caused Tenet to pay over $208,000
to Clinica for the benefit of Hilton Head, and the owners and operators of
Clinica continued to direct Clinica patients to deliver at Hilton Head.

222. On or about November 9, 2010, the Director of Women’s Services at Hilton
Head, after receiving a pro forma addressing Clinica de la Mama, stated: “I
calculate the contract [with Clinica] to be worth $149,616 based on 20 Clinica
patients per month.”

223. On January 14, 2011, after Clinica closed its Hilton Head clinic doors
abruptly, the Director of Women’s Services at Hilton Head sent an e-mail to the
Chief Financial Officer at Hilton Head, among others, regarding Hilton Head’s
relationship with Clinica. In the e-mail, the Director of Women’s Services
stated: “[F]rom my perspective, a company that abandons its patients and staff
is not a viable business partner and we should let the contracts expire.”

224. From 2007-2011, Hilton Head received at least $4,000,000 from South
Carolina’s state Medicaid Program based on over 700 Clinica patient deliveries.

 

42

--------------------------------------------------------------------------------

Specific Conduct at Spalding

225. Spalding Regional Medical Center (“Spalding”) was an acute care hospital
located in Griffin, Georgia, in Spalding County, approximately one hour south of
downtown Atlanta, Georgia and one hour north of Macon, Georgia.

226. In or around February 2003, Spalding prepared a PowerPoint presentation
titled, “Situation Assessment FY 2004 Strategic Plan.” The “Facility Overview”
slides provided information about the market demographics in Spalding’s primary
service area and secondary service area, including a breakdown on ethnicity and
age as of 2001. For “Ethnicity,” the slide showed that the ethnicities of
potential patients in Spalding’s combined service area were predominantly
African-American and caucasian, and that less than 5% were Hispanic.

227. In or around September 2003, Spalding executives and employees prepared a
PowerPoint presentation titled, “FY 2004 Strategic Plan.” On the “Strategic
Summary” slide, “Clinica de la Mama Program” is listed as a growth initiative.
On a later slide, Spalding projected that the Clinica de la Mama Program would
bring in 200 admissions.

228. On or about October 29, 2003, Spalding Executive A sent an e-mail to a
Tenet regional executive summarizing the key items that Spalding Executive A had
been focused on during his first few weeks on the job, and what he planned to
accomplish over the next few weeks. Under the “Business Development” section,
Spalding Executive A stated: “I will finalize the deal with Clinica and get
ecats submitted.”

229. In or about November 2003, Spalding prepared a “Close Call Pillar Report”
for October 2004. Under the “Growth Section,” the document states, “[h]eld
dinner meeting with OB physician, introduced Clinica del a Momma concept.”

230. On or about November 13, 2003, Spalding Executive A sent an e-mail to one
of Clinica’s owners and operators attaching a document with the names and
addresses of all of Spalding’s credentialed obstetricians.

231. On or about November 21, 2003, Spalding Executive A sent an e-mail to a
Tenet regional executive which stated, “I need to get a copy of the main part of
the contract with Clinica del la Mama. I have Exhibit A that [one of the owners
and operators of Clinica] gave me when we met last month. Also, the Exhibit that
[was given] to me had a $450 per case fee for Medicaid eligibility that was not
in our business plan proforma. What are your thoughts on this cost? I spoke to
[one of the owners and operators of Clinica] a few weeks ago and she is looking
for space and beginning to contact our doc’s individually. In an effort to get
something going to grow business down here I am wanting to push ahead with this
although I do have some concern about OB unit capacity. There have been several
days lately where there was no room on postpartum.”

232. On or about November 21, 2003, a Tenet regional executive sent an e-mail to
Spalding Executive A stating, “[a]ttached is the contract and some other
information on North Fulton’s contract with Clinica. You should use this as a
template for SRH.” Spalding Executive A then sent this e-mail to another
Spalding executive with a message, “[l]et’s talk about how we get this going.”

 

43

--------------------------------------------------------------------------------

233. On or about January 14, 2004, one of the owners and operators of Clinica
sent an e-mail to Spalding Executive A stating, “[p]lease find the Exhibit to
the Services Agreement with a few modifications on our first try. I added a per
month fee for Medicaid eligibility based on historical data or hours spent in
the Company in this area. This is almost the same formula used at North Fulton.
We’ll see you tonight. We can discuss this then if you would like.”

234. On or about March 3, 2004, Spalding Executive A sent an e-mail to Tenet
regional executives stating, “[one of the owners and operators of Clinica] and I
signed the Clinica contract today. It will be effective 4/1/04. They have a site
selected which they will renovate and will bring in a temporary building to get
started. We have 2 OB’s lined up to staff the clinic and a third whom they are
still talking to. I have asked [certain Spalding employees] to take a trip to
North Fulton to gain from their experience as we move to implement. I will keep
close watch and push to get this program up to speed asap. Thanks for your
support[.]”

235. Under Spalding’s services contract with Clinica, Clinica was to provide
translation/interpretation services 16 hours a day and 7 days a week and related
management services, Medicaid eligibility determination services, community
outreach services, educational services, and pre-registration services.

236. On or about April 19, 2004, Spalding Executive A sent an e-mail to a Tenet
regional executive providing an update on priorities. Under “Growth
Initiatives,” Spalding Executive A wrote, “Clinica contract was operational 4/1.
It took two plus months to get through legal and then Clinica took a month to
get temporary clinic site open.”

237. In or around May 2004, Spalding prepared a “Close Call Pillar Report” for
April 2004. Under the “Growth” section, the document states: “Clinica de la Mama
program started April 1. To date, 1 delivery and 2 outpatients.”

238. In or around June 2004, Spalding prepared a “Close Call Pillar Report” for
May 2004. Under the “Growth” section, the document states: “Clinica program is
slow to start. Clinic volume has not picked up. Meeting scheduled with [the
owners and operators of Clinica] to discuss development.”

239. On or about June 15, 2004, Spalding Executive A sent a memo to a Tenet
regional executive titled “Spalding Regional Performance Report.” Under the
“Volume” section, the document states, “[i]nitiative to attract Hispanic
Obstetric patients (Clinica de la Mama) was delayed in starting and has under
performed expectations in the first three months by 55 admits although OB/GYN
admits are up over the prior year. Evaluating whether to continue this program.”

240. On or about June 22, 2004, Spalding Executive A sent an e-mail to a Tenet
regional executive providing an update on priorities. Under “Growth
Initiatives,” Spalding Executive A wrote, “Clinica has been a disappointment. I
met with [the owners and operators of Clinica] last week because I was not
seeing the clinic develop and the community outreach activity did not appear to
be very active. [One of the owners and operators of Clinica] did an about face
and said he did not think we would be successful in convincing Hispanic patients
in

 

44

--------------------------------------------------------------------------------

South Atlanta to come to Griffin. He wanted to move the clinic to Newnan. I
think this is crazy and [a Tenet regional executive] and I have a meeting with
him next Monday and I believe we should cancel the contract.”

241. On or about June 28, 2004, Spalding Executive A sent an e-mail to a
Spalding executive on the subject of “Clinica Payments.” Spalding Executive A
asked, “Could you do a quick summary of the payments we have made to clinica so
far. I need this by 10AM. I will be leaving for a meeting with them at the
regional office.” In response, the Spalding executive responded: “4/13 $16,637,
4/30 $16,637, 5/14 16,637” – “Total $49,911.”

242. On or about June 29, 2004, Spalding Executive A wrote a letter to one of
the owners and operators of Clinica following up on their meeting on June 28,
and terminating the agreement between Spalding and Clinica. The letter provided,
in pertinent part: “I want to thank you for the efforts that you have put
forward to make this project work. I appreciate the frankness with which you and
[the other owner and operator of Clinica] have discussed the barriers that we
have uncovered that will prevent this program from achieving the goals that were
originally conceived. I believe it is in the best interest of our organizations
to discontinue our efforts toward this project and terminate our agreement.”

243. Spalding’s “2005 Annual Plan Executive Summary” contained a section on
“2004 Performance.” In the subsection on “[p]rogress on major business
initiatives,” it was reported that “Hispanic OB outreach initiative, Clinica de
la Mama, discontinued after three months due to inability of partner to
establish clinic volume and market assumptions were found invalid.”

244. In 2004, Spalding received approximately $10,000 from Georgia Medicaid
based on less than 5 Clinica patient deliveries.

 

45

--------------------------------------------------------------------------------

ATTACHMENT B

SECRETARY’S CERTIFICATION

TENET HEALTHCARE CORPORATION

I, Paul Alan Castanon, the duly appointed Corporate Secretary of Tenet
Healthcare Corporation (the “Company”), a corporation organized under the laws
of the State of Nevada, hereby certify that attached as Exhibit A is a true and
correct copy of a resolution approved by the Board of Directors of the Company
at a special meeting on July 29, 2016:

IN WITNESS WHEREOF, I have executed this certificate in my capacity as the
Company’s Corporate Secretary this 29th day of September, 2016.

 

/s/ Paul Alan Castanon

Paul Alan Castanon Corporate Secretary

--------------------------------------------------------------------------------

EXHIBIT A

TENET HEALTHCARE CORPORATION

Resolutions Adopted at a

Special Meeting of the Board of Directors

WHEREAS, Tenet Healthcare Corporation (the “Company”) has been engaged in
ongoing discussions with the U.S. Department of Justice (“DOJ”), the U.S.
Attorneys’ Offices for the Northern and Middle Districts of Georgia, and the
Georgia Attorney General’s Office to resolve the civil qui tam litigation
(United States of America, ex rel. Ralph D. Williams v. Health Management
Associates, Inc., et al.) pending in the U.S. District Court for the Middle
District of Georgia and the parallel criminal investigation of the Company and
certain of its subsidiaries being conducted by the DOJ and the U.S. Attorney’s
Office for the Northern District of Georgia (collectively, the “Clinica de la
Mama matters”);

WHEREAS, at a special meeting of the Board of Directors on May 31, 2016, the
Board of Directors unanimously authorized each of the Company’s Chairman of the
Board and Chief Executive Officer, its Senior Vice President and General Counsel
and its Vice President and Assistant General Counsel, and any Senior Vice
President or Vice President authorized by such officers (collectively the
“Authorized Officers”), to negotiate and enter into for and on behalf of the
Company and certain subsidiaries definitive agreements, execute orders and take
other actions necessary in the judgment of such officers to implement a
resolution of the Clinica de la Mama matters on substantially the terms and
conditions set forth in a term sheet presented by the DOJ to the Company’s
external counsel on May 26, 2016; and

WHEREAS, based upon the advice and recommendations of the Company’s external
counsel and its management, the Board of Directors at a special meeting of the
Board of Directors on July 29, 2016 ratified and confirmed the authorization of
each of the Authorized Officers to enter into for and on behalf of the Company a
Non-Prosecution Agreement; Plea Agreements for Atlanta Medical Center, Inc. and
North Fulton Medical Center, Inc. d/b/a North Fulton Hospital; and a Civil
Settlement Agreement relating to the Clinica de la Mama matters.

NOW THEREFORE, BE IT RESOLVED that each of (i) the Authorized Officers and (ii)
the Company’s external counsel from Latham & Watkins LLP, be, and each of them
hereby is, authorized to execute the Non-Prosecution Agreement, the Plea
Agreements and Civil Settlement Agreement for and on behalf of the Company and
its subsidiary, Tenet HealthSystem Medical, Inc.

--------------------------------------------------------------------------------

ATTACHMENT C

INDEPENDENT COMPLIANCE MONITOR

The duties and authority of the Independent Compliance Monitor, and the
obligations of Tenet Healthcare Corporation (“Tenet”), on behalf of itself and
its subsidiaries and affiliates, with respect to the Monitor and the United
States Department of Justice, Criminal Division, Fraud Section and the United
States Attorney’s Office for the Northern District of Georgia (the “Offices”)
are as described below:

Term of the Monitorship

1. Tenet will retain the Monitor for a period of three (3) years (the “Term of
the Monitorship”), unless the extension provision or early termination provision
of Paragraph 4 of the Non-Prosecution Agreement (the “Agreement”) is triggered.

Monitor’s Mandate

2. The Monitor’s primary responsibility is to assess, oversee, and monitor
Tenet’s compliance with its obligations under the Agreement, so as to
specifically address and reduce the risk of any recurrence of violations of the
Anti-Kickback Statute and Stark Law (collectively “Misconduct”) by any entity
owned, in whole or in part, by Tenet. In doing so, the Monitor will review and
monitor the effectiveness of Tenet’s compliance with the Anti-Kickback Statute,
42 U.S.C. § 1320a-7b(b), and the Stark Law, 42 U.S.C. § 1395nn, and their
respective implementing regulations, advisories, and advisory opinions
promulgated thereunder, and make such recommendations as the Monitor believes
are necessary to comply with the Agreement. With respect to all entities in
which Tenet or an affiliate of Tenet owns a direct or indirect equity interest
of 50% or less and does not manage or control the day-to-day operations, the
Monitor’s

 

C-1

--------------------------------------------------------------------------------

access to such entities shall be co-extensive with Tenet’s access or control and
for the purpose of reviewing Tenet’s conduct. During the Term of the
Monitorship, the Monitor will review and provide recommendations for improving
Tenet’s compliance with the Anti-Kickback Statute and Stark Law, as well as
Tenet’s design and implementation and enforcement of its compliance and ethics
programs for the purpose of preventing future criminal and ethical violations by
Tenet and its subsidiaries, including, but not limited to, violations related to
the conduct giving rise to the Agreement and criminal Information filed in
connection with this matter. In doing so, the Monitor shall:

a. Review and monitor Tenet’s compliance with the Agreement;

b. Review, evaluate, and monitor Tenet’s design and implementation of corporate
governance, policies and procedures relating to referral source arrangements and
procurement matters to ensure they are generally effective in preventing and
detecting any Misconduct by any Tenet director, officer, employee, or agent;

c. Review, evaluate, and monitor Tenet’s compliance and ethics program as it
relates to compliance with the Anti-Kickback Statute and Stark Law, including
but not limited to risk management systems, compliance and ethics training and
communications, internal auditing systems, compliance data management systems,
finance and procurement systems, internal reporting and whistle blowing systems,
internal investigation procedures, and information retention and production to
ensure they are generally effective in preventing and detecting any Misconduct
by any Tenet director, officer, employee, or agent;

 

C-2

--------------------------------------------------------------------------------

d. Review, evaluate, and monitor Tenet’s compliance and ethics department and
legal department structure, composition, and resources, including but not
limited to, personnel compensation, recruitment programs, and training, to
ensure the compliance and ethics department or function and the legal department
have the appropriate qualifications, authority, structure, and resources to be
generally effective in preventing and detecting any Misconduct by any Tenet
director, officer, employee, or agent;

e. Review in his or her discretion any decision by Tenet and its subsidiaries to
enter into a contractual agreement with, or to terminate a contractual agreement
with, any actual or potential referral source, along with any and all related
documents, communications, data and materials;

f. Review in his or her discretion any payment made by Tenet and its
subsidiaries to any actual or potential referral source, along with any and all
related documents, communications, data and materials; and

g. Review in his or her discretion any entry in Tenet’s books and records
relating to any payment made to any actual or potential referral source, along
with any and all related documents, communications, data and materials.

3. It is the intent of the Agreement that the provisions regarding the Monitor’s
authority and duties be broadly construed.

Tenet’s Obligations

4. Tenet shall cooperate fully with the Monitor, and the Monitor shall have the
authority to take such reasonable steps as, in his or her view, may be necessary
to be fully informed with respect to the Monitor’s Mandate. To that end, Tenet
shall facilitate the Monitor’s

 

C-3

--------------------------------------------------------------------------------

access to Tenet’s documents and resources and shall not limit such access. Tenet
shall provide the Monitor with access to all information, documents, records,
facilities, and employees, as reasonably requested by the Monitor. Tenet shall
use its best efforts to provide the Monitor with access to Tenet’s former
employees and its third-party vendors, agents, and consultants.

5. Any disclosure by Tenet to the Monitor concerning fraudulent or criminal
conduct related to the Anti-Kickback or Stark laws shall not relieve Tenet of
any otherwise applicable obligation to truthfully disclose such matters to the
Offices, pursuant to the Agreement.

Confidentiality

6. The Monitor shall maintain as confidential all non-public information,
documents and records it receives from Tenet, subject to the Monitor’s reporting
requirements herein. The Monitor shall take appropriate steps to ensure that any
of his/her consultants or employees shall also maintain the confidentiality of
all such non-public information.

7. Should the Monitor, or staff assisting the monitor in fulfilling his/her
responsibilities, be provided access to materials (“Subject Materials”) that may
be protected by the attorney-client privilege, work product doctrine, or any
other legally cognizable privilege or protection, the following conditions shall
apply:

a. In the event the Monitor or the Offices seek disclosure of Subject Materials
for any reason, the Monitor shall provide Tenet with at least 10 days’ notice of
its intention to do so.

b. The Monitor shall return all Subject Materials to Tenet upon the date the
Monitor is finished using Subject Materials for the purpose of fulfilling
his/her responsibilities.

 

C-4

--------------------------------------------------------------------------------

Monitor’s Coordination with Tenet

and Review Methodology

8. In carrying out the Mandate, to the extent appropriate under the
circumstances, the Monitor should coordinate with Tenet personnel, including
in-house counsel, compliance personnel, and internal auditors, on an ongoing
basis. The Monitor may rely on the product of Tenet’s processes, such as the
results of studies, reviews, sampling and testing methodologies, audits, and
analyses conducted by or on behalf of Tenet, as well as Tenet’s internal
resources (e.g., legal, compliance, and internal audit), which can assist the
Monitor in carrying out the Mandate through increased efficiency and
Tenet-specific expertise, provided that the Monitor has confidence in the
quality of those resources.

9. The Monitor’s reviews should use a risk-based approach, and thus, the Monitor
is not expected to conduct a comprehensive review of all business lines, all
business activities, or all markets. In carrying out the Mandate, the Monitor
should consider, for instance, risks presented by Tenet’s: (a) organizational
structure; (b) training programs; (c) compensation and incentive structures;
(d) internal auditing processes; (e) internal investigation procedures; and
(f) reporting mechanisms.

10. In undertaking the reviews to carry out the Mandate, the Monitor shall
formulate conclusions based on, among other things: (a) inspection of relevant
documents, including Tenet’s current policies and procedures; (b) analyses,
studies, and testing of Tenet’s Compliance Program; (c) on-site observation of
selected systems and procedures of Tenet at sample sites; (d) meetings with, and
interviews of, relevant current and, where appropriate, former directors,
officers, employees, business partners, agents, and other persons at mutually
convenient times and places. It shall be in the Monitor’s sole discretion
whether to conduct such meetings and interviews with the participation of
additional Tenet representatives.

 

C-5

--------------------------------------------------------------------------------

Monitor’s Written Work Plans

11. To carry out the Mandate, during the Term of the Monitorship, the Monitor
shall conduct an initial review of Tenet’s compliance with the Anti-Kickback
Statute and Stark Law (the “Initial Review”) and prepare an initial report (the
“Initial Review Report”). The Initial Review Report shall be followed by at
least two follow-up reviews and reports as described in Paragraphs 17-20 below.
With respect to the Initial Review Report, after consultation with Tenet and the
Offices, the Monitor shall prepare the first written work plan for the Initial
Review Report within sixty (60) calendar days of being retained, and Tenet and
the Offices shall provide comments within thirty (30) calendar days after
receipt of the written Initial Review Report work plan. With respect to each
follow-up report, after consultation with Tenet and the Offices, the Monitor
shall prepare a written work plan at least thirty (30) calendar days prior to
commencing a review, and Tenet and the Offices shall provide comments within
twenty (20) calendar days after receipt of the written work plan. Any disputes
between Tenet and the Monitor with respect to any written work plan shall be
decided by the Offices in their sole discretion.

12. All written work plans shall identify with reasonable specificity the
activities the Monitor plans to undertake in execution of the Mandate, including
a written request for documents. The Monitor’s work plan for the initial review
shall include such steps as are reasonably necessary to conduct an effective
initial review in accordance with the Mandate, including by developing an
understanding, to the extent the Monitor deems appropriate, of the facts and
circumstances surrounding any violations that may have occurred before the date
of the Agreement. In developing such understanding the Monitor is to rely to the
extent possible on available information and documents provided by Tenet. It is
not intended that the Monitor will conduct his or her own inquiry into the
historical events that gave rise to the Agreement.

 

C-6

--------------------------------------------------------------------------------

Initial Review

13. The Initial Review shall commence no later than one hundred twenty
(120) calendar days from the date of the engagement of the Monitor (unless
otherwise agreed by Tenet, the Monitor, and the Offices). The Monitor shall
issue the Initial Review Report within one hundred fifty (150) calendar days of
commencing the Initial Review, setting forth the Monitor’s assessment and, if
necessary, making recommendations reasonably designed to improve the
effectiveness of Tenet’s program for ensuring Misconduct is not committed by any
Tenet director, officer, employee, or agent. The Monitor should consult with
Tenet concerning his or her findings and recommendations on an ongoing basis and
should consider Tenet’s comments and input to the extent the Monitor deems
appropriate. The Monitor may also choose to share a draft of his or her reports
with Tenet prior to finalizing them. The Monitor’s reports need not recite or
describe comprehensively Tenet’s history or compliance policies, procedures and
practices, but rather may focus on those areas with respect to which the Monitor
wishes to make recommendations, if any, for improvement or which the Monitor
otherwise concludes merit particular attention. The Monitor shall provide the
Initial Review Report to Tenet and its Board of Directors and contemporaneously
transmit copies to the Chief – Health Care Fraud Unit, Fraud Section, Criminal
Division, U.S. Department of Justice, at 1400 New York Avenue N.W., Bond
Building, Eighth Floor, Washington, D.C. 20005 and to the Chief – Economic Crime
Section, United States Attorney’s Office for the Northern District of Georgia,
75 Ted Turner Dr. SW, Suite 600, Atlanta, Georgia 30303. After consultation with
Tenet, the Monitor may extend the time period for issuance of the Initial Report
for a brief period of time with prior written approval of the Offices.

 

C-7

--------------------------------------------------------------------------------

14. Within one hundred and fifty (150) calendar days after receiving the
Monitor’s Initial Review Report, Tenet shall adopt and implement all
recommendations in the report, unless, within sixty (60) calendar days of
receiving the report, Tenet notifies in writing the Monitor and the Offices of
any recommendations that Tenet considers unduly burdensome, inconsistent with
applicable law or regulation, impractical, excessively expensive, impractical to
implement within such 150 day period, or otherwise inadvisable. With respect to
any such recommendation, Tenet need not adopt that recommendation within the one
hundred and fifty (150) days of receiving the Initial Review Report but shall
propose in writing to the Monitor and the Offices an alternative policy,
procedure or system designed to achieve the same objective or purpose. As to any
recommendation on which Tenet and the Monitor do not agree, such parties shall
attempt in good faith to reach an agreement within forty-five (45) calendar days
after Tenet serves the written notice.

15. In the event Tenet and the Monitor are unable to agree on an acceptable
alternative proposal, Tenet shall promptly consult with the Offices. The Offices
may consider the Monitor’s recommendation and Tenet’s reasons for not adopting
the recommendation in determining whether Tenet has fully complied with its
obligations under the Agreement. Pending such determination, Tenet shall not be
required to implement any contested recommendation(s).

 

C-8

--------------------------------------------------------------------------------

16. With respect to any recommendation that the Monitor determines cannot
reasonably be implemented within one hundred and fifty (150) calendar days after
receiving the Initial Review Report, the Monitor may extend the time period for
implementation with prior written approval of the Offices.

Follow-Up Reviews

17. A first follow-up review shall commence no later than thirty (30) calendar
days after the completion of Tenet’s one-hundred fifty (150) calendar days to
adopt and implement all recommendations in the Initial Review Report (unless
otherwise agreed by Tenet, the Monitor and the Offices) (the “First
Follow-Review”). The Monitor shall issue a written follow-up report within one
hundred and twenty (120) calendar days of commencing the First Follow-up Review,
setting forth the Monitor’s assessment and, if necessary, making recommendations
in the same fashion as set forth in Paragraph 13 with respect to the Initial
Review (the “First Follow-up Review Report”). After consultation with Tenet, the
Monitor may extend the time period for issuance of the First Follow-up Review
Report for a brief period of time with prior written approval of the Offices.

18. Within one hundred and twenty (120) calendar days after receiving the
Monitor’s First Follow-up Review Report, Tenet shall adopt and implement all
recommendations in the report, unless, within thirty (30) calendar days after
receiving the report, Tenet notifies in writing the Monitor and the Offices
concerning any recommendations that Tenet considers unduly burdensome,
inconsistent with applicable law or regulation, impractical, excessively
expensive, impractical to implement in the time period indicated, or otherwise
inadvisable. With respect to any such recommendation, Tenet need not adopt that
recommendation within the one hundred

 

C-9

--------------------------------------------------------------------------------

and twenty (120) calendar days of receiving the First Follow-up Review Report
but shall propose in writing to the Monitor and the Offices an alternative
policy, procedure, or system designed to achieve the same objective or purpose.
As to any recommendation on which Tenet and the Monitor do not agree, such
parties shall attempt in good faith to reach an agreement within thirty
(30) calendar days after Tenet serves the written notice.

19. In the event Tenet and the Monitor are unable to agree on an acceptable
alternative proposal, Tenet shall promptly consult with the Offices. The Offices
may consider the Monitor’s recommendation and Tenet’s reasons for not adopting
the recommendation in determining whether Tenet has fully complied with its
obligations under the Agreement. Pending such determination, Tenet shall not be
required to implement any contested recommendation(s). With respect to any
recommendation that the Monitor determines cannot reasonably be implemented
within one hundred and twenty (120) calendar days after receiving the report,
the Monitor may extend the time period for implementation with prior written
approval of the Offices.

20. The Monitor shall undertake a Second Follow-up Review pursuant to the same
procedures described in Paragraphs 17-19.

21. Following the Second Follow-up Review, the Monitor shall certify in a final
report whether Tenet’s compliance program, including its policies and
procedures, is reasonably designed and implemented to prevent and detect
violations of the Anti-Kickback Statute and Stark Law (the “Final Report”). The
Final Report shall be completed and delivered to the Offices no later than
thirty (30) days before the end of the Term.

 

C-10

--------------------------------------------------------------------------------

Monitor’s Discovery of Misconduct

22. (a) Except as set forth below in sub-paragraphs (b), (c), and (d), should
the Monitor, during the course of his or her engagement, discover:

 

  •   questionable, improper, or illegal practices relating to compliance with
the statutes, regulations, and written directives of Medicare, Medicaid, and
other Federal health care programs, including, but not limited to, the
Anti-Kickback Statute or Stark Law; or

 

  •   violations of Tenet’s compliance or ethics programs, or statutes,
regulations, and written directives of Medicare, Medicaid, and other Federal
health care programs, including, but not limited to, the Anti-Kickback Statute
or Stark Law;

(collectively “improper activities”), the Monitor shall promptly report such
improper activities, except as set forth below, to Tenet’s General Counsel,
Chief Compliance Officer, Audit Committee, and Quality, Compliance and Ethics
Committee for further action, unless the improper activities were already so
disclosed. The Monitor also may report improper activities to the Offices at any
time, and shall report improper activities to the Offices when they request the
information.

(b) In some instances, the Monitor should immediately report improper activities
to the Offices and not to Tenet. The presence of any of the following factors
militates in favor of reporting improper activities directly to the Offices and
not to Tenet, namely, where the improper activities: (1) poses a risk to public
health or safety or the environment; (2) involves senior management of Tenet;
(3) involves obstruction of justice; or (4) otherwise poses a substantial risk
of harm.

 

C-11

--------------------------------------------------------------------------------

(c) If the Monitor believes that any improper activities did actually occur or
may constitute a violation of law or regulatory violation (“Actual Misconduct”),
the Monitor must immediate report such occurrence or violation to the Offices.
When the Monitor discovers Actual Misconduct, the Monitor shall disclose the
Actual Misconduct solely to the Offices, and in such case disclosure of the
Actual Misconduct to the General Counsel, Chief Compliance Officer, the Audit
Committee, and the Quality Compliance and Ethics Committee of Tenet should occur
as promptly and completely as the Offices and the Monitor deem appropriate under
the circumstances.

(d) The Monitor shall address in his or her reports the appropriateness of
Tenet’s response to all improper activities, whether previously disclosed to the
Offices or not. Further, in the event that Tenet, or any entity or person
working directly or indirectly for or on behalf of Tenet, withholds information
necessary for the performance of the Monitor’s responsibilities, if the Monitor
believes that such withholding is without just cause, the Monitor shall disclose
that fact to the Offices.

(e) Tenet shall not take any action to retaliate against the Monitor for any
such disclosures or for any other reason.

Meetings During Pendency of Monitorship

23. The Monitor shall meet with the Offices within thirty (30) calendar days
after providing each report to the Offices to discuss the report, to be followed
by a meeting between the Offices, the Monitor, and Tenet.

 

C-12

--------------------------------------------------------------------------------

24. At least annually, and more frequently if appropriate, representatives from
Tenet and the Offices will meet together to discuss the Monitorship and any
suggestions, comments, or improvements Tenet may wish to discuss with or propose
to the Offices, including with respect to the scope or costs of the Monitorship.

Contemplated Confidentiality of Monitor’s Reports

25. The reports will likely include proprietary, financial, confidential, and
competitive business information. Moreover, public disclosure of the reports
could discourage cooperation, or impede pending or potential government
investigations and thus undermine the objectives of the Monitorship. For these
reasons, among others, the reports and the contents thereof are intended to
remain and shall remain non-public, except as otherwise agreed to by the parties
in writing, or except to the extent that the Offices determine in their sole
discretion that disclosure would be in furtherance of the Offices’ discharge of
its duties and responsibilities or is otherwise required by law.

 

C-13

--------------------------------------------------------------------------------

ATTACHMENT D

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

 

UNITED STATES OF AMERICA

 

                v.

 

ATLANTA MEDICAL CENTER, INC.

  

CRIMINAL NO. 16-CR-350

 

VIOLATION:

 

18 U.S.C. § 371

PLEA AGREEMENT

The United States of America, by and through the United States Department of
Justice, Criminal Division, Fraud Section, and the United States Attorney’s
Office for the Northern District of Georgia (collectively, the “Department of
Justice” or the “Department”), and the Defendant, Atlanta Medical Center, Inc.
(the “Defendant”), by and through its undersigned attorneys, and through its
authorized representative, pursuant to authority granted by the Board of
Directors of Tenet Healthcare Corporation (“Tenet”), hereby submit and enter
into this plea agreement (the “Agreement”) pursuant to Rule 11(c)(1)(C) of the
Federal Rules of Criminal Procedure. The terms and conditions of this Agreement
are as follows:

 

1

--------------------------------------------------------------------------------

The Defendant’s Agreement

1. Pursuant to Fed. R. Crim. P. 11(c)(1)(C), the Defendant will waive its right
to grand jury indictment and its right to challenge venue in the District Court
for the Northern District of Georgia, and will plead guilty to a one count
criminal Information charging the Defendant with conspiring under Title 18,
United States Code, Section 371, to violate the Anti-Kickback Statute, Title 42,
United States Code, Sections 1320a-7b(b)(2)(A) and (B) and 1320a-7b(b)(1)(A) and
(B), and to defraud the United States. The Defendant further agrees to persist
in that plea through sentencing.

2. The Defendant understands that, to be guilty of this offense, the following
essential elements of the offense must be satisfied:

 

  a. The Defendant and one or more persons in some way agreed to try to
accomplish a shared and unlawful plan;

 

  b. The Defendant knew the unlawful purpose of the plan, that is:

 

  i.

To knowingly and willfully offer or pay any remuneration (including any
kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash
or in kind to any person to induce such person (A) to refer an

 

2

--------------------------------------------------------------------------------

  individual to a person for the furnishing or arranging for the furnishing of
an item or service for which payment could be made in whole or in part by a
Federal health care program; or (B) to purchase, lease, order or arrange for or
recommend purchasing, leasing, or ordering any good, facility, service, or item
for which payment may be made in whole or in part under a Federal health care
program, in violation of Title 42, United States Code, Sections
1320a-7b(b)(2)(A) and (B);

 

  ii. To knowingly and willfully solicit or receive any remuneration (including
any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in
cash or in kind (A) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or part under a Federal health care program, or
(B) in return for purchasing, leasing, ordering or arranging for the furnishing
of any item or service for which payment can be made in whole or part under a
Federal health care program, in violation of Title 42, United States Code,
Sections 1320a-7b(b)(1)(A) and (B); and

 

3

--------------------------------------------------------------------------------

  iii. To defraud the United States by cheating it out of money or property or
interfering with its lawful government functions by deceit, craft or trickery;

 

  c. The Defendant willfully joined in the unlawful plan;

 

  d. During the conspiracy, one of the conspirators knowingly engaged in at
least one overt act as described in the Criminal Information;

 

  e. The overt act was committed on or about the time alleged and with the
purpose of carrying out or accomplishing some object of the conspiracy;

 

  f. Each element of the offense listed above was committed by one or more of
the Defendant’s agents;

 

  g. In committing those acts the agent or agents intended, at least in part, to
benefit the Defendant; and

 

4

--------------------------------------------------------------------------------

  h. Each act was within the course and scope of the agent’s or agents’
employment.

3. The Defendant understands and agrees that this Agreement is between the
Department and the Defendant and does not bind any other division or section of
the Department of Justice or any other federal, state, or local prosecuting,
administrative, or regulatory authority. Nevertheless, the Department will bring
this Agreement to the attention of other prosecuting authorities or other
agencies, if requested by the Defendant.

4. The Defendant agrees that this Agreement will be executed by an authorized
corporate representative. The Defendant further agrees that a resolution duly
adopted by the Board of Directors of Tenet, the Defendant’s indirect parent
company, in the form attached to this Agreement as Exhibit 1, authorizes the
Defendant to enter into this Agreement and take all necessary steps to
effectuate this Agreement, and that the signatures on this Agreement by the
Defendant and its counsel are authorized by the Board of Directors of Tenet, the
Defendant’s indirect parent company, on behalf of the Defendant.

5. The Defendant agrees that it has the full legal right, power, and authority
to enter into and perform all of its obligations under this Agreement.

 

5

--------------------------------------------------------------------------------

6. The Department enters into this Agreement based on the individual facts and
circumstances presented by this case and the Defendant. Among the factors
considered were the following:

 

  a. In April 2016, Tenet HealthSystem Medical, Inc. (“Tenet Subsidiary”), the
Defendant’s direct parent company, sold substantially all of its Georgia
hospitals’ assets and business operations, including those of (1) the Defendant,
(2) North Fulton Medical Center, Inc. d/b/a North Fulton Hospital, and
(3) Spalding Regional Medical Center, Inc. d/b/a Spalding Regional Medical
Center, pursuant to an Asset Sale Agreement. These entities, all indirect
subsidiaries of Tenet, now have no operating assets and no plans to resume
business operations;

 

  b. Tenet and the Department, the Department of Justice’s Civil Division, Fraud
Section, the U.S. Attorney’s Office for the Middle District of Georgia, the
State of Georgia and the State of South Carolina have reached an agreement on a
global resolution to resolve Tenet and its subsidiaries’ criminal and civil
liability relating to the government’s investigation of violations of the
Anti-Kickback Statute at certain Tenet hospitals, which has the following
components:

 

6

--------------------------------------------------------------------------------

  i. The Defendant has agreed to plead guilty to one count of conspiring under
Title 18, United States Code, Section 371 to violate the Anti-Kickback Statute,
Title 42, United States Code, Sections 1320a-7b(b)(2)(A) and (B) and
1320a-7b(b)(1)(A) and (B), and to defraud the United States, and to pay a
$84,696,727 forfeiture money judgment pursuant to this Agreement;

 

  ii. North Fulton Medical Center, Inc. d/b/a North Fulton Hospital has agreed
to plead guilty to one count of conspiring under Title 18, United States Code,
Section 371 to violate the Anti-Kickback Statute, Title 42, United States Code,
Sections 1320a-7b(b)(2)(A) and (B) and 1320a-7b(b)(1)(A) and (B), and to defraud
the United States, and to pay a $60,019,618 forfeiture money judgment pursuant
to a negotiated plea agreement with the Department, which is incorporated by
reference into this Agreement (Exhibit 3);

 

7

--------------------------------------------------------------------------------

  iii. Tenet Subsidiary and the Department have entered into a Non-Prosecution
Agreement (NPA), which is incorporated by reference into this Agreement (Exhibit
4). The NPA requires, among other things: (1) Tenet Subsidiary and Tenet to
cooperate with the Department in any and all matters relating to the conduct
described in the NPA and its Attachment A and other conduct under investigation
by the Department; and (2) Tenet to retain an Independent Compliance Monitor for
a term of 3 years to specifically address and reduce the risk of recurrence of
violations of the Anti-Kickback Statute and the Stark Law.

 

  iv. Tenet has entered into a civil Settlement Agreement with the United
States, the State of Georgia and the State of South Carolina, which is
incorporated by reference into this Agreement (Exhibit 5), and has agreed to pay
$368,000,000 to the United States, the State of Georgia and the State of South
Carolina to resolve its civil liability for certain claims, including under the
federal False Claims Act and State of Georgia Medicaid False Claims Act.

 

8

--------------------------------------------------------------------------------

  c. The global resolution is contingent upon the Court’s acceptance of the plea
and recommended sentence in this case, and in the case of the United States v.
North Fulton Medical Center, Inc. d/b/a North Fulton Hospital, as proposed by
the parties.

7. The Defendant agrees to abide by all terms and obligations of this Agreement
as described herein, including, but not limited to, the following:

a. to plead guilty as set forth in this Agreement;

b. to abide by all sentencing stipulations contained in this Agreement;

c. to appear, through its duly appointed representatives, as ordered for all
court appearances, and obey any other ongoing court order in this matter,
consistent with all applicable U.S. laws, procedures, and regulations;

d. to commit no further crimes;

e. to be truthful at all times with the Court; and

f. to pay the applicable financial amounts and special assessment.

 

9

--------------------------------------------------------------------------------

The United States’ Agreement

8. In exchange for the guilty plea of the Defendant and the complete fulfillment
of all of its obligations under this Agreement, the Department agrees that it
will not file additional criminal charges against the Defendant or any of its
direct or indirect affiliates, subsidiaries, or joint ventures relating to any
of the conduct described in Exhibit 2, except for the charges specified in the
plea agreement between the Department and North Fulton and except as specified
in the NPA between the Department and Tenet Subsidiary. This Agreement does not
close or preclude the investigation or prosecution of any natural persons,
including any officers, directors, employees, agents, or consultants of the
Defendant or its parent companies, direct or indirect affiliates, subsidiaries,
or joint ventures, who may have been involved in any of the matters set forth in
the Information, Exhibit 2, or in any other matters. The Defendant agrees that
nothing in this Agreement is intended to release the Defendant from any and all
of the Defendant’s excise and income tax liabilities and reporting obligations
for any and all income not properly reported and/or legally or illegally
obtained or derived.

 

10

--------------------------------------------------------------------------------

Factual Basis

9. The Defendant is pleading guilty because it is guilty of the charges
contained in the Information. The Defendant admits, agrees, and stipulates that
the factual allegations set forth in the Information and Exhibit 2 are true and
correct, that it is responsible for the acts of its officers, directors,
employees, and agents described in the Information and Exhibit 2, and that the
Information and Exhibit 2 accurately reflect the Defendant’s criminal conduct.

The Defendant’s Waiver of Rights, Including the Right to Appeal

10. Federal Rule of Criminal Procedure 11(f) and Federal Rule of Evidence 410
limit the admissibility of statements made in the course of plea proceedings or
plea discussions in both civil and criminal proceedings, if the guilty plea is
later withdrawn. The Defendant expressly warrants that it has discussed these
rules with its counsel and understands them. Solely to the extent set forth
below, the Defendant voluntarily waives and gives up the rights enumerated in
Federal Rule of Criminal Procedure 11(f) and Federal Rule of Evidence 410.
Specifically, the Defendant understands and agrees that the statements set forth
in Exhibit 2 are admissible against it for any purpose in any federal criminal
proceeding if, even though the Department has fulfilled all of its obligations
under this Agreement and the Court has imposed the agreed-upon sentence, the
Defendant nevertheless withdraws its guilty plea.

 

11

--------------------------------------------------------------------------------

11. The Defendant is satisfied that the Defendant’s attorneys have rendered
effective assistance. The Defendant understands that by entering into this
Agreement, the Defendant surrenders certain rights as provided in this
Agreement. The Defendant understands that the rights of criminal defendants
include the following:

 

  a. the right to plead not guilty and to persist in that plea;

 

  b. the right to a jury trial;

 

  c. the right to be represented by counsel – and if necessary have the court
appoint counsel – at trial and at every other stage of the proceedings;

 

  d. the right at trial to confront and cross-examine adverse witnesses, to be
protected from compelled self-incrimination, to testify and present evidence,
and to compel the attendance of witnesses; and

 

  e. pursuant to Title 18, United States Code, Section 3742, the right to appeal
the sentence imposed.

 

12

--------------------------------------------------------------------------------

Nonetheless, the Defendant knowingly waives the right to appeal or collaterally
attack the conviction and any sentence within the statutory maximum described
below (or the manner in which that sentence was determined) on the grounds set
forth in Title 18, United States Code, Section 3742, or on any ground whatsoever
except those specifically excluded in this Paragraph, in exchange for the
concessions made by the Department in this Plea Agreement. This Agreement does
not affect the rights or obligations of the United States as set forth in Title
18, United States Code, Section 3742(b). The Defendant also knowingly waives the
right to bring any collateral challenge to either the conviction, or the
sentence imposed in this case. The Defendant hereby waives all rights, whether
asserted directly or by a representative, to request or receive from any
department or agency of the United States any records pertaining to the
investigation or prosecution of this case, including without limitation any
records that may be sought under the Freedom of Information Act, Title 5, United
States Code, Section 552, or the Privacy Act, Title 5, United States Code,
Section 552a. The Defendant waives all defenses based on the statute of
limitations and venue with respect to any prosecution related to the conduct
described in Exhibit 2 or the Information, including any prosecution that is not
time-barred on the date that this Agreement is

 

13

--------------------------------------------------------------------------------

signed in the event that: (a) the conviction is later vacated for any reason;
(b) the Defendant violates this Agreement; or (c) the plea is later withdrawn,
provided such prosecution is brought within one year of any such vacation of
conviction, violation of agreement, or withdrawal of plea plus the remaining
time period of the statute of limitations as of the date that this Agreement is
signed. The Department is free to take any position on appeal or any other
post-judgment matter. The parties agree that any challenge to the Defendant’s
sentence that is not foreclosed by this Paragraph will be limited to that
portion of the sentencing calculation that is inconsistent with (or not
addressed by) this waiver. Nothing in the foregoing waiver of appellate and
collateral review rights shall preclude the Defendant from raising a claim of
ineffective assistance of counsel in an appropriate forum.

Penalty

12. The statutory maximum sentence that the Court can impose for a violation of
Title 18, United States Code, Section 371, is a fine of $500,000 or twice the
gross pecuniary gain the conspirators derived from the crime or twice the gross
pecuniary loss caused to the victims of the crime by the conspirators, whichever
is greatest, Title 18, United States Code, Section 3571(c), (d); a term of five
years of probation, Title 18, United States Code, Section 3561(c)(1); a

 

14

--------------------------------------------------------------------------------

mandatory special assessment of $400 per count, Title 18, United States Code,
Section 3013(a)(2)(B); restitution to victims of the offense, Title 18, United
States Code, Section 3663A(c)(1)(A)(ii); and forfeiture of any property, real or
personal, that constitutes or is derived, directly or indirectly, from gross
proceeds traceable to the offense, Title 18, United States Code,
Section 982(a)(7).

Sentencing Recommendation

13. The parties agree that pursuant to United States v. Booker, 543 U.S. 220
(2005), the Court must determine an advisory sentencing guideline range pursuant
to the United States Sentencing Guidelines. The Court will then determine a
reasonable sentence within the statutory range after considering the advisory
sentencing guideline range and the factors listed in Title 18, United States
Code, Section 3553(a). The parties’ agreement herein to any guideline sentencing
factors constitutes proof of those factors sufficient to satisfy the applicable
burden of proof. The Defendant also understands that if the Court accepts this
Agreement, the Court is bound by the sentencing provisions in Paragraph 15.

14. The Department and the Defendant agree that Defendant’s Guidelines fine
range is calculated as follows:

 

  a. The 2015 U.S.S.G. are applicable to this matter.

 

15

--------------------------------------------------------------------------------

  b. Base Fine. Based upon U.S.S.G. § 8C2.4(a)(2), the base fine is $39,897,696
(the pecuniary gain to the organization from the offense).

 

  c. Culpability Score. Based upon U.S.S.G. § 8C2.5, the culpability score is 8,
calculated as follows:

 

  

(a)              Base Culpability Score

   5   

(b)(2)        the organization had 1,000 or more employees and an individual
within high-level personnel of the unit participated in, condoned, or was
willfully ignorant of the offense

   +4   

(g)(3)        The organization clearly demonstrated recognition and affirmative
acceptance of responsibility for its criminal conduct

   -1      

 

   TOTAL    8

 

  d. Calculation of Fine Range:

 

  Base Fine    $39,897,696   Multipliers    1.60 (min)/3.20 (max)   Fine Range
   $63,836,313 (min)/ $127,672,627 (max)

15. Pursuant to Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure, the
Department and the Defendant agree that the appropriate disposition of this case
is as follows, taking into consideration all of the factors outlined in
Paragraph 6 and in 18 U.S.C. §§ 3553(a) and 3572:

 

16

--------------------------------------------------------------------------------

  a. a forfeiture money judgment in the amount of $84,696,727, in accordance
with the terms set forth in Paragraphs 17-24, below;

 

  b. a mandatory special assessment in the amount of $400, payable to the Clerk
of Court for the Northern District of Georgia, on or before the date of
sentencing;

 

  c. the Department and the Defendant agree to recommend that no fine be
imposed. The Department and the Defendant agree that a $119,693,088 fine within
the calculated Guidelines range (but before application of the statutory maximum
fine established by 18 U.S.C. §§ 3571(c), (d)) would be appropriate in this
case, but agree that this fine amount should be fully offset by a portion of the
$368,000,000 civil settlement amount that Tenet has agreed to pay under the
civil Settlement Agreement;

 

  d. the Department agrees that it will not seek a separate restitution order
and the parties agree that the appropriate disposition of this case does not
include a restitution order under 18 U.S.C. § 3663A(c)(1)(A)(ii) for:

 

17

--------------------------------------------------------------------------------

  i. the federal health care program victims, the Georgia Medicaid Program, the
South Carolina Medicaid Program, and the Medicare Program, in light of Tenet’s
agreement to pay $368,000,000 to the United States, the State of Georgia, and
the State of South Carolina under the civil Settlement Agreement; or

 

  ii. the non-federal health care program victims because the parties agree
that, together or separately, the number of identifiable victims is so large as
to make restitution impracticable and determining complex issues of fact related
to the cause or amount of the victims’ losses would complicate or prolong the
sentencing process to a degree that the need to provide restitution to any
victim is outweighed by the burden on the sentencing process.

16. The Defendant acknowledges that no tax deduction may be sought in connection
with the payment of any part of the forfeiture money judgment of $84,696,727
referenced in Paragraphs 15(a), above, and 18-24, below.

 

18

--------------------------------------------------------------------------------

17. The Defendant acknowledges and agrees that pursuant to Title 18, United
States Code, Section 982(a)(7) and Title 18, Section 24(a)(1), the United States
is entitled to a money judgment in the amount of $84,696,727 in United States
currency, representing the amount of proceeds obtained as a result of the
conspiracy to violate Title 42, United States Code, Sections 1320a-7b(b)(2)(A)
and (B) and 1320a-7b(b)(1)(A) and (B).

18. The Defendant agrees to satisfy the money judgment described in Paragraph
17, above, within ten (10) days of its sentencing via a wire transfer to the
account provided by the United States Marshal’s Service.

19. The Defendant waives and abandons all right, title, and interest in the
funds used to pay the money judgment and agrees to the judicial forfeiture of
said funds in satisfaction of the forfeiture money judgment. The Defendant
acknowledges that the United States will dispose of forfeited funds according to
law.

20. The Defendant agrees not to file any claim or petition for remission in any
administrative or judicial proceeding pertaining to the funds used to satisfy
the money judgment.

21. The Defendant agrees to hold the United States and its agents and employees
harmless from any claims made in connection with the forfeiture and disposal of
property and/or funds connected to this case.

 

19

--------------------------------------------------------------------------------

22. The Defendant agrees to waive all constitutional, statutory and equitable
challenges in any manner (including direct appeal, a Section 2255 petition,
habeas corpus, or any other means) to any forfeiture carried out in accordance
with this Agreement on any grounds, including that the forfeiture constitutes an
excessive fine or punishment.

23. The Defendant acknowledges that it is not entitled to use forfeited funds,
including the funds used to satisfy the money judgments, to satisfy any fine,
restitution, cost of imprisonment, tax obligations, or any other penalty the
Court may impose upon the Defendant in addition to forfeiture.

24. The Defendant consents to the Court’s entry of a preliminary order of
forfeiture with forfeiture money judgments, which will be final as to the
Defendant, as part of its sentence, and incorporated into the judgment against
it.

25. This Agreement is presented to the Court pursuant to Fed. R. Crim. P.
11(c)(1)(C). The Department and the Defendant understand that the Court retains
complete discretion to accept or reject the recommended sentence provided for in
Paragraph 15 of this Agreement. The Defendant understands that, if the Court
rejects this Agreement, the Court must: (a) inform the parties that the Court
rejects the Agreement; (b) advise the Defendant’s counsel that the Court is not
required to

 

20

--------------------------------------------------------------------------------

follow the Agreement and afford the Defendant the opportunity to withdraw its
plea; and (c) advise the Defendant that if the plea is not withdrawn, the Court
may dispose of the case less favorably toward the Defendant than the Agreement
contemplated. The Defendant further understands that if the Court refuses to
accept any provision of this Agreement, neither party shall be bound by the
provisions of the Agreement.

26. The Department and the Defendant jointly submit that this Plea Agreement,
together with the record that will be created by the Department and the
Defendant at the plea and sentencing hearings, will provide sufficient
information concerning the Defendant, the crime charged in this case, and the
Defendant’s role in the crime to enable the meaningful exercise of sentencing
authority by the Court under 18 U.S.C. § 3553(a).

27. The Department and the Defendant agree, subject to the Court’s approval, to
waive the requirement for a presentence report, pursuant to Federal Rule of
Criminal Procedure 32(c)(1)(A), based on a finding by the Court that the record
contains information sufficient to enable the Court to meaningfully exercise its
sentencing power and to seek sentencing by the Court immediately following the
Rule 11 plea hearing. However, the parties agree that in the event the Court

 

21

--------------------------------------------------------------------------------

orders that the entry of the guilty plea and sentencing occur at separate
proceedings, such an order will not affect the agreement set forth herein.
Additionally, if the Court directs the preparation of a presentence report, the
Department and the Defendant reserve the right to inform the Court and the
Probation Office of all facts, circumstances and law related to the Defendant’s
case, and to respond to any questions from the Court and the Probation Office,
and to any misstatements of law or fact. At the time of the plea hearing, the
parties will suggest mutually agreeable and convenient dates for the sentencing
hearing with adequate time for any objections to the presentence report and
consideration by the Court of the presentence report and the parties’ sentencing
submissions.

Breach of Agreement

28. The Plea Agreement is effective when signed by the Defendant, the
Defendant’s attorney, an attorney representative of the United States Department
of Justice, Criminal Division, Fraud Section, and an attorney representative of
the United States Attorney’s Office for the Northern District of Georgia.

 

22

--------------------------------------------------------------------------------

29. In the event that the Department believes that the Defendant has failed to
comply with any material provision of this Agreement and thereby breached this
Agreement, the Department agrees to notify the Defendant, through counsel, in
writing. The Defendant shall, within thirty (30) days of receipt of such notice,
have the opportunity to respond to the Department in writing to explain the
nature and circumstances of such breach, as well as the actions the Defendant
has taken to address and remediate the situation.

30. If the Department determines that the Defendant has failed to comply with
any material provision of this Agreement, the Department may, at its sole
option, be released from its commitments under this Plea Agreement in its
entirety by notifying the Defendant, through counsel, in writing. The Department
may also pursue all remedies available under the law, even if it elects not to
be released from its commitments under this Agreement. The Defendant agrees that
no such breach by the Defendant of an obligation under this Agreement shall be
grounds for withdrawal of its guilty plea. The Defendant agrees that should it
breach any material provision of this Agreement, the Department will have the
right to use against the Defendant before any grand jury, at any trial, and for
sentencing purposes, any statements which may be made by the Defendant
(including the statements and facts set forth in Exhibit 2), and any
information, materials, documents, or objects which may be provided by it to the
government subsequent to the Agreement, without any limitation.

 

23

--------------------------------------------------------------------------------

31. The Defendant understands and agrees that this Rule 11(c)(1)(C) plea
agreement and its agreed-upon criminal disposition:

 

  a. are wholly dependent upon (1) Tenet Subsidiary’s and Tenet’s compliance
with the material terms of the attached NPA; and (2) Tenet’s timely compliance
with the material terms of the attached civil Settlement Agreement; and

 

  b. failure by (1) the Defendant to comply fully with the material terms of
this Agreement, (2) Tenet Subsidiary and Tenet to comply fully with the material
terms of the attached NPA, or (3) Tenet to comply fully with the material terms
of the attached civil Settlement Agreement will constitute a breach of this
Agreement.

32. In the event the Defendant at any time hereafter breaches any material
provision of this Agreement, the Defendant understands that (1) the Department
will, as of the date of that breach, be relieved of any obligations it may have
in this Agreement and the attached NPA, including but not limited to the promise
to not further prosecute the Defendant as set forth in this Agreement; and
(2) the Defendant will not be relieved of its obligation to make the payments
set forth in this Agreement, nor will it be entitled to return of any monies
already paid.

 

24

--------------------------------------------------------------------------------

Moreover, in the event of a material breach of this Agreement, the Defendant
agrees and understands that the Department may pursue any and all charges that
might otherwise not have been brought but for this Agreement, and the Defendant
hereby waives, and agrees it will not interpose, any defense to any charges
brought against it which it might otherwise be able to assert under the
Constitution for pre-indictment delay, any statute of limitations, or the Speedy
Trial Act.

Public Statements by the Defendant

33. The Defendant expressly agrees that it shall not, through present or future
attorneys, officers, directors, employees, agents or any other person authorized
to speak for the Defendant make any public statement, in litigation or
otherwise, contradicting the acceptance of responsibility by the Defendant set
forth above or the facts described in the Information and Exhibit 2. Any such
contradictory statement shall, subject to cure rights of the Defendant described
below, constitute a material breach of this Agreement, and the Defendant
thereafter shall be subject to prosecution as set forth in Paragraphs 30-32 of
this Agreement. The decision whether any public statement by any such person
contradicting a fact contained in the Information or Exhibit 2 will be imputed
to the Defendant for the purpose of determining whether it has breached this
Agreement shall be within the

 

25

--------------------------------------------------------------------------------

sole discretion of the Department. If the Department determines that a public
statement by any such person contradicts in whole or in part a statement
contained in the Information or Exhibit 2, the Department shall so notify the
Defendant, and the Defendant may avoid a breach of this Agreement by publicly
repudiating such statement(s) within five (5) business days after notification.
The Defendant shall be permitted to raise defenses and to assert affirmative
claims in other proceedings relating to the matters set forth in the Information
and Exhibit 2 provided that such defenses and claims do not contradict, in whole
or in part, a statement contained in the Information or Exhibit 2. This
Paragraph does not apply to any statement made by any present or former officer,
director, employee, or agent of the Defendant in the course of any criminal,
regulatory, or civil case initiated against such individual, unless such
individual is speaking on behalf of the Defendant.

34. The Defendant agrees that if it or any of its direct or indirect parents,
subsidiaries or affiliates issues a press release or holds any press conference
in connection with this Agreement, the Defendant shall first consult the
Department to determine (a) whether the text of the release or proposed
statements at the press conference are true and accurate with respect to matters
between the Department and the Defendant; and (b) whether the Department has any
objection to the release or statement.

 

26

--------------------------------------------------------------------------------

Complete Agreement

35. This document states the full extent of the Agreement between the parties.
There are no other promises or agreements, express or implied. Any modification
of this Agreement shall be valid only if set forth in writing in a supplemental
or revised plea agreement signed by all parties.

AGREED:

FOR ATLANTA MEDICAL CENTER, INC.:

 

Date:                        By:  

         

  WILLIAM MORRISON   Vice President and   Assistant General Counsel of   TENET
HEALTHCARE CORPORATION Date:                       By:  

         

  KATHRYN H. RUEMMLER   LATHAM & WATKINS, LLP   Outside counsel for   TENET
HEALTHCARE CORPORATION

 

27

--------------------------------------------------------------------------------

FOR THE DEPARTMENT OF JUSTICE:

 

JOHN A. HORN

U.S. ATTORNEY

NORTHERN DISTRICT OF GEORGIA

  

ANDREW WEISSMANN

CHIEF

CRIMINAL DIVISION, FRAUD SECTION

U.S. DEPARTMENT OF JUSTICE

RANDY S. CHARTASH

CHIEF, ECONOMIC CRIME SECTION

  

JOSEPH S. BEEMSTERBOER

DEPUTY CHIEF, FRAUD SECTION

 

  

 

STEPHEN H. MCCLAIN

DEPUTY CHIEF,

ECONOMIC CRIME SECTION

  

ROBERT A. ZINK

ASSISTANT CHIEF, FRAUD SECTION

  

 

   SALLY B. MOLLOY   

 

   ANTONIO M. POZOS   

TRIAL ATTORNEYS, FRAUD SECTION

HEALTH CARE UNIT

CORPORATE STRIKE FORCE

 

28

--------------------------------------------------------------------------------

ATTACHMENT E

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

 

UNITED STATES OF AMERICA

 

                v.

 

NORTH FULTON MEDICAL CENTER,

INC.

D/B/A NORTH FULTON HOSPITAL

  

CRIMINAL NO. 16-CR-350

 

VIOLATION:

 

18 U.S.C. § 371

PLEA AGREEMENT

The United States of America, by and through the Department of Justice, Criminal
Division, Fraud Section, and the United States Attorney’s Office for the
Northern District of Georgia (collectively, the “Department of Justice” or the
“Department”), and the Defendant, North Fulton Medical Center, Inc. d/b/a North
Fulton Hospital (the “Defendant”), by and through its undersigned attorneys, and
through its authorized representative, pursuant to authority granted by the
Board of Directors of Tenet Healthcare Corporation (“Tenet”), the Defendant’s
indirect parent company, hereby submit and enter into this plea agreement (the
“Agreement”) pursuant to Rule 11(c)(1)(C) of the Federal Rules of Criminal
Procedure. The terms and conditions of this Agreement are as follows:

 

1

--------------------------------------------------------------------------------

The Defendant’s Agreement

1. Pursuant to Fed. R. Crim. P. 11(c)(1)(C), the Defendant agrees to waive its
right to grand jury indictment and its right to challenge venue in the District
Court for the Northern District of Georgia and to plead guilty to a one count
criminal Information charging the Defendant with conspiring under Title 18,
United States Code, Section 371, to violate the Anti-Kickback Statute, Title 42,
United States Code, Sections 1320a-7b(b)(2)(A) and (B) and 1320a-7b(b)(1)(A) and
(B) and to defraud the United States. The Defendant further agrees to persist in
that plea through sentencing.

2. The Defendant understands that, to be guilty of this offense, the following
essential elements of the offense must be satisfied:

 

  a. The Defendant and one or more persons in some way agreed to try to
accomplish a shared and unlawful plan;

 

  b. The Defendant knew the unlawful purpose of the plan, that is:

 

  i.

To knowingly and willfully offer or pay any remuneration (including any
kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash
or in kind to any person to induce such person (A) to refer an

 

2

--------------------------------------------------------------------------------

  individual to a person for the furnishing or arranging for the furnishing of
an item or service for which payment could be made in whole or in part by a
Federal health care program; or (B) to purchase, lease, order or arrange for or
recommend purchasing, leasing, or ordering any good, facility, service, or item
for which payment may be made in whole or in part under a Federal health care
program, in violation of Title 42, United States Code, Sections
1320a-7b(b)(2)(A) and (B); and

 

  ii. To knowingly and willfully solicit or receive any remuneration (including
any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in
cash or in kind (A) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or part under a Federal health care program, or
(B) in return for purchasing, leasing, ordering or arranging for the furnishing
of any item or service for which payment can be made in whole or part under a
Federal health care program, in violation of Title 42, United States Code,
Sections 1320a-7b(b)(1)(A) and (B); and

 

3

--------------------------------------------------------------------------------

  iii. To defraud the United States by cheating it out of money or property or
interfering with its lawful government functions by deceit, craft or trickery;

 

  c. The Defendant willfully joined in the unlawful plan;

 

  d. During the conspiracy, one of the conspirators knowingly engaged in one
overt act described in the Criminal Information;

 

  e. The overt act was knowingly committed on or about the time alleged and with
the purpose of carrying out or accomplishing some object of the conspiracy;

 

  f. Each element of the offense listed above was committed by one or more of
the Defendant’s agents;

 

  g. In committing those acts, the agent or agents intended, at least in part,
to benefit the Defendant; and

 

  h. Each act was within the course and scope of the agent’s or the agents’
employment.

 

4

--------------------------------------------------------------------------------

3. The Defendant understands and agrees that this Agreement is between the
Department and the Defendant and does not bind any other division or section of
the Department of Justice or any other federal, state, or local prosecuting,
administrative, or regulatory authority. Nevertheless, the Department will bring
this Agreement to the attention of other prosecuting authorities or other
agencies, if requested by the Defendant.

4. The Defendant agrees that this Agreement will be executed by an authorized
corporate representative. The Defendant further agrees that a resolution duly
adopted by the Board of Directors of Tenet, the Defendant’s indirect parent
company, in the form attached to this Agreement as Exhibit 1, authorizes the
Defendant to enter into this Agreement and take all necessary steps to
effectuate this Agreement, and that the signatures on this Agreement by the
Defendant and its counsel are authorized by the Board of Directors of Tenet, the
Defendant’s indirect parent company, on behalf of the Defendant.

5. The Defendant agrees that it has the full legal right, power, and authority
to enter into and perform all of its obligations under this Agreement.

 

5

--------------------------------------------------------------------------------

6. The Department enters into this Agreement based on the individual facts and
circumstances presented by this case and the Defendant. Among the factors
considered were the following:

 

  a. In April 2016, Tenet HealthSystem Medical, Inc. (“Tenet Subsidiary”), the
Defendant’s direct parent company, sold substantially all of its Georgia
hospitals’ assets and business operations, including those of (1) the Defendant,
(2) Atlanta Medical Center, Inc., and (3) Spalding Regional Medical Center, Inc.
d/b/a Spalding Regional Medical Center, pursuant to an Asset Sale Agreement.
These entities, all indirect subsidiaries of Tenet, now have no operating assets
and no plans to resume business operations;

 

  b. Tenet and the Department, the Department of Justice’s Civil Division, the
United States Attorney’s Office for the Middle District of Georgia, the State of
Georgia, and the State of South Carolina have reached an agreement on a global
resolution to resolve Tenet and its subsidiaries’ criminal and civil liability
relating to the government’s investigation of violations of the Anti-Kickback
Statute at certain Tenet hospitals, which has the following components:

 

6

--------------------------------------------------------------------------------

  i. The Defendant has agreed to plead guilty to one count of conspiring under
Title 18, United States Code, Section 371 to violate the Anti-Kickback Statute,
42 U.S.C. § 1320a-7b(b)(2)(A) and (B) and 1320a-7b(b)(1)(A) and (B), and to
defraud the United States, and to pay a $60,091,618 forfeiture money judgment
pursuant to this Agreement;

 

  ii. Atlanta Medical Center, Inc. has agreed to plead guilty to one count of
conspiring under Title 18, United States Code, Section 371 to violate the
Anti-Kickback Statute, Title 42 United States Code, Sections 1320a-7b(b)(2)(A)
and (B) and 1320a-7b(b)(1)(A) and (B), and to defraud the United States and to
pay a $84,696,727 forfeiture money judgment pursuant to a negotiated plea
agreement, which is attached as Exhibit 3 and is expressly incorporated herein
by reference;

 

7

--------------------------------------------------------------------------------

  iii. Tenet Subsidiary and the Department have entered into a Non-Prosecution
Agreement (NPA), which is incorporated by reference into this Agreement (Exhibit
4). The NPA requires, among other things: (1) Tenet Subsidiary and Tenet to
cooperate with the Department in any and all matters relating to the conduct
described in the NPA and its Attachment A and other conduct under investigation
by the Department; and (2) Tenet to retain an Independent Compliance Monitor for
a term of 3 years to specifically address and reduce the risk of recurrence of
violations of the Anti-Kickback Statute and the Stark Law; and

 

  iv. Tenet has entered into a civil Settlement Agreement with the United
States, the State of Georgia, and the State of South Carolina, which is
incorporated by reference into this Agreement (Exhibit 5) and has agreed to pay
$368,000,000 to the United States and the State of Georgia to resolve its civil
liability for certain claims, including under the federal False Claims Act and
State of Georgia Medicaid False Claims Act.

 

8

--------------------------------------------------------------------------------

  c. The global resolution, including the civil and administrative remedies, is
contingent upon the Court’s acceptance of the plea and recommended sentence in
this case, and in the case of United States v. Atlanta Medical Center, Inc., as
proposed by the parties.

7. The Defendant agrees to abide by all terms and obligations of this Agreement
as described herein, including, but not limited to, the following:

a. to plead guilty as set forth in this Agreement;

b. to abide by all sentencing stipulations contained in this Agreement;

c. to appear, through its duly appointed representatives, as ordered for all
court appearances, and obey any other ongoing court order in this matter,
consistent with all applicable U.S. laws, procedures, and regulations;

d. to commit no further crimes;

e. to be truthful at all times with the Court; and

f. to pay the applicable financial amounts and special assessment.

 

9

--------------------------------------------------------------------------------

The United States’ Agreement

8. In exchange for the guilty plea of the Defendant and the complete fulfillment
of all of its obligations under this Agreement, the Department agrees that it
will not file additional criminal charges against the Defendant or any of its
direct or indirect affiliates, subsidiaries, or joint ventures relating to any
of the conduct described in Exhibit 2, except for the charges specified in the
plea agreement between the Department and Atlanta Medical and except as
specified in the NPA between the Department and Tenet Subsidiary. This Agreement
does not close or preclude the investigation or prosecution of any natural
persons, including any officers, directors, employees, agents, or consultants of
the Defendant or its parent companies, direct or indirect affiliates,
subsidiaries, or joint ventures, who may have been involved in any of the
matters set forth in the Information, Exhibit 2, or in any other matters. The
Defendant agrees that nothing in this Agreement is intended to release the
Defendant from any and all of the Defendant’s excise and income tax liabilities
and reporting obligations for any and all income not properly reported and/or
legally or illegally obtained or derived.

 

10

--------------------------------------------------------------------------------

Factual Basis

9. The Defendant is pleading guilty because it is guilty of the charges
contained in the Information. The Defendant admits, agrees, and stipulates that
the factual allegations set forth in the Information and Exhibit 2 are true and
correct, that it is responsible for the acts of its officers, directors,
employees, and agents described in the Information and Exhibit 2, and that the
Information and Exhibit 2 accurately reflect the Defendant’s criminal conduct.

The Defendant’s Waiver of Rights, Including the Right to Appeal

10. Federal Rule of Criminal Procedure 11(f) and Federal Rule of Evidence 410
limit the admissibility of statements made in the course of plea proceedings or
plea discussions in both civil and criminal proceedings, if the guilty plea is
later withdrawn. The Defendant expressly warrants that it has discussed these
rules with its counsel and understands them. Solely to the extent set forth
below, the Defendant voluntarily waives and gives up the rights enumerated in
Federal Rule of Criminal Procedure 11(f) and Federal Rule of Evidence 410.
Specifically, the Defendant understands and agrees that the statements set forth
in Exhibit 2 are admissible against it for any purpose in any federal criminal
proceeding if, even though the Department has fulfilled all of its obligations
under this Agreement and the Court has imposed the agreed-upon sentence, the
Defendant nevertheless withdraws its guilty plea.

 

11

--------------------------------------------------------------------------------

11. The Defendant is satisfied that the Defendant’s attorneys have rendered
effective assistance. The Defendant understands that by entering into this
Agreement, the Defendant surrenders certain rights as provided in this
Agreement. The Defendant understands that the rights of criminal defendants
include the following:

 

  a. the right to plead not guilty and to persist in that plea;

 

  b. the right to a jury trial;

 

  c. the right to be represented by counsel – and if necessary have the court
appoint counsel – at trial and at every other stage of the proceedings;

 

  d. the right at trial to confront and cross-examine adverse witnesses, to be
protected from compelled self-incrimination, to testify and present evidence,
and to compel the attendance of witnesses; and

 

  e. pursuant to Title 18, United States Code, Section 3742, the right to appeal
the sentence imposed.

 

12

--------------------------------------------------------------------------------

Nonetheless, the Defendant knowingly waives the right to appeal or collaterally
attack the conviction and any sentence within the statutory maximum described
below (or the manner in which that sentence was determined) on the grounds set
forth in Title 18, United States Code, Section 3742, or on any ground whatsoever
except those specifically excluded in this Paragraph, in exchange for the
concessions made by the Department in this Plea Agreement. This agreement does
not affect the rights or obligations of the United States as set forth in Title
18, United States Code, Section 3742(b). The Defendant also knowingly waives the
right to bring any collateral challenge to either the conviction or the sentence
imposed in this case. The Defendant hereby waives all rights, whether asserted
directly or by a representative, to request or receive from any department or
agency of the United States any records pertaining to the investigation or
prosecution of this case, including without limitation any records that may be
sought under the Freedom of Information Act, Title 5, United States Code,
Section 552, or the Privacy Act, Title 5, United States Code, Section 552a. The
Defendant waives all defenses based on the statute of limitations and venue with
respect to any prosecution related to the conduct described in Exhibit 2 or the
Information, including any prosecution that is not time-barred on the date that
this Agreement is

 

13

--------------------------------------------------------------------------------

signed in the event that: (a) the conviction is later vacated for any reason;
(b) the Defendant violates this Agreement; or (c) the plea is later withdrawn,
provided such prosecution is brought within one year of any such vacation of
conviction, violation of agreement, or withdrawal of plea plus the remaining
time period of the statute of limitations as of the date that this Agreement is
signed. The Department is free to take any position on appeal or any other
post-judgment matter. The parties agree that any challenge to the Defendant’s
sentence that is not foreclosed by this Paragraph will be limited to that
portion of the sentencing calculation that is inconsistent with (or not
addressed by) this waiver. Nothing in the foregoing waiver of appellate and
collateral review rights shall preclude the Defendant from raising a claim of
ineffective assistance of counsel in an appropriate forum.

Penalty

12. The statutory maximum sentence that the Court can impose for a violation of
Title 18, United States Code, Section 371, is a fine of $500,000 or twice the
gross pecuniary gain the conspirators derived from the crime or twice the gross
pecuniary loss caused to the victims of the crime by the conspirators, whichever
is greatest, Title 18, United States Code, Section 3571(c), (d); a term of five
years of probation, Title 18, United States Code, Section 3561(c)(1); a

 

14

--------------------------------------------------------------------------------

mandatory special assessment of $400 per count, Title 18, United States Code,
Section 3013(a)(2)(B); restitution to victims of the offense, Title 18, United
States Code, Section 3663A(c)(1)(A)(ii); and forfeiture of any property, real or
personal, that constitutes or is derived, directly or indirectly, from gross
proceeds traceable to the offense, Title 18, United States Code,
Section 982(a)(7).

Sentencing Recommendation

13. The parties agree that pursuant to United States v. Booker, 543 U.S. 220
(2005), the Court must determine an advisory sentencing guideline range pursuant
to the United States Sentencing Guidelines. The Court will then determine a
reasonable sentence within the statutory range after considering the advisory
sentencing guideline range and the factors listed in Title 18, United States
Code, Section 3553(a). The parties’ agreement herein to any guideline sentencing
factors constitutes proof of those factors sufficient to satisfy the applicable
burden of proof. The Defendant also understands that if the Court accepts this
Agreement, the Court is bound by the sentencing provisions in Paragraph 15.

14. The Department and the Defendant agree that Defendant’s Guidelines fine
range is calculated as follows:

 

  a. The 2015 U.S.S.G. are applicable to this matter.

 

15

--------------------------------------------------------------------------------

  b. Base Fine. Based upon U.S.S.G. § 8C2.4(a)(2), the base fine is $31,966,451
(the pecuniary gain to the organization from the offense).

 

  c. Culpability Score. Based upon U.S.S.G. § 8C2.5, the culpability score is 7,
calculated as follows:

 

  

(a)              Base Culpability Score

   5   

(b)(3)        the organization had 200 or more employees and an individual
within high-level personnel of the unit participated in, condoned, or was
willfully ignorant of the offense

   +3   

(g)(3)        The organization clearly demonstrated recognition and affirmative
acceptance of responsibility for its criminal conduct

   -1      

 

  

TOTAL  

   7

 

  d. Calculation of Fine Range:

 

   Base Fine    $31,966,451    Multipliers    1.40 (min)/2.80 (max)    Fine
Range    $44,753,031 (min)/ $89,506,062 (max)

15. Pursuant to Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure, the
Department and the Defendant agree that the appropriate disposition of this case
is as follows, taking into consideration all of the factors outlined in
Paragraph 6 and in 18 U.S.C. §§ 3553(a) and 3572:

 

16

--------------------------------------------------------------------------------

  a. a forfeiture money judgment in the amount of $61,091,618, in accordance
with the terms set forth in Paragraphs 17-24, below;

 

  b. a mandatory special assessment in the amount of $400, payable to the Clerk
of Court for the Northern District of Georgia, on or before the date of
sentencing;

 

  c. the Department and the Defendant agree to recommend that no fine be
imposed. The Department and the Defendant agree that a $83,112,772 fine within
the calculated Guidelines range (but before application of the statutory maximum
fine established by 18 U.S.C. §§ 3571(c), (d)) would be appropriate in this
case, but agree that this fine amount should be fully offset by a portion of the
$368,000,000 civil settlement amount that Tenet has agreed to pay under the
civil Settlement Agreement;

 

  d. the Department agrees that it will not seek a separate restitution order
and the parties agree that the appropriate disposition of this case does not
include a restitution order under 18 U.S.C. § 3663A(c)(1)(A)(ii) for:

 

17

--------------------------------------------------------------------------------

  i. the federal health care program victims, the Georgia Medicaid Program, the
South Carolina Medicaid Program, and the Medicare Program, in light of Tenet’s
agreement to pay $368,000,000 to the United States and the State of Georgia
under the civil Settlement Agreement; or

 

  ii. the non-federal health care program victims because the parties agree
that, together or separately, the number of identifiable victims is so large as
to make restitution impracticable and determining complex issues of fact related
to the cause or amount of the victims’ losses would complicate or prolong the
sentencing process to a degree that the need to provide restitution to any
victim is outweighed by the burden on the sentencing process.

16. The Defendant acknowledges that no tax deduction may be sought in connection
with the payment of any part of the forfeiture money judgment of $61,091,618
referenced in Paragraphs 15(a), above, and 18-24, below.

17. The Defendant acknowledges and agrees that pursuant to Title 18, United
States Code, Section 982(a)(7) and Title 18, Section 24(a)(1), the United States
is entitled to a money judgment in the amount of $61,091,618 in United States
currency, representing the amount of proceeds obtained as a result of the
conspiracy to violate Title 42, United States Code, Section 1320a-7b(b)(2)(A)
and (B) and 1320a-7b(b)(1)(A) and (B).

 

18

--------------------------------------------------------------------------------

18. The Defendant agrees to satisfy the money judgment described in Paragraph
17, above, within ten (10) days of sentencing via a wire transfer to the account
provided by the United States Marshal’s Service.

19. The Defendant waives and abandons all right, title, and interest in the
funds used to pay the money judgment and agrees to the judicial forfeiture of
said funds in satisfaction of the forfeiture money judgment. The Defendant
acknowledges that the United States will dispose of forfeited funds according to
law.

20. The Defendant agrees not to file any claim or petition for remission in any
administrative or judicial proceeding pertaining to the funds used to satisfy
the money judgment.

21. The Defendant agrees to hold the United States and its agents and employees
harmless from any claims made in connection with the forfeiture and disposal of
property and/or funds connected to this case.

 

19

--------------------------------------------------------------------------------

22. The Defendant agrees to waive all constitutional, statutory and equitable
challenges in any manner (including direct appeal, a Section 2255 petition,
habeas corpus, or any other means) to any forfeiture carried out in accordance
with this Agreement on any grounds, including that the forfeiture constitutes an
excessive fine or punishment.

23. The Defendant acknowledges that it is not entitled to use forfeited funds,
including the funds used to satisfy the money judgments, to satisfy any fine,
restitution, cost of imprisonment, tax obligations, or any other penalty the
Court may impose upon the Defendant in addition to forfeiture.

24. The Defendant consents to the Court’s entry of a preliminary order of
forfeiture with forfeiture money judgments, which will be final as to the
Defendant, as part of its sentence, and incorporated into the judgment against
it.

25. This Agreement is presented to the Court pursuant to Fed. R. Crim. P.
11(c)(1)(C). The Department and the Defendant understand that the Court retains
complete discretion to accept or reject the recommended sentence provided for in
Paragraph 15 of this Agreement. The Defendant understands that, if the Court
rejects this Agreement, the Court must: (a) inform the parties that the Court
rejects the Agreement; (b) advise the Defendant’s counsel that the Court is not
required to

 

20

--------------------------------------------------------------------------------

follow the Agreement and afford the Defendant the opportunity to withdraw its
plea; and (c) advise the Defendant that if the plea is not withdrawn, the Court
may dispose of the case less favorably toward the Defendant than the Agreement
contemplated. The Defendant further understands that if the Court refuses to
accept any provision of this Agreement, neither party shall be bound by the
provisions of the Agreement.

26. The Department and the Defendant jointly submit that this Plea Agreement,
together with the record that will be created by the Department and the
Defendant at the plea and sentencing hearings, will provide sufficient
information concerning the Defendant, the crime charged in this case, and the
Defendant’s role in the crime to enable the meaningful exercise of sentencing
authority by the Court under 18 U.S.C. § 3553(a).

27. The Department and the Defendant agree, subject to the Court’s approval, to
waive the requirement for a presentence report, pursuant to Federal Rule of
Criminal Procedure 32(c)(1)(A), based on a finding by the Court that the record
contains information sufficient to enable the Court to meaningfully exercise its
sentencing power and to seek sentencing by the Court immediately following the
Rule 11 plea hearing. However, the parties agree that in the event the Court

 

21

--------------------------------------------------------------------------------

orders that the entry of the guilty plea and sentencing occur at separate
proceedings, such an order will not affect the agreement set forth herein.
Additionally, if the Court directs the preparation of a presentence report, the
Department and the Defendant reserve the right to inform the Court and the
Probation Office of all facts, circumstances and law related to the Defendant’s
case, and to respond to any questions from the Court and the Probation Office,
and to any misstatements of law or fact. At the time of the plea hearing, the
parties will suggest mutually agreeable and convenient dates for the sentencing
hearing with adequate time for any objections to the presentence report and
consideration by the Court of the presentence report and the parties’ sentencing
submissions.

Breach of Agreement

28. The Plea Agreement is effective when signed by the Defendant, the
Defendant’s attorney, an attorney representative of the United States Department
of Justice, Criminal Division, Fraud Section, and an attorney representative of
the United States Attorney’s Office for the Northern District of Georgia.

29. In the event that the Department believes that the Defendant has failed to
comply with any material provision of this Agreement and thereby breached this
Agreement, the Department agrees to notify the Defendant, through counsel, in

 

22

--------------------------------------------------------------------------------

writing. The Defendant shall, within thirty (30) days of receipt of such notice,
have the opportunity to respond to the Department in writing to explain the
nature and circumstances of such breach, as well as the actions the Defendant
has taken to address and remediate the situation.

30. If the Department determines that the Defendant has failed to comply with
any material provision of this Agreement, the Department may, at its sole
option, be released from its commitments under this Plea Agreement in its
entirety by notifying the Defendant, through counsel, in writing. The Department
may also pursue all remedies available under the law, even if it elects not to
be released from its commitments under this Agreement. The Defendant agrees that
no such breach by the Defendant of an obligation under this Agreement shall be
grounds for withdrawal of its guilty plea. The Defendant agrees that should it
breach any material provision of this Agreement, the Department will have the
right to use against the Defendant before any grand jury, at any trial, and for
sentencing purposes, any statements which may be made by the Defendant
(including the statements and facts set forth in Exhibit 2), and any
information, materials, documents, or objects which may be provided by it to the
government subsequent to the Agreement, without any limitation.

 

23

--------------------------------------------------------------------------------

31. The Defendant understands and agrees that this Rule 11(c)(1)(C) plea
agreement and its agreed-upon criminal disposition:

 

  a. are wholly dependent upon (1) Tenet Subsidiary’s and Tenet’s compliance
with the material terms of the attached NPA; and (2) Tenet’s timely compliance
with the material terms of the attached civil Settlement Agreement; and

 

  b. failure by (1) the Defendant to comply fully with the material terms of
this Agreement, (2) by Tenet Subsidiary and Tenet to comply fully with the
material terms of the attached NPA, or by Tenet to comply fully with the
material terms of the civil Settlement Agreement will constitute a breach of
this Agreement.

32. In the event the Defendant at any time hereafter breaches any material
provision of this Agreement, the Defendant understands that (1) the Department
will, as of the date of that breach, be relieved of any obligations it may have
in this Agreement and the attached NPA, including but not limited to the promise
to not further prosecute the Defendant as set forth in this Agreement; and
(2) the Defendant will not be relieved of its obligation to make the payments
set forth in this Agreement, nor will it be entitled to return of any monies
already paid.

 

24

--------------------------------------------------------------------------------

Moreover, in the event of a material breach of this Agreement, the Defendant
agrees and understands that the Department may pursue any and all charges that
might otherwise not have been brought but for this Agreement, and the Defendant
hereby waives, and agrees it will not interpose, any defense to any charges
brought against it which it might otherwise be able to assert under the
Constitution for pre-indictment delay, any statute of limitations, or the Speedy
Trial Act.

Public Statements by the Defendant

33. The Defendant expressly agrees that it shall not, through present or future
attorneys, officers, directors, employees, agents or any other person authorized
to speak for the Defendant make any public statement, in litigation or
otherwise, contradicting the acceptance of responsibility by the Defendant set
forth above or the facts described in the Information and Exhibit 2. Any such
contradictory statement shall, subject to cure rights of the Defendant described
below, constitute a material breach of this Agreement, and the Defendant
thereafter shall be subject to prosecution as set forth in Paragraphs 30-32 of
this Agreement. The decision whether any public statement by any such person
contradicting a fact contained in the Information or Exhibit 2 will be imputed
to the Defendant for the purpose of determining whether it has breached this
Agreement shall be within the

 

25

--------------------------------------------------------------------------------

sole discretion of the Department. If the Department determines that a public
statement by any such person contradicts in whole or in part a statement
contained in the Information or Exhibit 2, the Department shall so notify the
Defendant, and the Defendant may avoid a breach of this Agreement by publicly
repudiating such statement(s) within five (5) business days after notification.
The Defendant shall be permitted to raise defenses and to assert affirmative
claims in other proceedings relating to the matters set forth in the Information
and Exhibit 2 provided that such defenses and claims do not contradict, in whole
or in part, a statement contained in the Information or Exhibit 2. This
Paragraph does not apply to any statement made by any present or former officer,
director, employee, or agent of the Defendant in the course of any criminal,
regulatory, or civil case initiated against such individual, unless such
individual is speaking on behalf of the Defendant.

34. The Defendant agrees that if it or any of its direct or indirect parents,
subsidiaries or affiliates issues a press release or holds any press conference
in connection with this Agreement, the Defendant shall first consult the
Department to determine (a) whether the text of the release or proposed
statements at the press conference are true and accurate with respect to matters
between the Department and the Defendant; and (b) whether the Department has any
objection to the release or statement.

 

26

--------------------------------------------------------------------------------

Complete Agreement

35. This document states the full extent of the Agreement between the parties.
There are no other promises or agreements, express or implied. Any modification
of this Agreement shall be valid only if set forth in writing in a supplemental
or revised plea agreement signed by all parties.

AGREED:

FOR NORTH FULTON MEDICAL CENTER, INC.:

 

Date:                           By:  

         

     WILLIAM MORRISON      Vice President and Assistant General      Counsel of
     TENET HEALTHCARE CORPORATION Date:                           By:  

         

     KATHRYN H. RUEMMLER      LATHAM & WATKINS, LLP      Outside counsel for   
  TENET HEALTHCARE CORPORATION

 

27

--------------------------------------------------------------------------------

FOR THE DEPARTMENT OF JUSTICE:

 

JOHN A. HORN

U.S. ATTORNEY

NORTHERN DISTRICT OF GEORGIA

    

ANDREW WEISSMANN

CHIEF

CRIMINAL DIVISION, FRAUD SECTION

U.S. DEPARTMENT OF JUSTICE

RANDY S. CHARTASH

CHIEF, ECONOMIC CRIME SECTION

    

JOSEPH S. BEEMSTERBOER

DEPUTY CHIEF, FRAUD SECTION

 

STEPHEN H. MCCLAIN

DEPUTY CHIEF,

ECONOMIC CRIME SECTION

    

 

ROBERT A. ZINK

ASSISTANT CHIEF, FRAUD SECTION

    

 

     SALLY B. MOLLOY     

 

     ANTONIO M. POZOS     

TRIAL ATTORNEYS, FRAUD SECTION

HEALTH CARE UNIT

CORPORATE STRIKE FORCE

 

28

--------------------------------------------------------------------------------

ATTACHMENT F

[see Exhibit 10.1 to this Current Report on Form 8-K]