Tenet Healthcare Corporation announced that it has finalized its previously disclosed agreement in principle with the U.S. government to resolve the Clinica de la Mama criminal investigation and civil litigation, which involved referral source arrangements at three of Tenet’s former hospitals and one current hospital. The settlement was reached with the U.S. Department of Justice, the U.S. Attorneys’ Offices for the Northern and Middle Districts of Georgia, and the State Attorneys General for Georgia and South Carolina.

Trevor Fetter, chairman and chief executive officer, stated, “The conduct in this matter was unacceptable and failed to live up to our high expectations for integrity. The relationships between the four hospitals and Clinica de la Mama violated the explicit requirements of our compliance program and were inconsistent with the strong culture of compliance we’ve worked hard to establish at Tenet. We take seriously our responsibility to operate our business in accordance with the highest ethical standards, every day and in every interaction.”

As part of Tenet’s commitment to strengthen safeguards and continually improve its compliance program, the company has amended and expanded existing policies related to referral source arrangements, including limiting the services that the company’s facilities purchase from referral sources. Tenet also is implementing more rigorous standards in its vendor selection process, sharpening its audit and oversight activities, and instituting enhanced training for employees on referral source policy changes.

Terms of the Settlement

As previously disclosed on August 1, 2016, Tenet will make settlement payments of approximately $514 million and pay approximately $3 million of related fees and expenses. Tenet expects to make these payments during the fourth quarter using available liquidity, including cash and borrowings under the company’s revolving credit facility.

The settlement also includes the execution of a three-year non-prosecution agreement with the DOJ. As part of the NPA, Tenet and the DOJ will select a compliance monitor for a period of three years to oversee Tenet’s compliance with the Federal Anti-Kickback Statute and Stark laws relating to referral source arrangements. In addition, two wholly-owned subsidiaries that previously operated Atlanta Medical Center and North Fulton Hospital in Georgia will plead guilty to a single count of conspiracy to violate the Federal Anti-Kickback Statute and defraud the United States. Tenet completed the divestiture of both facilities on March 31, 2016, and the subsidiaries currently have no operating assets.

The final resolution is subject to court acceptance of the plea agreements. Copies of the resolution documents will be filed in a Form 8-K with the Securities and Exchange Commission.