still has its hands full.
Just days after celebrating the end of one government probe, the embattled hospital chain revealed that it has come under new scrutiny from another direction. In a quarterly report filed Thursday, the company disclosed that it is now being targeted by investigators at the Medicaid Fraud unit in Florida.
According to the regulatory filing, Florida officials began probing the company two full months ago. The Medicaid Fraud unit there issued an investigative subpoena to Tenet on June 6, requesting a variety of employee, physician and financial contracts dating back more than a decade. Tenet said it is cooperating with the state authorities. On Friday, Tenet advanced 21 cents, to $14.78.
The company also noted a few weeks ago that the
Securities and Exchange Commission
had stepped up its own investigation by issuing a subpoena on July 18 seeking detailed information -- coupled with the company's actual disclosures to the public -- about Medicare "outlier" payments and other sources of revenue at the hospital chain. The agency first began looking at the issue last November, after news of Tenet's heavy dependence on lucrative outlier payments rocked the market and sent the company's shares tumbling. Since backing off its aggressive outlier strategy, which generated huge profits for high-ticket procedures, Tenet has found itself operating in the red and scrambling for a new business strategy that will enable it to grow again.
In the meantime, Tenet continues to bleed. The company swung to a $195 million loss in the latest quarter after taking a series of special charges. But the stock rocketed anyway. Shares of Tenet jumped 12% Thursday as investors celebrated a new settlement that ended Tenet's exposure to further penalties at its troubled hospital in Redding, Calif. Tenet agreed this week to pay what prosecutors called a "record-setting" fine to settle allegations that the Redding hospital had performed unnecessary surgery on heart patients.