Hospital operator changes policy on payments

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Monday, Jan. 6, 2003 | 10:58 a.m.

SANTA BARBARA, Calif. -- Tenet Healthcare Corp. said it volunteered to seek smaller special Medicare payments that had been inflated by pricing policies at the second-biggest U.S. hospital chain.

The new policy would slash Tenet's payments for "outlier," or especially costly Medicare cases, to $8 million a month from $65 million, the company said. The company offered the change in a letter to the agency that manages the government health-insurance program for the elderly and disabled.

Tenet said the policy is patterned on changes Medicare may make to outlier payments. The government already is auditing Tenet's payments, which doubled over three years as the company boosted hospital charges.